Study of the Project Risk Management in the Construction Industry Project 2022

Study of the project risk management in the construction industry
Name of the Student:
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Chapter 1: Introduction
1.1 Background
Risk management is referred to problem that may occur in terms of probability and
actual time of risk occurrence. Risk is such a factor which can hamper objectives of
construction project such as time, cost as well as quality. According to Renault and Agumba
(2016), risk management is a practice of identifying risks, analyzing the risks and taking steps
to reduce possible challenges in project. Renault and Agumba (2016) mentioned that
identification of risks faced in the construction industry is required to assess in advance for
preventing uncertainties. Adeleke et al. (2018) argued that risk management is a difficult
aspect of the project management. The project manager should require to identify root causes
of the project risks and trace causes throughout the project lifecycle. According to Van
Staveren (2018), the risk management in the construction industry is a systematic way to
identity, analyze and respond risks to achieve objectives of project work. From early stage of
the project management, major decisions regarding risk management is taken by selecting
proper construction techniques.
Demirkesen and Ozorhon (2017) discussed that success factors of construction project
are timely completion of project, in estimated cost and requisite performance of technical
work. The main barriers for project achievement are making change in construction working
environment. The large construction projects are being exposed to uncertain environment due
to planning, complexity on designing and construction, resources, economic and statutory
regulations. Kanchana, Niranjan and Karthick (2018) argued that the construction projects are
unpredictable, therefore there are higher chances of risks in this industry. Management of
risks in construction industry is recognized as important procedure to achieve project
objectives. According to Babu (2019), the project risk management is iterative method and

the process is beneficial when it is being implemented in proper way to manage it in entire
project lifecycle. The project risk management helps the managers and contractors to manage
risks from planning to its completion phase.
In the construction sector, most of the risks are occurred such as accidents, injuries of
workers and project management challenges. More than 1500 people are being injured and
killed in the construction accidents each year in Singapore construction industries. In
worldwide basis, around three times are construction workers are being killed and twice of
them are being injured. The cost of construction accidents and injuries are immense to
individual and society. It can lead to considerable portion of contract prices (Jin et al. 2017).
On a large scale project, the risk management strategies ate included with detailed planning
for each project risk to make sure that mitigation strategies are place if risks are raised. The
findings of this thesis study will help the researcher to encounter possible project challenges
and make sure that best risk mitigation strategies is in use to mitigate those risks.
Divakar and Britto (2018) discussed that the main purpose of risk management is
identification, monitoring and managing risks for an objective to reduce negative impacts of
risks having on the organization. A typical risk management processes consist of following
steps:
Risk identification: It is the first step in the risk management process helps to identify
sources of construction risks and type of risks. It includes in identifying potential risk events
in the construction project and clarification of construction risks based on responsibilities.
Agyekum-Mensah and Knight (2017) defined that risk is such an uncertain event if occurred
then it provides positive and negative effect on objectives.

Risk assessment: It is an audit procedures performed to get an understanding of the
environment, identify and assess the project risks, where due to errors from the construction
aspects (Shojaei and Haeri 2019).
Risk mitigation: It is a risk management strategy for lessening effects of project
threats faced by the contractors and managers. The risk mitigation strategies are implemented
in construction sector for reducing negative effects of project threats as well as disasters on
the business continuity (Xia et al. 2018).
Risk monitoring: It is an ongoing process for managing the project risks. The risk
management is consisted of initial phase to involve in risk identification, agreeing to the risk
treatments as well as designing of risk controls (Crnković and Vukomanović 2016). It is a
process to trace the risks and continue for identifying and managing construction related
risks.
1.2 Research aim and objectives
The aim of this thesis study is to identify possible project risks in the project
construction industry and mitigate those risks by means of risk management strategies.
Deeper understanding of this research study is contributed towards efficient process of risk
management as well as better output of the project and better value for clients as well as
contractors. Following are list of the objectives based on which entire thesis study is carried
out:
 To identify the risk management process in project management in the construction
industry
 To analysis the strength and weaknesses on the current risk management process
 To provide the recommendation on the current risk management process

1.3 Research questions
Based on the research aim as well as objectives identified for this thesis paper,
following are three research questions based on which entire study is being formulated:
I. What are the factors contribute to risk management in the construction
projects?
II. To what extent the risk management processes help in managing risks in the
construction industry of Singapore?
III. How do risk management strategies help to manage construction risks and
challenges?
1.4 Research scope
The purpose of this research study is to investigate strengths and weakness of the
project management process in the construction industry. The research scope is to provide
skills and knowledge to the researcher on how to manage the project risks involved in
construction project. The research scope is specific to the risk management process as well as
research practices. The research work is aimed to study the risk management processes help
the project manager to mitigate risks from the construction sector. Increase in awareness of
the risk management processes in construction sector would lead to take strategic approach to
improve in construction risks.

Chapter 2: Literature Review
2.1 Introduction
Risk Management is one of the area among the ten knowledge area in the project
management. The risk management is a way to manage project uncertainty that inherent in
the construction project and require formal project documents. Fadun and Saka (2018) stated
that complexity of the project work involved with the construction activities makes project
risks. Based on the project complexity, the part of risk is involved in construction projects.
Renault and Agumba (2016) mentioned that risk describes as a situation where
documentation as well as experience exists and measures are taken to get possible project
outcomes. Qazi et al. (2016) argued that the risk is effusively distinct, beyond economic as a
probability of loss and injury, difficulty or damage. The literature study is based on focusing
on implementation of risk management in the construction industry of Singapore.
2.2 Factors contribute to risk management in the construction projects
Perez, Gray and Skitmore (2017) determined that the construction risk is considered
as likelihood of investor’s right in the work failing to attain forecasting actions of probability.
Reza Hosseini et al. (2016) mentioned that managing risks make a significant role to reduce
encountered risks as it allows the project to manage it at higher degree of expectations. Risk
management can increase probability to achieve project aims as well as objectives.
Comprehensive risk management can reduce probability of risk occurrence of the event and
reduce extent of risk impacts on project success.
Various studies are carried out on the factors which can influence on success of the
construction project. Xia et al. (2018) mentioned that knowledge of the factors is relevant to
the project management and it is beneficial for the project manager as well as business firm
involved in the construction activities. Knowledge of success factors in the construction

project can improve over business efficiency as well as effectiveness in the risk management
process. Williams (2016) examined that there are three main factors lead to project
construction risks such as wrong selection of the project manager, unplanned termination of
construction project and lack of support from top management. Razzaq et al. (2018) noted
relationship between success of construction project as well as experience of the project
manager. Experience of the project manager has no such effect on performance of
construction project, while size of the project is handled positively and provided influence on
performance of project manager. Following are the factors contribute to risk management in
the construction projects are:
Commitment and support from top management: The risk manager should know there
is high importance to gain support from the top management and outline responsibilities early
in the construction processes. Success of the construction project along with survival is based
on proper implementation of risk management. It is required to figure out the duties and
responsibilities of senior managers or top managers. Kikwasi (2018) determined that the
factor as commitment of the project board as well as top management, identification and
analysis of risk becomes easier. Hwang et al. (2017) mentioned that support from the top
management delivers construction education as well as training for the construction
professionals to manage and handle construction risks. Zou, Kiviniemi and Jones (2017)
argued that it attempts to deliver the project and aware them about process to implement the
risk management system. Support from the top management is considered as significant
factor to achieve organizational objectives.
Communication: Hwang and Ng (2016) stated that communication is backbone of a
successful construction project. Effective interaction among the project team involved in
construction project will enhance success of the project including mitigation of construction
risks. Xia et al. (2018) noted that communication plays a key role to mitigate project risks

and provide opportunities for clarification of project risks. It helps to improve over the impact
of the project risks on the construction work.
Culture: Toh, Goh and Guo (2017) discussed that culture has influenced on how the
organization is managing construction issues. More and Hirlekar (2017) mentioned that the
risk management is required combination of various cultures which can make a risk
management system. Training is required for the construction professionals with a knowledge
on risks including risk management. Razzaq et al. (2018) argued that the risk culture is
system of values as well as behavior present within the business that shape risk related
decisions of managers and employees. The main purpose of risk culture is understanding of
the organization and its purpose.
2.2 Risk Management in construction industry of Singapore
The risk management is organized in the developed countries and it is better to apply
it in the developed countries. Compared with the situations of other countries, Singapore is a
developing country and therefore management is not so systematic in Singapore and therefore
it requires research as well as development. Singapore is spending lot of budget in their
construction industry. More and Hirlekar (2017) discussed that application of risk
management will result to take correct and prompt decisions throughout informed about the
changes in construction industry. Risk management is improved over quality of cost
estimation as well as decision making. It helps the project manager to finish the plan on
scheduled time as well as budget. Zou, Kiviniemi and Jones (2017) indicated the impact of
risk management on project performance like quality, cost as well as schedule. Limited
number of studies are focused on risk management in the construction project, therefore this
literature study id focused on investigating impact of risk management on performance of
construction project in Singapore. According to Perez, Gray and Skitmore (2017), a

formalized risk management process can facilitate on the risk awareness besides movement
of risk management evidence through project lifecycle.
Dutta (2017) emphasized that the construction projects are facing high financial risk
due to adoption of environmental strategies needed a higher investment lead to overrun of
cost. Hwang et al. (2017) found that construction projects of the Singapore has put the
industry professionals at high safety risks. According to Liao, Teo and Chang (2019), the
green building construction work in the Singapore confronted risk of failure because of
defects by the design professionals and contractors. Development of the infrastructure is
considered as important activities which can boost the business of the construction industries
and therefore there is an increase in gross domestic product (GDP) of the Singapore. Toh,
Goh and Guo (2017) mentioned that the risk management is a technique used in the industry
from IT related to the business and construction industry. In the small projects, it is difficult
to manage construction risks as there are various challenges faced in this type of project as
compared to large project. In the Singapore construction industry, risk management is a tool
used for reducing overruns of both cost as well as time. Yin et al. (2018) argued that
implementation of risk management in the Singapore is low, however this section is aimed to
increase in implementation level of the risk management in Singapore’s construction projects.
The construction professionals in construction industry require to increase in their awareness
of benefits of the risk management. According to Hwang et al. (2017), a systematic risk
management process is used in the construction industry to identify involved project risks and
mitigate impact of uncertainties in various phases of construction planning.
Lin et al. (2017) mentioned that risk management in the construction industry is about
defining sources of uncertainties, estimation of event consequences and generate mitigation
strategies in light of outcomes. The government of Singapore lead to global city to create a
sustainable built environment. The country has implemented various initiatives as well as

regulations like sustainable construction master plan 2008 and Singapore green plan 2012.
The focus of their sustainable construction project is energy efficiency and encourage
environmental friendly construction work. It ensures that quality of environment as well as
comfort are not negotiated. Li (2018) discussed that sustainable construction is all about
green building and green environment. Sustainability is about reduction, recycle as well as
reuse of the waste materials. Therefore, it can low standard of living. According to Zou,
Kiviniemi and Jones (2017), increase in awareness of sustainable construction as well as
positive attitudes towards sustainability can encourage the industry to implement a safe and
environmental friendly construction work. In order to develop this potential, the research
findings indicated that there is collaboration on the sustainable construction work in addition
environmental policy may be helpful.
Positive attitudes towards sustainable construction can lead to manage project risks
and provide with environmental friendly construction work. More and Hirlekar (2017)
reflected from the previous research is that barriers to sustainable construction are that
sustainability is not measured by the stakeholders, measures are too cost, in addition to lack
of adequate and available sustainable products. Qazi et al. (2016) indicated that incorporating
of sustainable development principles can be helpful to conduct the feasibility study.
Therefore, the contractor and project manager is required to manage the project risks by
implementing risk management processes- risk identification, analysis, response as well as
monitoring and controlling of construction risks. The next section of this research study is
discussing on the risk management processes in details required to manage the construction
risks.
2.3 Risk management process
Renault and Agumba (2016) mentioned that the project risk management is involved
with processes to execute the risk management, planning, analysis as well as monitoring of

construction project work. The risk management is aimed to enhance possibility and positive
effect of risk events and reduce negative effects on the project success. According to
PMBOK, the risk management process consists of following elements to manage
construction risks:
Risk Identification: Adeleke et al. (2018) discussed that risk identification is a process
to determine project risks that could prevent the program and investment from achieving
objectives. It includes documentation as well as communication of the project concerns
among the project team. Brainstorming is a process to identify project risks by associating the
project manager and discussing on aspects of the project foresee the risks (Van Staveren
2018). Interview is a technique to involve experienced project personnel and employees and
by consultation, opinions as well as ideas are taken from them to avoid factors causing
construction risks.
Risk Analysis: After identification of project risks, its valuation is done by performing
qualitative as well as quantitative risk analysis process. Divakar and Britto (2018) discussed
that risk analysis is implemented for each construction risk and it is implemented with
qualitative impact as well as likelihood of risk occurrence. The risk matrix clarifies
significance of various project related risks. Based on qualitative method, the project risks are
rated based on high, medium and low. It is determined based on gathered opinions of
professionals. Demirkesen and Ozorhon (2017) mentioned that quantitative risk analysis is
performed by analysing effect of project risks. It collects numerical data for getting precise
analysis results.
Risk Response: After identifying and assessing of project risks, remedial measures are
taken to lessen effect of risks on project success. Shojaei and Haeri (2019) determined that
proper risk response lead to provide positive opportunities from risks. Risk response is

categorized as avoidance, transfer, mitigate in addition to accept. Li (2018) mentioned that
risk avoidance is taken place where level of project risk is such a level that the project is
feasible. Risk transfer means there is transferring of risks from project to the third party.
Reduction of impact of construction risks is risk mitigation and reviewing of the project
complexities is other way to mitigate risks. Xia et al. (2018) concluded that risk acceptance is
accepting the project risks by keeping cost as well as time as factor.
Risk Monitoring and Control: In order to check on implementation of the risk
identification, assessment as well as response, risk monitoring and controlling is required. In
order to execute a risk management plan, it is required to monitor trigger situations for the
project contingencies as well as probabilities of impending project risks throughout
development execution (Kanchana, Niranjan and Karthick 2018). Team meetings is created
and risk checklist is also prepared at the project initial stage by taking corrective actions as
per project requirements.
2.4 Strength and weakness of risk management process
2.5 Risk management strategies help to manage construction risks

Chapter 3: Research Methodology
3.1 Research philosophy
3.2 Research approach
3.3 Research strategy
3.4 Data collection and analysis
3.5 Validity and reliability
3.6 Ethical considerations
Chapter 4: Findings and Discussion
4.1 Qualitative data analysis
4.2 Discussion
Chapter 5: Conclusions and Recommendations
5.1 Conclusion
5.2 Recommendations
5.3 Limitations of the research
5.4 Opportunities for future research

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