Risk Management in Construction Projects

Financial Reporting

TABLE OF CONTENTS
Risk analysis....................................................................................................................................1
External factors...........................................................................................................................1
Internal factors............................................................................................................................9
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

Risk analysis
External factors
Serial
number
Risk incurred
by
Risk
description
Risk level Mitigation Risk after
mitigation
1 Legal and
ethical risk
In UK under
Building act
1984 multiples
rules and
regulations are
prepared which
need to be
followed while
constructing a
building
(Wang, Zou,
and Li, 2016).
As per
guidelines
every company
that is
operating in
construction
industry must
follow rules
related to
workmanship,
adequate
materials,
structure,
waterproofing
and
4 Project manager
before starting any
construction project
must gather
information about
rules and
regulations. Many
times, it happened
that new rules are
prepared but
manager is not
aware of it and
make a mistake.
Ultimately,
Government
department take
action against
business firm.
There must be a
separate team
whose main work
must be to identify
rules and
regulations and
accordingly made
recommendation to
the project manager
1
1

weatherisation,
fire safety and
means of
escape, sound
isolation,
ventilation,
safe (potable)
water,
protection
from falling,
drainage,
sanitary
facilities,
accessibility
and facilities
for the
disabled,
electrical
safety, security
of a building,
and high-speed
broadband
infrastructure
(Malekitabar
and et.al.,
2016). In case
firm failed to
take action,
strict action is
taken against it
in the UK.
in respect to
operating entire
construction
project.
2

2 Social risk Many time
local people
object
construction of
building on
specific area.
Number of
cases are
observed
where business
firm pay
people to
vacant land
they own but
due to some
reasons
conflict arises
between firm
and people
(Jarkas and
Haupt, 2015).
In such cases
at end
Government
intervene
which directly
affect firm
interest.
3
In order to mitigate
social risk project
manager must
identify any reason
due to which local
people can oppose
implementation of
the project. For
example suppose
there are trees in
the land area where
building is
proposed to build
then local residents
may oppose it
(Dzhandzhugazova,
and et.al., 2015
(Dzhandzhugazova,
E.A. and et.al.,
2015). In such kind
of situation
alternative option
can be selected like
cropping of new
plant in nearby area
so that people
opposition can be
controlled. Thus,
project manager
must try to identify
factors due to
1
3

which people may
oppose project so
that action can be
taken on time to
handle such kind of
situation in easy
and effective way.
3 Political risk There are
number of
Government
departments
that operate
within a city
(Wang, 2015).
When any
business firm
intend to
construct a
building, it
need to obtain
clearance from
4 In order to mitigate
such kind of risk
before choosing
any location project
manager must
contact with the
Government
department officers
and must identify
reasons due to
which building can
be or not
constructed in
specific geographic
2
4