Risk Assessment Management in Construction Engineering (Indian SMEs)

This dissertation delves into the critical aspects of risk assessment and management within the construction engineering sector, with a specific emphasis on the context of Indian Small and Medium Enterprises (SMEs). The research meticulously examines the inherent risks within the Indian construction industry, contrasting them with those in the UK, and scrutinizes the operational and compliance risks prevalent in this sector. The study emphasizes the importance of effective risk mitigation, particularly concerning safety, and investigates various risk assessment processes, including identification, prioritization, and mitigation strategies. Through the analysis of primary data collected from industry professionals, the dissertation identifies key risks, such as technical, logistical, and management-related challenges, and offers insights into their impact. Furthermore, the research provides recommendations for improved risk management practices within Indian construction projects to address key issues and improve outcomes.

Running head: DISSERTATION
Dissertation: Risk Assessment Management in Construction Engineering (Focus On Indian
SMEs)
Name of Student
Name of University
Author Note

DISSERTATION
Acknowledgement
Working on this research has helped me in enhancing the knowledge and understanding related
to the research project. The research project has helped me to face the challenges and has further
helped me to conquer the challenges faced. I will be thanking my lecturer and my supervisor for
giving me the necessary guidance. I will be thanking my friends and my family members for
motivating me to deliver this project.
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Abstract
The project discusses the major risks and issues related to construction industry with focus on the
construction Industry of India. The research evaluates the need of managing the risk in that
industry. The risks linked with the construction Industry of India is evaluated in this research.
The research focuses on evaluation of the need of risk assessment and managing the risks in
construction Industry of India. The risk assessment is mainly focused on Indian SMEs. The
various issues related to risk management process is evaluated in this research by focusing on
Indian SME. The researcher provides a brief idea of risks in projects linked to construction and
the process by which those risks can be mitigated. The research involves analysing the primary
data that establishes the genuineness of the obtained data. The primary data is obtained from the
individuals who have experience in construction Industry of India. The research indicates the
future scope of the undertaken research along with its limitations. It is evaluated that operational
and compliance risk are the two significant risks in construction. In construction industry of
India, effective elimination of the risk related to safety is essential. The research identifies the
mitigation approaches of the risks and issues linked with construction Industry of India. In
construction Industry of India, a planned approach of management of risk is needed to be
followed in projects to address all the major issues related to construction.
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Table of Contents
Table of Tables....................................................................................................................6
Table of Figures...................................................................................................................7
Chapter 1: Introduction........................................................................................................8
1.1. Background of the study...........................................................................................8
1.2. Research Aims and Objectives...............................................................................10
1.2.1. Aims of the study.............................................................................................10
1.2.2. Objectives of the study....................................................................................10
1.3. Research Questions.................................................................................................11
1.4. Problem Statement..................................................................................................11
1.5. Rationale of the study.............................................................................................12
1.6. Structure of the Study.............................................................................................13
Chapter 2: Literature Review.............................................................................................15
2.1. Introduction.............................................................................................................15
2.2. Risk assessment and Management..........................................................................16
2.3. Construction Risks..................................................................................................20
2.3.1. Specific Aspect of Construction Risk in Indian SME.........................................23
2.3.2. Safety hazards related to Construction: Focus on Indian SMEs......................23
2.4. Need of Risk Management in Indian Construction Industry (SMEs).....................23
2.4.1. Major Risks in Construction Industry..............................................................25
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2.4.2. Effects of those risks in Construction Industry................................................28
2.4.3. Risk Assessment..............................................................................................30
2.5. Importance of Risk Assessment in Risk Management...........................................31
2.6. Risk Identification and Mitigation..........................................................................32
2.7. Strategies of effective risk identification and mitigation........................................35
2.8. Chapter Summary...................................................................................................36
Chapter 3: Methodology and Research Activity...............................................................37
3.1. Introduction.................................................................................................................37
3.2. Method Outline...........................................................................................................37
3.3. Research Philosophy...................................................................................................38
3.3.1. Justification for Positivism..............................................................................39
3.4. Research Approach.....................................................................................................40
3.4.1. Justification for choosing deductive research approach..................................40
3.5. Research Design.........................................................................................................40
3.5.1. Justification for choosing Descriptive research Design...................................41
3.6. Data Collection Process..............................................................................................41
3.7. Sampling Method........................................................................................................43
3.7.1. Sample Size.....................................................................................................43
3.8. Data Analysis Process.............................................................................................44
3.9. Ethical Consideration..................................................................................................45
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3.10. Chapter Summary.....................................................................................................46
Chapter 4: Results and Analysis........................................................................................47
4.1. Introduction.............................................................................................................47
4.2. Data Analysis: Quantitative....................................................................................47
4.2.1. Demographic Data Analysis............................................................................48
4.2.2. Quantitative Data Analysis..............................................................................52
Chapter 5: Discussion and Recommendations..................................................................62
5.1. Introduction.............................................................................................................62
5.2. Discussion...............................................................................................................62
5.2.1. Risk management process................................................................................67
5.3. Recommendations...................................................................................................69
Chapter 6: Conclusion, Key Findings and Future Work...................................................71
6.1. Conclusion..............................................................................................................71
6.2. Linking with Objectives.........................................................................................72
6.3. Limitations of research...........................................................................................74
6.4. Future scope of the study........................................................................................74
References..........................................................................................................................75
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Table of Tables
Table 2: Representing data about Gender of the Respondents..........................................48
Table 3: Representing data about the experience of the respondents................................49
Table 4: Experience of the research respondents in Indian construction Industry............50
Table 5: Experience of the research respondents in Indian construction Industry............51
Table 6: Most prominent risk construction Industry.........................................................52
Table 7: Representing data regarding Construction Industry a Risk Prone Zone.............53
Table 8: Representing data regarding the difference of risk management in India and UK
.......................................................................................................................................................54
Table 9: Representing data regarding safety risk in Indian construction Industry............55
Table 10: Representing data regarding the need of continuous Risk Assessment............56
Table 11: Representing data regarding the need of improvement in Indian construction
Industry..........................................................................................................................................57
Table 12: Representing data regarding improper risk management as a reason of project
delay...............................................................................................................................................58
Table 13: Representing data about the need to educate the team about risk management
frameworks....................................................................................................................................59
Table 14: Representing data about the need to educate the project team regarding the
most common risks in construction...............................................................................................59
Table 15: Representing data about the need to educate the project team regarding the
safety risk in construction..............................................................................................................60
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Table of Figures
Figure 1: Representing data about Gender........................................................................48
Figure 2: Representing experience of the respondents in construction Industry...............49
Figure 3: Representing experience of the respondents in Indian construction Industry....51
Figure 4: Representing the most prominent risk................................................................63
Figure 5: Representing knowledge about most common risk...........................................64
Figure 6: Representing knowledge about most common risk...........................................65
Figure 7: Representing the response related to improper risk management as reason of
project delay...................................................................................................................................66
Figure 8: Representing whether construction industry is a risk prone zone......................67
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Chapter 1: Introduction
1.1. Background of the study
Risk management is integral for any project in order to ensure that the project is
completed in a successful manner. Risk management is quite significant for construction project
as this type of project involves high level risks. This risks arises mainly because the construction
projects are highly complex. Construction industry can be considered as highly risk prone as it
mainly involves complex and dynamic project environment that creates a high level of risk and
uncertainty (Sousa, Almeida and Dias 2014). It is therefore essential to cope up with the major
risks associated with the construction industry. This research has been undertaken in order to
analyse and assess the risk associated with the management and implementation of projects in
construction industry (Hughes, Champion and Murdoch 2015). The research will be focussing on
the management and assessment of the risk in Indian construction industry. This will be done by
inspecting the risks in Indian construction industry and how the risks differ from UK. The
research will be focused on the small and medium enterprises in construction sector (Serpella et
al. 2014). SME sector of India is considered to be the economic backbone of the country
contributing to almost 4% of the industrial output and almost 40% of the Indian exports (Taroun
2014). The risks in construction industry and SMEs in India are needed to be analysed as it is
responsible for employing almost 60 million people.
In this context, the significant risks faced by the Indian construction industry can be
discussed. There are a number of risks in Indian construction Industry, which include technical
risk, logistical risk, risks related to project management, environmental risks, social-political
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risks and the financial risks (Saha, Bose and Mahanti 2016). Technical risks are quite common
which include inadequate site investigation, designing issues and uncertainty in source of
materials (Singh, Deep and Banerjee 2017). The management related risks however, is common
in construction Industry of India. The inadequately defined roles and responsibilities mainly
increases the management problems that are faced in this industry. One key risks in construction
Industry of India is however, is the safety risk that is faced by the construction workers in India.
The risk management process mainly consists of identification of the major risk and
prioritizing the risks that are needed to be mitigated (Taylan et al. 2014). There are a number of
processes of risk assessment. The research will be analysing the various processes related to risk
management in construction, with special focus on Indian SMEs. The risk management or risk
assessment includes identification of the major risks associated with a particular project
(Nicholas and Steyn 2017). After successful identification of the risks, it is necessary to identify
the mitigation approach of the risk. In this context, the concept of risk analysis and risk
management will be evaluated in this research topic. Prior to the identification of the risk
mitigation approach, it is quite essential to prioritize the risks as per their effect on the project.
For this step, a risk probability and impact assessment are needed to be develop. Risk rating
matrix can be developed as a part of risk mitigation plan. The risk matrix should categorize the
risk on basis of their urgency (Nasirzadeh, Khanzadi and Rezaie 2014). After risk categorization,
risk mitigation stage is implemented. The risk assessment and management can therefore be
considered as a planned approach (Carvalho and Rabechini Junior 2015). The research will be
evaluating the process of risk assessment and risk management that is mainly applicable for
construction engineering with a special focus on India SMEs. The following paragraphs gives an
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idea of the research aims, objective and the research questions that will be evaluated as a part of
this research.
1.2. Research Aims and Objectives
The major aims and objectives of the research that has been undertaken are evaluated in
the sections below.
1.2.1. Aims of the study
The aim of the research undertaken is to assess the risk assessment and the risk
management process in construction engineering with a special focus on the small and medium
sized enterprises in India.
A planned approach has been undertaken in order to ensure that the research is conducted
in a successful manner. The risk is perceived in a negative manner mainly because of the effect it
might have on a particular project. Therefore, appropriate mitigation of the risk becomes
essential. This research has been undertaken in order to understand the process of risk
assessment and risk management. This will be done by collection of primary data. A survey will
be conducted to understand the difference in the risks and issues associated with Indian
construction industry and that of UK. In this context, the specific aspect of construction risk in
Indian SME will be evaluated as well.
1.2.2. Objectives of the study
The objectives of the research study that has been undertaken are as follows-
 To identify the major activities in the risk management process in construction
industry
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 To establish the need of risk management in construction industry and in SMEs
 To analyse the risk assessment processes in construction industry
 To recommend effective strategies in appropriate risk identification and risk
mitigation
1.3. Research Questions
The Primary research question that has been identified for this research study are as
follows-
How is risk in construction engineering in Indian SMEs assessed?
In order to find answer to the primary research question that has been identified, certain
secondary research questions are identified. The secondary research questions are as follows-
1. Why is risk management essential in construction industry?
2. Why is risk identification the most important part of risk management?
The research will be conducted on basis of the above identified research questions. The
researcher will be evaluating these research questions to find solution to the identified research
problem.
1.4. Problem Statement
It is essential to conduct this research as the complexity of the risk in construction
industry is high. The research will mainly be focused on the small and medium sized industries
in India. Construction industry is considered to be one of the most risk prone industry mainly
because of the complex tasks in the project (Unnikrishnan et al. 2015). Risk management is
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