An Appraisal of Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery

An Appraisal of Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery

Project / Seminar Material
Reference ID: PS-4192-TM

DEDICATION

This research material titled “An Appraisal of Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery” is dedicated to God for his enabling grace, and to all computer enthusiasts who contributed to make life a pleasant experience during my research documentation.

ACKNOWLEDGEMENT

I extend my sincere gratitude to all those who contributed to the completion of this project. Special thanks to my Supervisor (Name of your Supervisor), the Head of Department (Name of your HOD), the Lecturers in the department of Quantity Surveying (QS), Book Authors and Profound Scholars of existing or related project material on “An Appraisal of Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery” for their invaluable guidance, support, and expertise throughout the journey.

I am also grateful to your study area (mention any funding organizations, if applicable) for their financial assistance. This research would not have been possible without the encouragement and assistance of some stakeholders (mention any mentors, teachers, or colleagues). Additionally, I would like to acknowledge the understanding and patience of my family and friends during this endeavor. Your unwavering support has been a constant source of motivation. Thank you all for being part of this meaningful endeavor.

TABLE OF CONTENTS

PRELIMINARY PAGES

CHAPTER ONE

INTRODUCTION

    CHAPTER TWO

    LITERATURE REVIEW

    • 2.1 Introduction
    • 2.2 Conceptual Review
    • 2.3 Theoretical Framework
    • ⋮
    • 2.4 Empirical Studies

    CHAPTER THREE

    RESEARCH METHODOLOGY

    • 3.1 Introduction
    • 3.2 Research Design
    • 3.3 Population of Study
    • 3.4 Sampling and Sampling Technique
    • 3.5 Validation of Research Instrument
    • 3.6 Method of Data Collection
    • 3.7 Method of Data Analysis
    • 3.8 Questionnaire Administration
    • 3.9 Ethical Consideration
    • 3.10 Statistical Analysis

    CHAPTER FOUR

    DATA ANALYSIS, RESULT AND DISCUSSION

    • 4.1 Introduction
    • 4.2 Presentation and Analysis of Data
    • 4.3 Re-statement of Research Questions
    • 4.4 Test of Hypotheses
    • 4.5 Discussion of Findings

    CHAPTER FIVE

    SUMMARY, CONCLUSION AND RECOMMENDATION

    • 5.1 Introduction
    • 5.2 Summary of Findings
    • 5.3 Conclusion
    • 5.4 Recommendation
    • 5.5 Suggestion for Further Study

    REFERENCES

    APPENDIX A - “QUESTIONNAIRE”

    ABSTRACT

    The study was carried out to appraise the Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery. Investigation revealed that the internal barriers were found to be cost and time intensiveness, argumentative sessions that create riskier stance including subjective judgment that lacks accurate results while the external barriers were found to be lack of risk assessment training in place, lack of collaboration by parties on a project, low level of risk consciousness, ineffective monitoring by heads of firms and lack of historical data across the project team's spectrum.

    The research design used in this report is descriptive design, utilizing questionnaire method to obtain information from the respondents for this project. A total of 200 (two hundred) respondents were selected for this study to represent the entire population of the study. Primary data were collected from the primary source which questionnaire was used as an instrument of data collection while secondary data were sources from textbooks, journals, newspapers and the internet were employed. The data were presented on a frequency distribution table and analyzed using simple percentage, while hypothesis was tested using chi-square test.

    The present study hypothesized that there are significant factors are responsible for the internal and external barriers that inhibit their utilization in project delivery in Abuja Metropolis, Nigeria. The study will aid Nigerian quantity surveyors in appreciating the importance of adopting proper risk management techniques in their daily jobs. Since risk management is not widely being adopted in Nigerian construction industry, this research will help to promote the practice of risk management among the industry's players. Based on the findings, it was recommended that the factors influencing these weaknesses and barriers in utilizing the risk management techniques in Project Delivery should be properly addressed.

    An Appraisal of Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery

    CHAPTER ONE

    1.1 Introduction

    Risk management is the most effective project management practices in order to achieve the project delivery and sustainability. Project delivery has become a vital tool to nation’s economic measurement and evaluation. Project success is valued in terms of delivered time, executed cost, work quality and environmental sustainability. Some of the risks associated with construction are poor quality of work, premature failure of the facility, a lack of safety, poor or incorrect design, and financial risks (Mahesh et al., 2007). Risk management plays a significant role in the decision making process. The purpose of risk management is to ensure that all parties to a construction project understand the specific risks specific to the project and work out patterns on how these risks should be managed for effective project delivery (Mills, 2001).

    As a prelude to other parts of this study, this chapter will discuss the background upon which this study was initiated, the statement of problems that led to this study, the Aim and Objectives of the study. Others are Significance of the study, Scope of work, Research hypothesis and questions, Limitation of the study and Definition of technical terms.

    1.2 Background of Study

    Risk management has become an integral process in managing construction projects. Construction project activities are to be well calculated in-order for the deliverable to be of great use and benefit to its stakeholders. To complete most construction projects on time, minimizing cost and wastages proper risk management techniques must be employed (Tchankova, 2002). According to Mills (2001), systematic risk management is expecting the unexpected or in other words it is a tool which helps control risks in construction projects and its objective is to introduce a simple, practical method of identifying, assessing, monitoring and managing risk in an informed and structured way. Normally, in risk management process, the first steps will involves risk identification process which includes the prioritization process in order to identify and rank the risk based on its impact and seriousness. Risk that will have a greater impact on a project normally will be handled first and low impact risk will be handled later.

    Despite its numerous challenges, it is the Construction Industry that shapes the development parameters of any nation (Zeiss, 2007). So a firm grasp of the nature and effects of key issues affecting the Industry is always the beginning of developmental wisdom. The construction industry is bedeviled with global climate change, aging infrastructure, shrinking workforce, declining productivity and Information Island (Akintoye and Macleod, 1997; El-sayeh, 2008; Smith, 1999 Zeiss, 2007; Hillson, 2002; Wang et al., 2004). Gandu and Musa-Haddary (2007) in their work mentioned high risks and uncertainties as additions to these problems.

    However, the capability of the bidding contractors varies. They may all be able to complete the work, but some can accept more of the risks than others. This depends on their skill, personnel, equipment, time, financial strength, organization, desire etc., as well as their risk acceptance profile. These qualities may be amongst the distinguishing factors between bidders to help decide who is awarded the work, but all parties need to understand the risks they are accommodating. The client’s best interests are not necessarily served by contractors competing on criteria such as acceptance of excessive risk (which may be detrimental to the project i.e. pricing low).

    Construction project team consist of professional such as the architect, engineer, and the quantity surveyor that will help to assist and advice the client in order to meet all the project objectives in term of time, quality and cost. Awareness and knowledge on risk management is very crucial so that they will deal with the risk properly which will directly leads to project success. Due to this scenario, this research aims to identify the level of awareness of construction professional specifically Nigerian quantity surveyors towards risk management. Apart from that, it will also aim to identify how risk management being implemented in the Nigerian construction industry and also the potential barrier and challengers in the implementation of risk management specifically from the quantity surveyor's point of view.

    Therefore, in Nigeria where the research was carried out, the activities that was conducted is to appraise the Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery.

    1.3 Statement of Problems

    Investigation revealed that the construction industry is complex and subject to a higher level of risk than other industries, making effective risk management vital (Zeng, An & Smith, 2007). Currently, however, construction firms lack both the proper methodologies to determine and evaluate risk and reliable approaches to eliminate, reduce or mitigate risks. On top of this, there is a lack of government policies regarding risk in the construction industry (Zaneldin, 2006). The challenge is even greater with fast-tracked projects, where the schedule must be accelerated in order to cut costs, but there must be no compromise on quality.

    The risk management process, which involves risk identification, analysis, response planning and control, can be applied to all kinds of projects regardless of their sizes or budgets (PMI, 2006). Project completion within the expected time span has always been the most challenging task for construction companies, with many failing to deliver on the agreed schedule, cost and quality (Rahman et al., 2002).

    1.4 Aim and Objectives of Study

    The aim of the study is to appraise the Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery. In achieving this aim, the following specific objectives were laid out as follows:

    1. To investigate the Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery.
    2. To identify the risks affecting projects delivery in Nigeria’s construction industry and categories them according to their levels.
    3. To investigate various formal risk management concepts and how they apply to construction project delivery in Nigeria.
    4. To analyze the significance of formal risk management technique fast-tracking in the future of Nigeria’s construction industry.
    5. To evaluate various risk mitigation frameworks and propose the most appropriate for controlling risks in the Nigeria’s fast-track projects.

    1.5 Research Questions

    The study came up with research questions so as to be able to ascertain the above stated objectives. The specific research questions for the study are stated below as follows:

    • Are there Obstacles Precluding the Effective Application of Traditional Risk Management Approaches in Project Delivery?
    • What are the risks affecting projects delivery in Nigeria’s construction industry and categories them according to their levels?
    • What are the various formal risk management concepts and how they apply to construction project delivery in Nigeria?
    • What is the significance of formal risk management technique fast-tracking in the future of Nigeria’s construction industry?
    • What are the various risk mitigation frameworks and propose the most appropriate for controlling risks in the Nigeria’s fast-track projects?
    …

    CHAPTER TWO

    2.0 Literature Review

    2.1 Introduction

    This chapter focuses on the review of related literature. A literature review includes the current knowledge as well as theoretical and methodological contributions to a particular topic. It documents the state of the art with respect to the topic you are writing. It surveys the literature in the topic selected. In this research work the literature review includes the …

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