PPMP20009: Risk Management in Dream Home Construction Project

This report, submitted by a student on Desklib, provides a comprehensive analysis of risk management in the context of a dream home construction project. It begins by outlining the various types of risks involved, including financial, social-political, and environmental, and emphasizes the importance of proactive planning. The report then delves into the risk management process, detailing the steps of risk identification (brainstorming, Delphi technique, interviews, and checklists), risk assessment (qualitative and quantitative methods), risk response (avoidance, transfer, mitigation, and acceptance), and risk monitoring and control. The report also includes a table outlining risk categories, likelihood, financial effects, and responsible parties, and concludes with a list of references. The assignment fulfills the brief by providing a detailed explanation of a risk management strategy, appropriate leadership styles, 7QC tools, and effective communication techniques. The student has applied APA referencing style in the report.

Running head: PPMP20009 LEADING LEAN PROJECTS
PPMP20009 LEADING LEAN PROJECTS
Name of the Student
Name of the University
Author Note:

1PPMP20009 LEADING LEAN PROJECTS
Table of Contents
Risk Management................................................................................................................2
Risk Management Process...................................................................................................3
Risk Identification.......................................................................................................3
Risk Assessment..........................................................................................................3
Risk Response..............................................................................................................4
Risk Monitoring and Control.......................................................................................4
References............................................................................................................................7

2PPMP20009 LEADING LEAN PROJECTS
Risk Management
In construction of dream home, there is various kind of risks involved. So, there is need
of proper planning and its management. Different kind of risk is associated with the construction
of this house like financial, environmental, social and economic. The current environment is the
present construction industry is not hidden from any people (Chatterjee et al., 2018). It is
completely influenced by various external factors like technical design, physical and operating. It
does not derail the project but also have the capacity of creating aberration. Risk management
becomes an important aspect which is required for dealing with different risk (Ali, Harison, Ali
& Harison, 2016). In the construction of this dream house, a list of risk are being encountered
like
Financial risks: There is validating of proper exchange rates, demand in market,
inflation, and delay in payment and improper flow of cash and incompetence finance can result
in financial risk.
Social-political risk: There are many amendments from Australian government that
highlights certain rules and regulation for increase in taxes (Mhetre, Konnur & Landage, 2016).
In addition, there are changes in government forms and bribery.
Environment risk: The current weather condition, natural disaster are completely have an
easy accessibility to different website, safety norms and pollution (Ou et al., 2019). All these
aspects ultimately result in environmental risk.
Risk in dream house construction: Any kind of failure of logistics, changes in design,
productivity for labour, and revision of time-binding ultimately result in time constraints.
Risk management process is defined as a collection of steps that helps in identifying and
overcoming various risk in dream house construction (Mhetre, Konnur & Landage, 2016). If all

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the steps are followed properly then construction risk will be reduce the overall likelihood and
magnitude of occurring risk. In other words, risk management can be defined certain action
which is needed for avoiding and minimising any risk for any project in upcoming days.
Fig 1: Graph of Risk Management for dream house construction
(Source: Mishra & Mallik, 2017)
Risk Management Process
In this dream house construction, the risk management process can be applied. It
comprises of certain steps like risk identification, risk assessment, risk monitoring and control
and risk response.
Risk Identification

4PPMP20009 LEADING LEAN PROJECTS
It mainly comprises of five stages like brainstorming, checklist, Delphi technique, earlier
experience and interview and opinion of expert
Brainstorming: All the associated people with dream house construction project are
required to discuss the various aspect of project (Qazi et al., 2016). It merely focus on raising the
idea of different individual and understanding the whole thing from their perception.
Delphi technique: Questions are being answered by group of experts so that they have
the intention of converging towards the same answer (Chatterjee et al., 2018). It is mainly done
by improving the overall judgement by considering different rounds.
Interview: There are many experienced and related people who are consulted for their
own opinions (Wu et al., 2017). It is mainly done for avoiding any kind of factors which affect
the risk.
Earlier Experience: Much of the similar projects are being consulted for getting their
opinions so that they can avoid any kind of factor-related that affects risk.
Checklist: An earlier defined list of risk can easily result in huge amount of threat for the
project.
Risk Assessment
After identifying various kind of risk, their valuation is needed to be done by using
qualitative and quantitative method.
Qualitative method: It is mainly done for both small and medium projects that requires
listing and collating of different risk (Serpell, Ferrada & Rubio, 2017). The identified risk is
rated as low, high or medium.
Quantitative method: This research method is all about analysing the overall effect of
different risk for large project.

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Risk Response
An identification and assessment for identifying various risk and available option. Risk
response is generally divided into certain categories like risk avoidance, risk transfer, mitigating
risk.
Risk avoidance: It is the most likely to come into place when the level of identified risk
is low level when this construction project is not feasible.
Risk transfer: In this construction project, risk can be transferred from project to third
parties (Arashpour et al., 2016). There are number of steps like outsourcing and purchasing for
sophisticated work.
Risk mitigation: Overall reduction of impact of risk in this construction project is defined
as risk mitigation.
Risk acceptance: This construction project comes up with certain risk. There are some
kind of risk which are associated with this dream house construction (Serpell, Ferrada & Rubio,
2017). There is need of keeping a track of overall cost and time and most of management
authorities needs to be informed about the overall consequence of each risk.
Risk Monitoring and Control
For the proper construction of this dream house, there is a list of tool available like risk
identification, risk assessment and risk monitoring and its controlling. There is need of ensuring
the fact that there are risk plans so that it can monitor the condition for the probabilities of risk
identified at the time of project execution (Yang et al., 2019). There is need for team meeting at
regular interval so that all the risk can be identified and mitigated properly. In addition, all the
checklist of the project in the beginning stage need to take up all the action as per the provided

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requirement (Jarkas & Haupt, 2015). Proper monitoring and control of this project are done in
whole life cycle of the dream house construction.
Risk Categories Likelihood Correlated to
litigation
Financial
effect
Parties responsible
Higher than the
expected
operating
expense
(Excessive use
of water and
energy)
High High High House owner,
designer, contractor
Encountering
conflicts for
standard and
project needs
(Adeleke,
Bahaudin &
Kamaruddeen,
2016).
High Mid Mid Owner of dream
house
Impact of cost
and schedule
Mid High High Owner of dream
house or contractor

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Failure to meet
the Green
certification in
the design
phase of dream
house (Fadun &
Saka, 2018).
Mid Mid Mid Owner of dream
house or designer
Using materials
and
equipment’s
that have
immediate
failure (Zou,
Kiviniemi &
Jones 2017).
Mid High High Owner of dream
house or designer
Overall damage
to environment
and
professional
reputation
(Gendron,
Brivot &
Guénin-
Low Low Mid Owner of dream
house

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Paracini, 2016).

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References
Adeleke, A. Q., Bahaudin, A. Y., & Kamaruddeen, A. M. (2016). Moderating Effect of
Regulations on Organizational Factors and Construction Risk Management: A Proposed
Framework. International Journal of Economics and Financial Issues, 6(7S), 92-97.
Ali, D., Harison, A., Ali, D., & Harison, A. (2016). Risk Management Strategies in Construction
Companies in India. International Journal, 2, 6-8.
Arashpour, M., Wakefield, R., Lee, E. W. M., Chan, R., & Hosseini, M. R. (2016). Analysis of
interacting uncertainties in on-site and off-site activities: Implications for hybrid
construction. International Journal of Project Management, 34(7), 1393-1402.
Chatterjee, K., Zavadskas, E., Tamošaitienė, J., Adhikary, K., & Kar, S. (2018). A hybrid
MCDM technique for risk management in construction projects. Symmetry, 10(2), 46.
Fadun, O. S., & Saka, S. T. (2018). Risk management in the construction industry: Analysis of
critical success factors (CSFS) of construction projects in Nigeria. International Journal
of Development and Management Review, 13(1).
Gendron, Y., Brivot, M., & Guénin-Paracini, H. (2016). The construction of risk management
credibility within corporate boardrooms. European Accounting Review, 25(3), 549-578.
Jarkas, A. M., & Haupt, T. C. (2015). Major construction risk factors considered by general
contractors in Qatar. Journal of Engineering, Design and Technology, 13(1), 165-194.
Mhetre, K., Konnur, B. A., & Landage, A. B. (2016). Risk management in construction
industry. Int. J. Eng. Res, 5, 153-155.
Mishra, A. K., & Mallik, K. (2017). Factors and Impact of Risk Management Practice on
Success of Construction Projects of Housing Developers, Kathmandu,

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Nepal. Internafional Journal of Sciences: Basic and Applied Research (IJSBAR), 36(7),
206-232.
Ou, R., Chen, F., Ren, Y., Liu, Y., & Wang, Q. (2019). Digital Continuity Guarantee Method of
Urban Construction Archives Based on Risk Management. Journal on Big Data
JBD, 1(2), 71-77.
Qazi, A., Quigley, J., Dickson, A., & Kirytopoulos, K. (2016). Project Complexity and Risk
Management (ProCRiM): Towards modelling project complexity driven risk paths in
construction projects. International Journal of Project Management, 34(7), 1183-1198.
Serpell, A., Ferrada, X., & Rubio, N. L. (2017). Fostering the effective usage of risk
management in construction. Journal of Civil Engineering and Management, 23(7), 858-
867.
Wu, Z., Nisar, T., Kapletia, D., & Prabhakar, G. (2017). Risk factors for project success in the
Chinese construction industry. Journal of manufacturing technology management, 28(7),
850-866.
Yang, Y., Tang, W., Shen, W., & Wang, T. (2019). Enhancing Risk Management by Partnering
in International EPC Projects: Perspective from Evolutionary Game in Chinese
Construction Companies. Sustainability, 11(19), 5332.
Zou, Y., Kiviniemi, A., & Jones, S. W. (2017). A review of risk management through BIM and
BIM-related technologies. Safety science, 97, 88-98.