Risk Management Practices-Free-Samples for Students-Myassignment

Question Discuss about the Risk Management of the Construction Industry. Answer: Introduction Construction sector is one of the growth engines of the economic growth of a country. The increased pressure to improve the quality and productivity of the projects and reduce the construction costs there is need to adopt the project strategies that can appropriately and effectively manage the project risk (Augustine, et al., 2013). Risk is defined as a positive or negative deviation of the variable from its expected value. Risk management involvement the strategies that avoid the losses and use the available chances that arise from the risk (Macomber, 2017). Risk management in the construction projects includes the identification, analysis and response to the risk in a comprehensive and systematic way to achieve the project objectives. The risk management is the process of identifying and analyzing the risks and then improving the processes of the construction projects and achieving effective use of the resources (Shaikh, 2015). The current economic conditions have forced the contractors of the construction sector to manage the risk by themselves. This paper include the research aims to examine the risk management practices that can reduce the overall cost of the projects (Gajewska Ropel, 2011). Literature Review Construction projects can be managed with the use of various tools and techniques of the risk management. Risk can be considered as the biggest driver of the claims and projects that transfer more risk to the contractor are more likely to have more claim. Hence the drivers of risk are aggressiveness of the contractors' bids, fast track projects and the contracting strategy (Wilson, et al., 2014; PM4ID, 2017). The project risk management is an effective tool to identify and manage a risk to obtain the objectives of the projects, including cost quality and schedule (Hak, et al., 2017). A number of studies have focused on the project risk management but only a limited number of studies have provided a proper guidance for the proper risk management and cost reduction. Managing risks in construction projects is considered as a very important procedure in order to achieve project objectives in terms of cost, time, quality, safety and environmental sustainability (NAP, 2017; Nap, 2016). The categories of risk include the technical, environmental, external organizations and project management. Formal risk analysis and management techniques are important to construction projects to minimize time and cost of projects and enhance profitability (Schieg, 2006; TheIRM, 2013). As per a study risk and uncertainty are the primary factors for the cost overruns and schedule delay. The study suggested the project risk management tool to manage the cost overruns and time overruns in the construction projects (Banaitiene Banaitis, 2012). Research Questions, Aims, Objectives and Sub-Goals The major aim of the study is to identify the risk management practices in the construction projects that can help to reduce the overall cost of the project. Objectives of the study To identify the most suitable risk management technique to reduce the cost of the construction project Sub goals To identify the current risks that exist in the construction industry To evaluate the risk management practices that are related to the cost To identify the risk management practices that can reduce the overall cost of the production To identify the target audience most suitable for the research analysis Research Questions What is the process of the risk management? How cost is related to the risk management? How risk management practices can reduce the overall cost of the construction projects? Which risk management technique is the most suitable technique to reduce the cost in the construction industry? Theoretical Methodology As the research study is related to the construction industry and the risk associated to this hence the theoretical basis of the research will be based on the understanding the types of risk that may occur in the construction industry. Further the theoretical methodology will include the steps of the risk management such as identification of the risks, analyzing risk, accessing risk, controlling risk and monitoring risks. Further the study will look into the risk management importance in the progress of the projects (Stakeholdermap, 2017). No hypothesis will be developed in the study as here the study is not related to identify the relationship between the risk management and cost reduction rather it is related to identify the risk management practices that help in reducing the overall cost of the construction project. Risk management is regarded as one of the nine knowledge areas and this has been given by the project management institute (PMI). First chapter of the report is related to the relevance of the report which indicates the background of the report. Once it has been completed after that literature review have been conducted which contains viewpoint of the previous report. Third section of the reports contains aims, objectives, and research questions. These are related with the risk management practices and its impact on the cost of the construction project. After defining aims and goals theoretical methodology of the report has been stated (Burtonshaw-Gunn, 2017). Experimental Setting As the aim of the study is to identify the opinion of the contractors on the significance of the construction project risks and to explore the risk analysis and risk management practices to reduce the cost hence a survey will be conducted with the contractors of the construction project. To conduct the survey and analyze the results first of all the literature review will be evaluated and research gap will be analyzed. After that on the basis of the research gap and research objectives as set of questions will be prepared conduct the survey with the target audience. The target audience will be decided as per the suitability of the researcher and the respondents. As the contractors are the one who carry out all the construction projects so they are well aware of all types of risks related to the construction projects and how they handle those risk of cost and time with the help of various risk management practices. A questionnaire will be prepared and distributed among the contractors and they will be asked to sill the questionnaire on the basis of their experience. The study is based on the Australia so the eligible respondents for the research will be all the contractors working in the country but it will not be possible for the researcher to collect data from the all the contractors as it will very time consuming and costly hence a single city will be selected and all the contractors from that city or region will be considered as respondent for the survey. The collected data will be evaluated with the help of the statistical tools and final result will be derived accordingly. Data collection from the contractors will provide the actual scenario of the construction industry and real situation of cost overrun handled by the contractors by performing the risk management practices (Serpella, et al., 2014). The practical implication for the research will be related to the generalization of the collected data on the overall population. There may be situation that contractors from different location follow the different risk management practices to reduce the overall cost of the construction because the risk management practices are dependent upon the types of risk that may arises and type of risk include the environmental risk, external risk and political risk. These risks may differ for different locations. Result, Outcome and Relevance In this research study both quantitative and qualitative data will be considered to research to the final results. As explained above the data will be collected from the contractors of the construction project. The variables of the project will include the risk management practices and cost control. Through this research the results related to how the risk management practices in the constructions sector reduce the overall cost of the project will be derived. From the final results the research will conclude the strategies for the construction sector of the country to overcome the issue of the cost overrun and complete the project within the stipulated determined cost. As construction industry is most prone to risk of the cost overrun and timely delay of the projects hence this research study will be beneficial for the construction industry of the country (Khemani, et al., 2010). Project Planning and Gantt chart The outline of the research paper will include the introduction, theory, survey, result, discussion and conclusion (Eldosouky, et al., 2014). Work Breakdown structure (WBS) Work breakdown structure is defined as the detailed list of tasks explaining the entire project execution and implementation. This helps in understanding the project in detail and helps in productive planning considering all risks and time factors. Work break down structure is in general created so that clear understanding relating to the application development can be provided to everyone. The work breakdown structure for this project to conduct a study to identify the risk management practice that reduces the overall cost in a construction project is as follows Figure 1: Gantt Chart Figure 2: Gantt Chart Milestone Activity Task Preliminary Study Survey Identification of the problem Reviewing the current trends in the construction industry Listing out the current risks and challenges Development of the Aims and Objectives Reviewing the previous studies on the same topic Understanding the reasons for cost overrun Research Planning Development of Schedule of conducting the research List out various tasks involved Identify required manpower Identify timelines to finish various tasks Prepare a baseline schedule for the project Research Analysis Technical Requirements Preparation of process flow for application Exploring statistical tools and other requirements Finalize the technical details Cost Analysis Prepare cost sheet for completion of each task Estimation of total project cost Approval on cost requirements Timelines Prepare a detailed timeline Estimate the project period Approval on timelines requirements Theoretical Background Literature review Completion of final literature review Progress Report Methodology Design Prepare the methodology design Define research Approach Research Strategies Define Target Audience Questionnaire Design Selection of the type of questionnaire Sub-division of the questionnaire in sub-segments Reliability testing Testing the reliability and validity of the questionnaire Resolving the loopholes and updating the questionnaire accordingly Data collection, data analysis and findings of the data Data Collection Data collection from the target respondents through mode of survey Final preparation of data in the report form in the MS Excel Data Analysis Use of statistical tools to evaluate and generalize the data Final evaluation of the data to deduce results Closure Final conclusion, implications and recommendations Submission of report supporting documents Conclusion On the basis of the above discussion about the layout of the project, aims, objectives, methodology, theoretical framework, literature review and key review of the milestones and deliverables the paper will conclude the most appropriate risk management practice in the construction industry that will reduce the overall cost or cost overrun of the project. The contractors are the main player in the successful execution of the risk management practices. This research paper will impact the overall construction industry in a long run as this research paper will provide the significance of using the risk management practices in the construction projects. Finally, by covering the research gap of the previous literature this research paper will provide significant knowledge to the future researchers about the current construction industry scenario and suitable risk management factor on the basis of the situation. References Augustine, I. E., Ajayi, J. R., Ade, B. A. Adakole, A., 2013. Assessment of Risk Management Practices in Nigerian Construction Industry: Toward Establishing Risk Management Index. International Journal of Pure and Applied Sciences and Technology, 16(2), pp. 20-31 . Banaitiene, N. Banaitis, A., 2012. Risk Management in Construction Projects. In: Risk Management-Current Issues and Challenges. s.l.:InTech. Burtonshaw-Gunn, i. A., 2017. Risk Management in Construction Projects. [Online] Available at: https://www.gpmfirst.com/books/risk-and-financial-management-construction/risk-management-construction-projects [Accessed 2017]. Eldosouky, I. A., Ibrahim, A. H. Mohammed, H. E. D., 2014. Management of construction cost contingency covering upside and downside risks. Alexandria Engineering Journal, 53(4), pp. 863-881. Gajewska, E. Ropel, M., 2011. Risk Management Practices in a Construction Project a case study, Gteborg, Sweden: Chalmers University of Technology. Hak, C. et al., 2017. Risk Management Model of Construction Projects Using WBS Generator linked 4D CAD. [Online] Available at: https://itc.scix.net/data/works/att/b763.content.08955.pdf [Accessed 2017]. Khemani, K., Walters, N., Wolff, J. Kearney, A., 2010. Improving Construction Cost and Schedule Performance Through Risk-based Estimating and Contracting, PennWell Corporation. Macomber, J. D., 2017. You Can Manage Construction Risks. [Online] Available at: https://hbr.org/1989/03/you-can-manage-construction-risks [Accessed 2017]. Nap, 2016. Risk Identification and Analysis. [Online] Available at: https://www.nap.edu/read/11183/chapter/6 [Accessed 2016]. NAP, 2017. Methods for Reducing Claims. [Online] Available at: https://www.nap.edu/read/11846/chapter/9 PM4ID, 2017. 11.2 Risk Management Process. [Online] Available at: https://pm4id.org/chapter/11-2-risk-management-process/ [Accessed 2017]. Schieg, M., 2006. Risk management in construction project. Journal of Business Economics and Management. Serpella, A. F., Ferrada, X., Howard, R. Rubio, L., 2014. Risk Management in Construction Projects: A Knowledge-based Approach. Procedia-Social and Behavioral Sciences, Volume 119, pp. 653-662. Shaikh, M. M., 2015. Risk Management in Construction Projects. International Journal of Current Engineering and Scientific Research , 2(2), pp. 150-155. Stakeholdermap, 2017. Risk Management in Construction. [Online] Available at: https://www.stakeholdermap.com/risk/risk-management-construction.html [Accessed 2017]. TheIRM, 2013. Managing Cost Risk Uncertainty In Infrastructure Projects, The Institute of Risk Management. Wilson, C. R., Tran, D. Molenaar, K. R., 2014. Program Risk Management Approach To Reducing Cost Uncertainty In Highway Projects.