Introduction
Risk management is an activity which constitutes identifying, managing, and coming up with strategies to mitigate and manage risks using managerial facilities. Basically, risks may arise due to various activities, including; threats from the failure of projects, credit risks, accidents, natural disasters and uncertainty in financial markets (Chang et al., 2018). Also, risks can be identified as exposure to chances of occurrence in favour of projects. However, effective risk management in the construction industry through proper planning can increase managers’ awareness of the consequences of risks that are likely to occur in construction industries through a proper risk approach, and better risk information transfer between concerned bodies reduces the high of and chances of losses exposure (Xia et al., 2018). Risk management faces resource allocation difficulties, which concerns the ideology of opportunity cost. For instance, resources spent on risk management may have been spent on more activities that may be profitable. However, risk management enables minimizing spending on the workforce and other valuable resources, which may lead to high risks. As risks are from the development phase of a construction project to the operational phase, it may be more important to mitigate and analyze the risks properly and ensure proper planning to reduce risks that may hinder project construction. Therefore, this literature review will review on; project HSE plans, deliverables and timeline, change management, communication management, contracts management, project cost estimates and Accounts, project scope management and project controls as follows.
Project HSE plans, deliveries, and timeline
Project HSE plans, deliveries and timelines in risk management during project construction can help the organization stay on track and minimize potential risks. By working with an experienced construction management company, the organization can ensure smooth and timely project delivery. In addition, Project HSE plans, deliveries and timelines in risk management during project construction can be challenging. Delays in getting started can cause escalating costs, and unforeseen issues can add to the risk (Thorsen et al., 2020). A well-planned timeline will help to manage these risks and stay on schedule. Lastly, Project HSE plans, deliveries and timelines in risk management in project construction involve identifying risks and mitigation measures for each risk. Identification of risks begins with the identification of the contract requirements and ends with the identification of the system’s operating environment. Project HSE plans, deliveries and timelines in risk control in project construction should be developed in consultation with the system’s operators. They should account for changes that may occur during the project period.
The HSE plan explains the norm of management systems responsible for effectively dealing with the elimination of risks that may lead to adverse damage to the environment and workers in the construction field. The HSE plan is also intended for each implementation and ensures it contains valuable details that safeguard people taking part in project construction. Further, it was noted that the HSE plan policy is responsible for making aware of the on-site personnel’s risks and effects on their safety. It also ensures that the operation is responsible for stopping an activity that may cause immediate disasters to persons on site and the available properties (Thorsen et al., 2020). In general, the primary purpose of HSE is controlling and monitoring; to achieve a proper formulation system, HSE has developed a formulation of remedial activities which cater to risks developed in sites. The assessment leader recommends that the team members be responsible for monitoring the implementation of various controls and making additional recommendations (Xia et al., 2018). The first and most crucial step in developing an effective HSE plan is to conduct a comprehensive risk assessment.
Only by understanding the risks involved can you develop an appropriate response plan. This assessment should consider all potential hazards, both natural and manufactured. Once the risks have been identified, you can begin to develop strategies for mitigating them. When drafting a Health, Safety, and Environmental (HSE) plan for a project, it is essential to consider the risks and hazards that might arise during work. Several risks and hazards can occur during work on a project, and it is essential to consider these when drafting an HSE plan. A project HSE plan in risk management is a document that details the health, safety and environmental risks involved in a project and outlines the measures that will be taken to mitigate these risks. Having a robust HSE plan before starting any project is crucial, as it will help ensure the safety of all workers and the surrounding environment (Xia et al., 2018). A good HSE plan will also help minimize the potential for accidents and injuries and make it easier to comply with relevant legislation. Project HSE plan is an essential tool in risk management. It should be comprehensive and address all potential risks associated with your project. The plan should be reviewed and updated regularly to ensure it is effective.
Change management
Change management is the process of identifying, assessing, and making decisions about changes to projects. It is a crucial part of risk management, as it helps to mitigate the risks associated with changes. Construction companies can face costly delays, missed deadlines, and increased costs without proper change management. There are many ways to change management in risk management in the construction industry. One way is to use change management plans (Halou, 2019). Change management plans help to identify what needs to change when it needs to change, and who will be responsible for making the changes. In order to manage change in a risk-based manner, construction companies must have a sound change management process in place. This process should include identifying all potential risks associated with a change, assessing the likelihood of each risk happening, and deciding whether or not to proceed with the change. Risk management is essential in construction industries to help mitigate project risks. Change management is a critical process in managing these risks and ensuring that the project timeline and budget remain within agreed-upon parameters. Failure to implement change management procedures can lead to costly delays, missed deadlines, and increased costs (Abad, 2019). Hence, this leads to unnecessary cost charges that may lead to the incompletion of the construction process. Therefore, planning should be the essential guide in any construction field to work within the budget without getting disruption by unnecessary work and expenses.
While construction workers are often considered to be at risk, there is a lack of change management in risk management. Proper change management helps mitigate the risks associated with changes, such as those that occur during construction projects. By identifying potential risks and assessing their likelihood, construction companies can make informed decisions about whether or not to proceed with a change. Change management is thus an essential part of risk management in construction industries. Proper change management can help reduce the risks associated with changes by ensuring that all stakeholders are aware of the changes and have the opportunity to provide input (Abad, 2019). Change management also helps to ensure that changes are made controlled and safely, minimizing the potential for disruptions. Change management is an essential part of risk management in construction industries and should be given the attention it deserves. In addition, change management also helps to protect the project timeline and budget. If changes are not managed properly, it can lead to costly delays, missed deadlines, and increased costs. Consequently, change management is essential in construction (Halou, 2019). The lack of change management leads to increased risks and can cause construction workers to be injured. Change. Risk management is essential in construction industries to help mitigate project risks. Change management is a critical process in managing these risks and ensuring that the project timeline and budget remain within agreed-upon parameters.
Communication management
Communication is a mode of imparting and interchanging information and ideas using sign language, writing and speaking. Communication is transferring and type of information between two or more people. Further, project communication should be handled carefully to avoid misinterpretation. Being one of the main elements in the succession of the project, managers should plan adequately on how to share information in a systematic way to meet all stakeholder’s requirements by successful deliverance in projects (Rajhans, 2018). Constructing a successful communication strategy for risk management in construction industries is vital to ensuring the success of any project. While there are several factors to consider when developing a plan, one of the most important is understanding the potential risks and how to manage them.
Constructing a risk management plan begins with understanding the various risks associated with a construction project. Risk can be defined as the potential for something to go wrong and negatively affect the outcome of an Endeavor. In order to effectively manage communication in a risk management process, stakeholder awareness and understanding of the risks must be heightened. This can be accomplished through effective communication planning and implementation strategies. However, due to the often chaotic and fast-paced environment, effective communication is not always possible in the construction industry. This can lead to misunderstandings and increased risks. Communication management is an essential part of risk management in construction industries. Without effective communication, risks may go undetected and unmitigated, leading to costly mistakes and injuries (Rajhans, 2018). Risk management in construction industries is a complex process that requires communication among all involved parties. Effective communication is essential to ensuring that all parties are aware of risks and making informed decisions. Communication can be hindered by several factors, such as language barriers, cultural differences, and uncertainty about the situation. In order to overcome these challenges, effective risk management requires good communication planning.
A good risk management plan will consider all of these factors and develop a strategy for effective communication. In order to do this, the project manager must first understand the risks involved in the project. Once the risks have been identified, the manager can develop a communication plan that will address these risks (Thorsen et al., 2020). The communication plan should include several elements, such as who should be involved in the communication process, what information needs to be communicated, and how the information will be communicated. A risk management plan should consider all potential risks and identify the stakeholders who need to be involved in the communication process. The plan should also identify the types of communication that will be most effective in each situation.
In some cases, face-to-face communication may be the best option, while written communication may be more effective in others. The use of technology, such as email, text messages, and social media, can also be an effective way to communicate with stakeholders. Notably, the main goal of communication in risk management is to ensure that all stakeholders are aware of potential risks and understand their implications. In order to achieve this goal, communication must be clear, concise, and accurate (Thorsen et al., 2020). Good communication also requires that the message be delivered promptly. When communication is effective, it can help to reduce the likelihood of accidents and injuries. Therefore, A good communication plan will ensure that all stakeholders are kept up to date on the latest information regarding the project. It is important to remember that not all stakeholders will have the same understanding of the risks involved.
For this reason, it is essential to tailor communications to the specific needs of each stakeholder group. In some cases, providing more than one type of communication may be necessary. In order to be an effective communicator, it is essential to understand the audience’s needs. Different types of communication will be more effective with different audiences. For example, face-to-face communication may be more effective with workers, while written communication may be more effective with managers. It is also essential to consider the level of understanding of the audience.
Contracts management
Risk management is a process that helps organizations manage the risks of their activities. It helps them make informed decisions about what to do and how to do it. It is a critical part of any business and is especially important in the context of construction projects. There are several different types of risks that construction projects can involve, and each one has its own set of risks and rewards. The primary purpose of contract management is to ensure timely, accurate, and profitable delivery of the services promised in the contracts. Several risks can affect the success of a construction project, and contract management is essential for mitigating those risks (Winge, 2019). Poor contract management can lead to cost overruns, delays, and poor-quality products or services. A written contract between the parties involved in a construction project is essential. This will help to protect both the contractor and the end user. In order to manage the risk of a construction project, it is essential to have a contract in place. This document can be used to define the project’s terms and protect the interests of both the contractor and the end user. Contract management is an integral part of risk management in construction projects. This helps ensure the project is completed on time and within budget. By adequately documenting the contracts, the contractor can avoid any disputes. Also, Contracts management is essential to risk management in construction projects. If a contract is not managed correctly, it can lead to unexpected costs and delays for the project.
Poor contract administration can also create legal and financial risks for the contractor. Therefore, it is essential to have a comprehensive contract management plan in place. Therefore, A good contract management plan includes ensuring that all parties involved in a construction project know their rights and responsibilities. This includes the contractor, the end user, and any subcontractors. It is essential to have a written contract in order to avoid any misunderstandings or disputes down the line. Ensuring everyone understands their rights and responsibilities is key to a successful construction project. Managers must take steps to mitigate the risks of a construction project to ensure that it is completed on time and within budget (Winge, 2019). By adequately documenting the contracts, the contractor can avoid any disputes. Contract management is also an essential part of risk management in construction projects. If a contract is not managed correctly, it can lead to unexpected costs and delays for the project.
Project cost estimates and Accounts
project cost estimation and accounts are the processes by which managers keep all expenses under expected control by managing labour, overhead costs and resources available to ensure project construction completes within the budgets. Cost estimation can be run by following valuable methods that can help managers be in a position to control costs. For instance, with thorough estimation, managers are in an excellent position to manage expenditures. Failure to proper estimations of all costs will fail to lead to the failure of project construction. Good cost estimation and accounts can be successful by involving teamwork to share valuable information that can control costs. Secondly, assertive communication. The team is likely to stay on budget through better communication with the stakeholders and the employees. The managers can control costs and accounts if the team knows what they are supposed to do. With open communication, managers will be in a good position to cope with the potential cost crisis. Therefore, by ensuring regular communication about all valuable tasks, managers can keep their team appraised and stay informed in case of any cost challenges. Thirdly, continuous updates and daily reports. Through daily reports and updates, managers can spot costs that are getting out of control or any disruptions interfering with the construction schedule (Winge, 2019). Through thorough monitoring, managers can reduce the chances of risky costs that may lead to the downfall of project construction. Therefore, ensuring daily reports have adequate details, including equipment usage and specific actions to control cost and accounts.
They are third, having backup plans. Managers should have a backup in place in case of backhoes, subcontractor pulling, or breakdown. Therefore, while making a plan, managers should put the bottlenecks in place and ensure they are controlled to avoid interruption of the construction schedule. Lastly, limited change orders are projected construction’s most significant cost drivers. Hence, eliminating many changes through preparing a working schedule can reduce unnecessary cost usage that may interrupt the project from being completed within the expected budget.
Project scope management
project management is the process of completing a temporary project. The team ensures efficiency, eliminates unnecessary work, and keeps all team workers on the same page at every step in the construction period (Willumsen et al., 2019). Project scope management enables meeting the client’s expectations and keeping the project on the expected and within the budget. Also, it refers to a package of processes that must be completed in order to submit a complete project. Project scope management includes three processes; planning, controlling and closing. Planning involves laying out a budget and principles needed to run a construction successfully. Proper planning works for the team to utilize the available resources and exploit them as expected without wastage. Hence, completion of the project on time within the budget. Controlling involves managing, monitoring, and tracking the project’s progress, including; tracking tasks in each phase, all documents on-site, and scope creep, among others (Borkovskaya, 2018). Controlling keeps managers aware of all happening on the construction site. Closing is a wrap-up part of the construction process, which involves an audit of project accessing and deliveries of the result of the project over the past defined plan.
In project management, the scope is said to be a set of boundaries that define the project and its extent. Therefore, understanding the scope allows the manager and the team to understand the downfalls of the project (Smith, 2020). Activities that fall between the boundaries are considered in scope. In contrast, those that fall outside the boundaries are considered out-scope, meaning the out scope is not planned in the boundaries. Any manager should be aware of the in-scope and out-scope as they move forward with the project construction process. To determine what is in and out of the scope, they should first outline all the valuable details of the project when they are based (Willumsen et al., 2019). Differentiating the scopes will make one identify critical assumptions that will enable one to determine what is considered in scope or out scope. Therefore, by understanding these two types of scopes, the managers can manage construction to its completion within the budget.
Project controls
Project control is the mode which entails the procedures, resources and tools for planning, monitoring and controlling all phases of the capital project lifecycle. Project control consists of risk management, schedule management, and forecasting, among others (Derenskaya, 2018). Project control under risk management is evaluating, identifying and mitigating risks that may hinder the proper completion of a project. Therefore, managers are responsible for foreseeing the risks that may hinder the construction environment and its workers. Project controls and risk management work together for success by identifying any challenges affecting the construction sites. Basically, risks may, at some point, pose threats to project success and hinder the projects from their completion. Therefore, the risk management team and project control personnel have to oversee the threats and deal with the team before they impact the construction process (Derenskaya, 2018). For the success of project construction, project controls and risk managers engage in services like; working with every step of the organization in the boardroom and the ground to identify all possible threats that may hinder project completion and manage risks. Project controls are responsible for creating and implementing tools that are used to manage risks that can be a problem on construction sites. The tools can be reused and updated to help n ensuring the success of the current and future projects without any downfall. Project controls suggest and evaluate improvements and integrations between enterprise management risks and project risk management (Borkovskaya, 2018). Also, developing rules of credit earned value and commodity tracking of different working groups to ensure work is done as expected. In addition, project controls and risk management report cost trending analysis, forecasting, procurement status like; assembly, fabrication and assembly and delivery of critical components, which evaluate the improvement of better performance in the construction site.
Lastly, considering the core bodies of project controls, managers can easily control and run the construction of projects smoothly. It encompasses core factors such as; project planning which involves directives that enable team members to see where they are heading in the process and how they can arrive there (Halou et al., 2019). The necessary thing to consider in planning includes involving all team members, discussing the project’s primary reason, setting the expected time and getting to know the exact budget to work with. Failure to do this planning, the project may not reach its wrap-up phase. Another core factor is risk management which focuses on controlling risks by re-planning, responding correctly, and identifying and analyzing the necessary events that can lead to succession. The main goal of risk management is to improve the positive impact on the project and reduce the likelihood of negative happening in the project. Other core factors are; change management, data structure, and organizational management, among others.
References
Abad, F., Eshtehardian, E., & Taghizade, K. (2019). Framework for proactive change management: Assessing the risk of change in construction projects using fuzzy fault tree analysis. Journal of Architectural Engineering, 25(2), 04019010.
Borkovskaya, V., Degaev, E., & Burkova, I. (2018). The environmental and economic model of risk management and costs in the quality management system framework. In MATEC web of conferences (Vol. 193, p. 05027). EDP Sciences.
Chang, T., Hwang, B. G., Deng, X., & Zhao, X. (2018). Identifying political risk management strategies in international construction projects. Advances in Civil Engineering, 2018.
Derenskaya, Y. (2018). Project scope management process. Baltic Journal of Economic Studies, 4(1), 118-125.
Halou, M., Samin, R., & Ahmad, M. (2019). Impacts of change management on risk and cost management of construction projects. Journal of Project Management, 4(2), 157-164.
Halou, M., Samin, R., & Ahmad, M. (2019). Impacts of change management on risk and cost management of construction projects. Journal of Project Management, 4(2), 157-164.
Rajhans, K. (2018). Effective communication management: A key to stakeholder relationship management in project-based organizations. IUP Journal of Soft Skills, 12(4), 47–66.
Smith, P. G., & Merritt, G. M. (2020). Proactive risk management. Productivity Press.
Thorsen, T., Bokn, T., Meling, T. S., Bjarke, T., Veire, G., Vølstad, J., & Hanssen, S. (2020, May). Execution of a megaproject: Delivering the Johan Sverdrup development ahead of schedule and under budget. In Offshore Technology Conference. OnePetro.
Willumsen, P., Oehmen, J., Stingl, V., & Geraldi, J. (2019). Value creation through project risk management. International Journal of Project Management, 37(5), 731-749.
Winge, S., Albrechtsen, E., & Arnesen, J. (2019). A comparative analysis of safety management and safety performance in twelve construction projects. Journal of safety research, 71, 139-152.
Xia, N., Zou, P. X., Griffin, M. A., Wang, X., & Zhong, R. (2018). Integrating construction risk management and stakeholder management: A systematic literature review and future research agendas. International Journal of Project Management, 36(5), 701–715.
write