Risk Assessment and Management Report: Construction Project

This report provides a comprehensive analysis of risk management in building construction projects. It begins with an executive summary outlining the inherent risks associated with such projects, including factors like changes in laws, technology, and natural calamities. The report then delves into the application of AS/NZS ISO 31000:2009 and FMEA frameworks for risk assessment, covering the scope of the project, identification of stakeholders (internal and external), and establishment of communication and consultation strategies. It details the roles and responsibilities of stakeholders, processes and tools like the risk register, and the training of employees. The report further explores risk assessment, risk tolerance, and risk treatment options, including a risk matrix and mitigation strategies for identified risks. Finally, the report emphasizes the importance of monitoring, review, and continuous improvement in the risk management process, concluding with a summary of key findings and recommendations.

Running head: RISK MANAGEMENT
RISK MANAGEMENT
Name of the Student:
Name of the University:
Author Note:

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Table of Contents
Executive Summary:........................................................................................................................3
Introduction:....................................................................................................................................5
Communication and consultation:...................................................................................................6
Establishing the context:..................................................................................................................6
Identifying all relevant stakeholders:...........................................................................................6
Internal stakeholders................................................................................................................6
External stakeholders:..............................................................................................................7
Clients:.....................................................................................................................................7
Rules, roles and responsibilities:.................................................................................................8
Processes and tools:.....................................................................................................................9
Risk register:............................................................................................................................9
Training of employees:............................................................................................................9
Definition of risk criteria:............................................................................................................9

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Risk assessment:............................................................................................................................10
Risk tolerance table:..................................................................................................................10
Risk treatment:...............................................................................................................................10
Monitoring and review:.................................................................................................................10
Discussion:.....................................................................................................................................11
Conclusion:....................................................................................................................................11
References:....................................................................................................................................12

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Executive Summary:
The discussion below shows that risks are inherent parts of construction projects. The risks which construction projects face stem from
factors like changes in laws and technology. The construction projects come under direct influences like dangers like natural
calamities and hostile political situations. It can be inferred from the attachments and the report that construction companies have no
control over these risks. However, it has already been pointed out that these companies have to take mitigation steps to avoid or at
least minimize the risks. Finally, it can be concluded that risk management strategies of companies should include supply chains as
well. We will apply
AS/NZS ISO 31000:2009 in the assessment.
Scope of the assignment:
 Construction of a two storied building
 Assessment of the risks the building project during and after construction.
 Recognizing the stakeholders and the impact of the risks on them.
 Formulation of risk management techniques.
Purpose of the construction of buildings
 To use them as commercial buildings

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 To use them as residential buildings
 To use them as both residential and commercial buildings
Risk management method applied:
The risk management methods applied would according to the AS/NZS ISO 31000:2009 and failure mode, effect and critical
analysis framework or FMEA.

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Figure 1. Risk management process according to AS/NZS ISO 31000:2009 (6)

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Introduction:
Engineering processes attract diverse types of risks and require adoption of risk management plan (RMP) to mitigate these
risks. Engineering projects aim to construct assets like bridges, buildings and roads. Risks to these assets pose risk to their users as
well. Breakdown of buildings and bridges can lead to devastating results including fatalities. Their breakdowns result in loss of
colossal amount of investments which go into their construction. Building construction projects are undertaken to erect buildings to
meet commercial or residential purposes. Damage of buildings either due to internal construction faults or due to external forces like
natural calamities result in death of people and loss of the assets stored in the buildings. Buildings can face risks due to several factors.
The British Broadcasting Channel reported in a 2016 article that several buildings in Africa collapsed due to several factors killing
several people. The article then goes on to mention that factors like weak foundation, counterfeit materials and improper usage are
responsible for breakdown of buildings [1]. This clearly points out that construction of buildings attract immense risks which have to
be addressed by taking proper risk management plans. The aim of the paper is to assess the risks and explore the RMP pertaining to
building construction projects. The task would first go on to explore the engineering specifications, timeline, financial budgeting and
external constraint to build the RMP. The research would also include the role of stakeholders in the RMP and the consequences as
well as likelihood of the identified risks. This would lead to development of risk treatment options and risk tolerability. The entire task
would be based on construction of a two storied building in Australia. The paper would also take into account frameworks according
to AS/NZS ISO 31000:2009, ISO 31010:2018 and FMEA.

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Communication and consultation:
The engineering company involved in the construction of buildings should provide consultation and communication strategies
to their clients. The communication strategy should enable continuous flow of the construction related information between the
company involved in the construction of the buildings and the clients. The construction company should communicate the information
regarding the progress in the construction work. Either of the parties should communicate the risks which they might recognize during
and after the construction project. The construction company should provide its specialist knowledge to provide consultation services
to the clients to enable them to mitigate the risks. The two parties my mutual consent can appoint a third party consultant to provide
consultation about risk management plan or RMP1.
Establishing the context:
Identifying all relevant stakeholders:
The construction company involved in the construction of the building should identify all the relevant stakeholders which
should be considered in order to form risk management plan mitigate or at least minimize the risks. The company should divide its
stakeholders into two groups namely, internal and external stakeholders.
Internal stakeholders
The internal stakeholders which should be involved in the RMP are the management bodies and the employees. The apex
management of the company would play the important role in taking decisions regarding the risk management plan. The interests of
1 Iqbal, Shahid, et al. "Risk management in construction projects." Technological and Economic Development of Economy 21.1 (2015): 65-78.

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the management lies in earning higher profits. The constraints of the management lie in that factors that all the members of the apex
management do not have direct access to the clients and they are dependent on the support of the employees, both middle ;level
employees and lower level employees to execute their orders2.
The next group of internal stakeholders are employees of the construction companies. Their main responsibilities lie in
recognizing the risk factors since they are in more direct contact with the market. Their main constraint lies in the fact that they have
no decision making power.
External stakeholders:
The following are the main stakeholders of the construction company involved in the construction of the buildings:
Clients:
The clients consists of the firms and government bodies to enter into contracts with the construction companies to build houses
for them. The main constraints of the clients are they usually lack knowledge of civil construction and lack of proper supervision of
over the activities of the clients [3].
2 Qazi, Abroon, et al. "Project Complexity and Risk Management (ProCRiM): Towards modelling project complexity driven risk paths in construction
projects." International Journal of Project Management 34.7 (2016): 1183-1198.

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Government bodies:
The government bodies are the key stakeholders since they provide approvals and sanctions. The government bodies form laws
and policies which the construction companies have to comply with in order to undertake and execute projects.

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High
KEEP SATISFIED(government)
MANAGE
CLOSELY(management,
employees, Business customers,
individual consumers, investors)
Low
MONITOR (minimum effort) KEEP INFORMED(media,
society)
Low High
INTEREST
Figure 2. Stakeholder Grid
(Source:Author)
Stakeholders Interests
Management of the
construction
companies
Maximum profits, new project acquisitions,
business expansion
Employees Higher compensation, appraisals, promotions,
career development opportunities
Government taxes
Suppliers Maximum revenue by repeat orders for materials,
plants and labour
Financial institutions Purchase of more financial products
Investors Higher returns on invetsments

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Society More affordable and sustainable construction
projects and resultant housing facilities
Rules, roles and responsibilities:
The risk management plan of the construction companies should under the roles and the responsibilities of the key stakeholders
both internal and external in mitigation of risks [2]. For example, the risk management plan would be based on the participation of all
the employees. The lower level employees would be responsible for reporting any identified risks to their middle level managers.
Similarly, the middle level managers would be responsible for communicating the risks up the hierarchy and instructions of the apex
managers to the lower level employees.
Processes and tools:
The following are the processes which the construction companies should apply to mitigate or at least minimize risks:
Risk register:
The management of the construction companies should maintain risk register to record accidents, employee injuries and even
fatalities. The companies should submit the risk register to the relevant authorizes like government bodies on demand.