Guide to Risk Management in Construction
There are many risks that are involved in the line of business. Again, when we talk about construction projects the risks are exponential. Risks such as the project meeting the terms of the contract, the safety of the employees at the job site, natural disasters, etc. If these risks are not met correctly or other unknown risks are not handled properly, it can damage your construction project and prove ruinous to the bottom line. Thus, effective construction risk management is a must for a company. Let's find out more about risks at construction sites in this guest post.
Construction projects are a risky business. Construction sites are the places where "Accidents are waiting to happen". Employee safety, natural disasters, construction mistakes, and so on, there are a lot of loopholes at the site. Thus, managing these risks at construction sites is a constant battle. Nowadays many students pursuing MBA take risk management at construction sites as a specialization. With the competition reaching its peak students are more interested in learning about topics that have a wide acceptance. They have to write assignments too on risk management. Keeping all these points about risk management in construction in mind BookMyEssay has a team of specialists that provide Risk Management Assignment Help.
What is Construction Risk Management?
The process of managing risk at a construction site involves determining and evaluating all the risks present at the construction project site and finding the procedures to minimize these risks. First and foremost is to plan then monitor and then finally control instances that can cause risk. A detailed document has to be prepared and maintained for risk management.
Types of Construction Risks
For a proper controlling of instances of risk, you should be well aware of the type of risks that are present in construction projects. These risks can be due to internal and external sources. Environment, finances, operations can also cause risks. BookMyEssay is here to provide Cheap Assignment Help Australia to the students. They cover all the points related to risk. Let's look into the type of risks:
- Unknown site dangers
- Poorly written contracts
- Safety hazards at the site
- Poorly defined scopes
- Unexpected increase in material costs
- Natural disasters
- Labor shortage
- Availability of building material
- Damage or theft to property
- Poor project management
- Risks involved at the time of delivery
Certainly, these risks can be managed and mitigated. Risks involving costs, schedule, safety, performance are the biggest ones.
How to Manage Risks?
It's a six-step process to manage risk. You need to plan ahead to get control over risk. Students of business administration who study risk management need to know fully about these 6 steps. BookMyEssay has experts on assignments based on risk management, students can approach them 24 by 7. The steps are:
1. Risk Identification: Since you know some of the basic risks in the construction field, it's time to get involved in knowing the risks unique to your project. This step should be carried out at the preconstruction phase of the project. It will provide you with time to manage the unique risks involved in the project.
Carry out a brainstorming session with team members and stakeholders to get a grip on all the possible risks involved. In this way, everyone involved will be able to give feedback according to their experience and expertise. Even references from past projects can help understand the size and scope of risk.
2. Hold Priority for the Risk in the Order of Importance
Risk prioritization should be done on the basis of two factors:
- Impact it will have on the business
- Chance of risk materialization
Another style to handle risk is to take high impact, high probability risk head-on and keep low impact, low probability risks to be addressed at the end. And risks with high 8mpact but the low probability to be addressed at the medium level.
3. Risk Response Strategy: After properly evaluating the risk, you need to come up with a risk response strategy. Let's see the risk response techniques:
- Avoid the risk
- Transfer the risk
- Mitigate the risk
- Accept the risk
Your response strategy depends on your resilience to risk and the reward you will get after the completion of the project.
4. Craft a Risk Management Plan: Once the risk assessment is done you should make a risk management plan. Clearly, this plan helps you optimize risk response strategy, provides details to your team members, provides a set of solutions so as to accept, transfer or mitigate the risk.
5. Communicate with Team Members: Construction Risk is not an issue that has to be handled by some people. It involves the whole team. It requires input from each level of the team. Update on risk should be communicated to every level. The three important players of the construction project are the owners, design team, and the construction team. Everyone should be involved in risk management.
6. Prepare a Contingency Plan: The company should be ready with an alternate plan in case you opt to accept the risk. Like if you take up a project which is in a place prone to earthquakes then you need to convey the safety issues to contractors and engineering issues to the design team.
Risk is present everywhere and in whatever you do. Just don't let your guards down and keep working. The risk management should be ready for you to execute. If the students learning risk management in their degree course, need to have notes or assignments on risk management assignment help, they should contact BookMyEssay.