[Effective Risk MaNagement in Construction Project]

by

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

Signed __________________ Date _________________

ABSTRACT

Compared with many other industries, the construction industry is subject to more risk due to the unique features of construction activities. Risk management aims at identifying sources of risk and uncertainty, determining their impact, and developing appropriate management response. A systematic process of risk management has been divided into risk classification, risk identification, risk analysis and risk response. The ability of a fuzzy system to explain its reasoning process is shown to have definite applicability within the field of risk analysis. Also fuzzy set theory is highly subjective and related to inexact and vague information which we deal in construction projects. This paper describes the development of a fuzzy risk analysis model to assess the risks associated with construction projects. At the end of paper, the proposed model is used to assess the associated risk with a construction operation based on evaluations of three evaluators. The results derived from this model indicate a systematic and effective way for risk analysis. Contingency estimating and management are critical management functions necessary for successful delivery of construction projects. Considering its importance, academics and industry professionals proposed a wide range of methods for risk quantification and accordingly for contingency estimating1. Considerably less work was directed to contingency management including risk mitigate during a project. Generally, there are two types of risks; (i) known risks which can be identified, evaluated, planned and budgeted for and (ii) unknown risks which may occur. These risks require a cost and time contingency, even if they were not planned for, in order to mitigate their impact in an orderly manner. In this respect, the importance of contingency management is critical in view of increasing project complexity and difficulty of estimating and/or allocating sufficient contingencies to mitigate risks encountered during project execution. This paper focuses on the contingency management from two perspectives; estimation and depletion of contingency over project durations.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION8

CHAPTER 2: LITERATURE REVIEW10

Classification Of Risks Associated With Construction Projects10

Reasons for using fuzzy risk analysis for construction projects11

Fuzzy Weighted Average13

Competition Studies in Construction18

Classification of Bidding Models and Strategic Studies19

Original Work by Friedman21

Empirical Tests22

Multiple Regression Techniques24

Internal Conditions, Market Conditions, and Competitors25

Market Conditions26

Go/No-go Decision29

Other Approaches31

Missing Concept in Competition Studies in Construction33

Competition and Mode of Competition34

Empirical Findings36

Studies in Economics and Organization Theory38

Size Distribution of Firms40

Approaches Using Long-run Average Cost Curves41

Equilibrium Approaches42

Evolutionary Approaches42

Discussion and Lessons from Other Competition Studies43

Organizational Culture45

Organizational Risk Attitude48

Strategic Management Studies50

Risk-return Association50

Diversification52

Limits of Empirical Studies54

Characteristics of the Construction Industry55

Fragmentation56

High Entry and Exit Rates57

Derived Demand58

High Risks to Contractors59

Risk and Competition, the Unchanged Characteristics60

Contractors' Business Failure61

CHAPTER 3: METHODOLOGY64

Construct the ...