Project Risk Management Practices Research Articles

The Dimensional Effect of Optimal Project Risk Management Practices on Project Quality of Selected Construction Companies in Nigeria

In the construction industry, ensuring high-quality standards is a critical aspect of construction projects and plays a pivotal role in the sustained viability and triumph of contemporary construction companies. However, existing literature highlights the persistently subpar levels of project quality within the construction sector. This situation is manifested through cost overruns, time delays, deficient project definition, and fluctuations in project scope, which are indicative of insufficient project risk management practices. Although several studies have examined project risk management practices, little emphasis has been placed on evaluating their impact on quality in the construction industry. Hence, this study examined the dimensional effect of optimal project risk management practices on project quality of selected construction companies in Nigeria. Survey research design was adopted. The population was 202 top management and mechanical department staff of three selected construction companies in Lagos State, Rivers State, and the Federal Capital Territory of Abuja, Nigeria. A sample size of 176 was found to be usable. A validated questionnaire was adopted for data collection. Cronbach’s alpha reliability coefficients for the constructs ranged from 0.74 to 0.98. The response rate was 87.1%. Data were analyzed using the Smart partial least squares structural equation modeling (PLS-SEM) software, which allowed for the testing of path analysis and hypotheses. A confirmatory factor analysis (CFA) was employed to assess the factor loading of the variables. Findings indicated that project risk management practices had significant effect on project quality of selected construction companies in Nigeria (Adj R2 = 0.54, F2 = 0.058, Q2 = 0.507, p < 0.05). The study concluded that project risk management practices improved the quality of the selected construction companies in Nigeria. The study recommended that project managers should establish and implement effective quality management systems that outline clear processes and procedures for ensuring project quality. Develop quality control plans that include inspection, testing, and monitoring activities throughout the project lifecycle. Incorporate quality management standards and best practices, such as ISO 9001, to enhance quality assurance processes.

Effects of Project Risks Management and Sustainability of Manufacturing Industry Projects in Rwanda- A Case Study of Sulfo Industries Ltd

The study assessed project risks management and manufacturing industry project sustainability in Rwanda. Three specific objectives were pursued: to investigate the influence of monitoring and evaluation practices, project risk analysis, and project knowledge and communication on project sustainability. The research followed a descriptive design, utilizing both quantitative and qualitative methods. Out of a total population of 189, 117 respondents were selected through a simple random sampling technique. Data was collected through questionnaires, interviews, and document analysis, and analysis was performed using SPSS version 21. The study revealed several key findings. Project risk analysis was found to have a positive effect on the sustainability of manufacturing industry projects, with a mean of 1.556 and a standard deviation of 0.955. Similarly, risks monitoring and control (mean 1.485, standard deviation 0.813) and project knowledge and reporting (mean 1.501, standard deviation 0.899) were linked to increased sustainability. A strong positive relationship (R=0.884) was identified between these variables. In conclusion, the research underscores the importance of effective project risk management practices, including risk analysis, monitoring, control, and knowledge dissemination, in ensuring the ongoing sustainability of manufacturing projects. The study specifically recommends that Sulfo Industries and other relevant stakeholders should implement these risk management practices to maintain the effectiveness and sustainability of their manufacturing projects in Rwanda.

Project Risk Management Practices and Performance of Construction Projects: A Case of Horizon Construction in Kigali, Rwanda

The general objective was to examine the effect of project risk management on performance of construction of rehabilitation house construction in Kigali, Rwanda. The specific objectives were; to determine effect of project risk assessment, project risk base decision and project contingency decision on performance of commercial rehabilitation in Kigali. Working on that topic would provide a better way to large-scale construction projects. Other scholars who would be interested to work in the same field. The study used relevant theories such as risk management and risk assessment theories. This research used a descriptive study variables, indicators and measurement. A correlation study design was used to establish the association between variables and regression effect size for each specific objectives. The study targeted 180 staffs of Horizon Construction.  A sample of 125 respondents determined using Yamane formula participated in the study process. The sample size was chosen using simple random and purposive sampling techniques. The study collected data using questionnaire and interview guide. The researcher study data using a computer based software known statistical product and service solutions to 26.0 to generate descriptive and inferential statistics. Qualitative data was analyzed using content analysis through themes and subthemes. Findings show that 57.3% show a disagreement with the analysis of risk was the focus at rehabilitation houses construction. Estimating risk given to respondents where 68.3% a positive agreement with the statement. Review technique was agreed by 85.5%. The study discovered that after having an interview with the rehabilitation houses construction. The study results show that 59.3 at a mean of 3.63 and standard deviation of 1.135 demonstrated an agreement that Horizon Construction applied managing change orders, 66.7% evidence that Horizon Construction has poorly written contact. Moreover, 63.4% accepted that the statement that Horizon Construction felt that all customers were given a time of allocation of decision and 65.4 agreed that the Horizon Construction prepared how they are managing decision with a mean of 4.18 and standard deviation of 1.14. Findings reiterate that 56.8% accepted that program management, 57.8% indicated that Horizon Construction was the implementation a mean  of 4.13 and standard deviation  of 1.37, 74.0% confirmed the used of program improvement with a mean  of 1.85 and standard deviation  of 1.28. The study recommends that the need of careful project risk management or availing the supervisor of construction work to be sure with the completion of project on time with timely. Result will minimize the effect of challenges and seizure of change that appear. The study proposed the Horizon  Ltd to avail supervisory activities toward construction project or being sure that managing risks should comprise the preventive techniques or meeting the due date and effective use of resources. Benefits of risk management in projects are huge. Keywords: Project Risk Management Practice, Risk Base Decision, Contingency Decision, Performance of Construction, Construction of Rehabilitation Houses

Integrated priority decision index for risk assessment in chaos: cost overruns in transport projects

Purpose Cost overrun is inherent to project chaos, which is one of the key drivers of project failure. The purpose of this paper is to explore the critical elements of complexity-risk interdependency for cost-chaos in the construction management domain by utilizing a multi-criteria decision model. Design/methodology/approach A total of 12 complexity and 60 risk attributes are initially identified from the literature and using expert’s judgements. For the development of a structured hierarchy of key complexity and risk drivers, a real-time Delphi process is adopted for recording and evaluating the responses from experts. Afterwards, a pair-wise comparison using analytical network processing is performed to measure complexity-risk interdependencies against cost alternatives. Findings The findings of the integrated priority decision index (IPDI) suggest that uncertainties related to contingency and escalation costs are the main sources of cost overrun in project drift, along with the key elements such as “the use of innovative technology,” “multiple contracts,” “low advance payment,” “change in design,” “unclear specifications” and “the lack of experience” appear to be more significant to chaos in complexity-risk interdependency network. Research limitations/implications This study did not address the uncertainty and vulnerability exit in the judgment process, therefore, this framework can be extended using fuzzy logic to better evaluate the significance of cost-chaos drivers. Practical implications These results may assist the management of cost overrun to avoid chaos in a project. The proposed model can be applied within project risk management practices to make better-informed technical decisions in the early phases of the project life cycle where uncertainty is high. Originality/value This research addresses the importance of cost overruns as a source of project chaos in dynamic systems where projects reach the edge of chaos and progress stops. A new IPDI index contributes toward evaluating the severity of complexity and risk and their interdependencies which create cost-chaos in infrastructure transport projects.

Value creation through project risk management

Risk management is a common and widely adopted project practice. Practitioners use risk management based on a common assumption that risk management adds value to projects. Yet, in the complex and ambiguous environment of a project, value is often subjective. If this is the case, then how do stakeholders perceive project risk management to create value? This paper presents a literature review and an empirical study of project risk management as a means of creating value. The empirical study is based on interviews, analyzed through qualitative analysis, to unravel the subjective value of project risk management. Specifically, we addressed how practitioners perceived the connection between project risk management practices and value creation. We found that stakeholders' perceptions of value played an important role in how value was created through project risk management. What a stakeholder perceives to be important, such as the prospective outcomes of a project, influences the perceived value of a given project risk management practice. The empirical findings indicate the need for a contextualized understanding of the value of project risk management, and thereby provide a more nuanced view of the variety of forms through which project risk management can create value. The findings question the “universal ideal” of PRM value creation portrayed in the academic and practitioner literature.

Influence of Project Risk Management Practices on the Performance of Cement Manufacturing Firms’ Projects in Kenya

Influence of Project Risk Management Practices on the Performance of Cement Manufacturing Firms’ Projects in Kenya

Project risk management practices: the organizational maturity influence

PurposeThe purpose of this paper is to identify patterns of project risk management (PRM) practices’ adoption, and provides empirical evidence concerning the importance (and key attributes) of organizational PRM maturity to the use of risk-related practices and project performance.Design/methodology/approachThe research involved two phases: interviews with five project managers, and a worldwide survey of project managers that resulted in the analysis of 865 valid questionnaire responses. Cluster analysis was used to classify PRM practices’ use, factor analysis to detect the structure of the relationship between the variables measuring PRM practices’ use and a multiple regression analysis (with canonical correlation) to further reveal the different degrees to which PRM practices and organizational maturity are associated.FindingsThe identified patterns of risk practices’ adoption indicate that different contexts of organization PRM maturity and project complexity influence practices selection. The PRM practices related with targets (e.g. time-phased budget plan) are the most used, and those related to tools and techniques (e.g. S-curve) are the least used. Additionally, the obtained results confirm that organizational PRM maturity influences risk practices’ usage, moderated by project complexity, and organizational PRM maturity influences project performance.Originality/valueEmpirical methods were used to investigate the relationship between organizational PRM maturity and a large set of PRM practices with project complexity as a moderator. Gaps in the use of PRM practices (i.e. areas where more PRM knowledge and training are needed) were identified. Finally, this work identifies the attributes of organizational maturity with implications in practices’ usage and project performance.

Customisable framework for project risk management

PurposeThe purpose of this paper is to emphasise on the need for efficient and effective project risk management practices and to support project managers in increasing the cost certainty of projects by proposing a new framework for project risk management.Design/methodology/approachThe author adopts a “constructivist” methodology, drawing on practices common in construction management sciences and new institutional economics.FindingsThe author presents a holistic and customisable project risk management framework that is grounded in both practice and academia. The framework is holistic because, amongst others, all steps of the typical risk management process are addressed. The framework is customisable, because it allows for alternative ways of implementing the project risk management steps depending on the project-specific circumstances.Research limitations/implicationsThe framework does not address the potential unwillingness of the project players to set up a project risk management process, at all. The proposed framework has not yet been tested empirically. Future research will seek to validate the framework.Originality/valueThe framework is designed to account for the difficult circumstances of a complex construction project. It is intended to support decision makers in customising a practical yet comprehensive project risk management concept to the characteristics of the unique project. Although many other project risk management concepts are designed based on the assumption that actors are perfectly rational and informed, this framework’s design is based on the opposite assumption. The framework is dynamic and should adapt over time.

Risk management for sustainable restoration of immovable cultural heritage, part 1: PRM framework

Purpose – The purpose of this paper is to introduce and develop a knowledge base for the restoration industry to understand and deal with risks arising in restoration projects in a sustainable way. Restoration projects face a number of risks and are viewed unfavorably. The research study, therefore, is expected to generate interest and debate among the professional and researcher community in the arena of restoration of built cultural heritage for formally applying Project Management (PM) and Project Risk management (PRM) theories and practices. Design/methodology/approach – The research method consists of reviewing published literature and analyzing the dynamics of restoration industry (both from academic and practitioner point of view) in order to propose an application framework. Building upon and taking inspiration from the fundamentals of Construction Management, the proposed framework aims at methodically applying risk management within the proposed PM stages. Findings – Research results confirm that the restoration industry has not yet exposed to formal PM and PRM theories and practices to a greater level. The restoration projects are not necessarily so sustainable in their approach. Thus, there is enormous impetus and ensuing incentive for incorporating the formal theories and customized tools. Research limitations/implications – This research attempts to target the exceedingly important area of cultural heritage restoration and the missing aspect of PM and PRM. Further, the proposed framework is an attempt at bridging communication gaps between management and restoration experts. Thus, it highlights the importance of scientifically and effectively managing restoration projects. Nevertheless, this uniting attempt has its own risks in terms of terminologies, technical language, and the understanding of risk and its management which may be the effective limitations. Since in the field of engineering as well, the foundation of PM and PRM areas of knowledge finds its traces in Construction Management – which is further an application of management in construction engineering – therefore, it is rather challenging to reconcile knowledge from different areas. Practical implications – The paper explores issues concerning sustainability of restoration projects based on their use of PM and PRM. Results are expected to help stakeholders of restoration projects understand and apply the proposed PRM framework. This study is also aimed to develop a foundation for dissemination of PM and PRM knowledge in the restoration industry, and provide an impetus for future studies to examine how restoration projects can deal with risky situations. Social implications – The paper explores the sustainable development aspects of restoration projects in order to help stakeholders of built cultural heritage make critical decisions because if not managed properly, risks in a restoration project may either cause project failure or damage the historical buildings. Therefore, from a sustainable perspective, it is imperative that stakeholders identify, analyze, control and manage risks before commencing the restoration activities. Originality/value – The study is an original effort in examining the penetration of PM and PRM practices in restoration industry. Based on it, the study proposes an original framework for application of formal PRM for restoration projects. Results are of relevance in today's world where risks hinder and sustainability guides the decision making.

Managing IT Projects in Public Companies: A Case Study

As part of its public sector modernization effort, a North African government has put a lot of effort and allocated significant budgets since 1997 to modernize one of its main public sector companies. Consequently, this company, that mainly offers postal services, initiated many IT-based projects to computerize all paper-based ongoing services offered through its branches and to present new products to customers. This company was aiming to improve service quality and to diversify the range of its services. However, some of these IT-based projects inevitably faced problems. Some projects were either not completed successfully, cancelled, over-budget or taking more time than scheduled. As a result, many employees and customers of this company were dissatisfied and complained about bad planning, slowness and significant disruptions in these projects, an event that affected adversely the quality of service. This study aims at determining the causes of these project disruptions, failures or delays. To achieve this aim, 30 experienced project developers and engineers working in that company’s IT department volunteered to respond to a detailed questionnaire specifically developed for this purpose. The questionnaire included questions about project vision clarity, time/cost management, project quality assurance, risk management and human resources management. Results show that the main reasons for disruptions, failure or delays in IT projects are lack of business plan and poor documentation during and after finishing projects, lack of clear quality assurance criteria, standards and reviews, and poor project risk management practices. Ramifications of such results in terms of improving IT project management practices in the public service sector are finally presented.

Project risk management practices in the UAE construction industry

Managing risk is fundamental to the successful delivery of construction projects. Construction companies respond to risks by adopting various risk management practices. There is a need to evaluate these practices in order to identify deficiencies and to identify key barriers impeding the successful implementation of a comprehensive risk management process. A questionnaire was developed and distributed to construction professionals in the UAE. Respondents indicated that they apply risk management processes frequently especially risk identification and quantification. Although most companies employ risk management practices, there is a need to improve certain practices and increase their frequency of use. Some of these practices include using decision trees, planning risk responses and assigning risk response owners. Respondents from international and local companies agreed on the top three barriers to risk management implementation which are managers’ understanding of the techniques, finding suitable risk management methods and difficulty in obtaining estimates and assessment of probability.

A comprehensive study of Software Risk Management

The challenges and realities in applying effective software risk management processes are difficult, in particular integrating the risk management processes into software development organizations. However, the benefits of implementing effective risk management tools and techniques in software development project are equally great. It provides a disciplined environment for proactive decision-making to assess continuously what can go wrong; determine what risks are important to deal with; and implement actions to deal with those risks. Current perceptions and emerging trends of various software risk management practices are reviewed and risks specific to software development projects are identified. Risk management planning addresses the strategy for risk management, the risk management process, and the techniques, methods, and tools to be used to support the risk management process. If risk management process is in place for each and every software development process then future problems could be minimized or completely eradicated. This paper addresses lessons learned from implementing project risk management practices in software development environment and recognizes the increasing role of risk management in present software projects and aims at providing more support in this area. Keywords: Risk management tools, Risk management planning, Risk management process, Software development

Relacionamento entre gerenciamento de risco e sucesso de projetos

Este trabalho apresenta os resultados de uma pesquisa feita em quatro estados brasileiros sobre adoção de práticas de gerenciamento de riscos em projetos com diferentes tipos de complexidade. A pesquisa de campo envolveu 415 projetos de nove setores econômicos distintos. O material obtido foi coletado por meio de questionário aplicado em gerentes e membros de equipe de projetos. Os resultados mostraram que há impacto significativo e positivo da adoção de práticas de gerenciamento de riscos no sucesso dos projetos. Mostrou também que há dependência entre percepção de sucesso e presença/ausência de gerente de risco, havendo impacto positivo da presença do gerente de risco no sucesso dos projetos. As principais limitações da pesquisa concernem às escolhas metodológicas de amostra não probabilística, empregando questionário baseado na percepção dos respondentes. O trabalho originalmente integra a visão de práticas de gerenciamento de riscos com resultados em projetos, servindo de base para novos estudos em outros setores e áreas de conhecimento de projetos.

Measuring project risk management process for construction contractors with statement indicators linked to numerical scores

PurposeThere is relatively low implementation of formal project risk management methods in practice, leading to the construction industry consistently suffering from poor project performance. This study aims to ascertain the extent to which current project risk management practices are used by construction contractors in one of the countries of the sub‐Saharan region – Malawi.Design/methodology/approachA management process tool with statement indicators linked to numerical scores was conceived that characterised a series of steps of project risk management process. To ascertain the degree to which project risk management processes were used, a questionnaire survey was employed. Data were elicited from registered Malawian construction contractors on the elements underlining a series of steps of project risk management process as espoused by the literature. Out of 84 sampled construction contractors, 51 completed questionnaires were received.FindingsApart from large‐sized and more experienced construction contractors, all the small and medium‐sized construction contractors – which constitute the largest proportion of the construction industry – were characterised by a low implementation of the various required steps for the project risk management process. The application of project risk management processes was significantly influenced by the various categories of size and experience of the surveyed construction contractors at p<0.01. Furthermore, contingence planning within the series of steps of project risk management process featured highly among the surveyed construction contractors. The majority of the variables under the series of steps of project risk management process were positively and significantly linked to progression in size and experience of construction contractors at p<0.01.Research limitations/implicationsThe study forms the basis for further research; replication of this study to other parts of world about how the actual implementation of the series of steps of project risk management process is undertaken could yield rich lessons for the construction industry.Practical implicationsThe intentional move by industry towards measuring management processes as a precursor to uncovering the root causes that underlie project success or failure to provide quick feedback for remedial action is supported by an approach such as this.Originality/valueThe originality of this paper lies in its uniqueness for a systematic approach to quantifying the project risk management processes with the view to understanding the implementation behaviours of construction contractors in one country in the sub‐Saharan region.

Perceptions of owners in German construction projects: congruence with project risk theory

The construction industry is a major user of formal project risk management practices, yet risk is often dealt with inadequately, which is a contributory factor to poor performance. Conceptual developments propose a holistic view of risk incorporating threats and opportunities and the management of uncertainty. To optimize a risk management process there needs to be a reflection of this holistic view in management practice. A key project participant is the owner and understanding the perceptions of project risk of construction owners is an important step in assessing the degree to which practices reflect theory. Semi‐structured interviews were conducted with 10 practitioners in German construction owner organizations to explore their perceptions of project risk. The results showed no common definition of project risk and a general belief that risk equated to threat. Some owners did manage opportunities and saw a link between threats and opportunities, yet this practice seemed more the result of experience than an awareness that it was an integral part of a theoretical risk management framework. Most owners perceived risk to encompass uncertainty and the sources of uncertainty perceived as most important were those linked to a longer timescale, such as the ability to let out buildings.

Defining uncertainty in projects – a new perspective

The aim of this paper is to discuss the phenomenon of uncertainty in projects and attempt to integrate it as part of project management. Despite the fact that project risk management discipline has gained a lot of attention in the past decade from both academia and practitioners, there is still considerable potential for development in this field. Recent trends in project management stress the need to readdress the issue of uncertainty. Though one can come across the notion of uncertainty in traditional project risk and uncertainty management literature rather often, there is no common understanding between the scholars as to what this term means. Based on the review of the existing research, we present our own definition of uncertainty as a crucial element in managing projects. We argue that key elements in managing uncertainty are reflective learning and sensemaking as enablers of flexibility and rapidness in decision-making regarding the choice of alternative actions in response to the situation. This approach is suggested in order to facilitate and maximize the outcome of project risk management practices.

Project risk management: lessons learned from software development environment

The challenges and realities in applying effective software risk management processes are difficult, in particular integrating the risk management processes into software development organizations. However, the benefits of implementing effective risk management tools and techniques in software development project are equally great. Current perceptions and emerging trends of various software risk management practices are reviewed and risks specific to software development projects are identified. Implementing effective risk management process will succeed by changing the organizational culture. This paper addresses lessons learned from implementing project risk management practices in software development environment.

Managing project risks: a case study from the utilities sector

We examine the project risk management practices in a British utility, which manages its information systems and business change projects using the Prince2™ method. This method has greatly increased the success rate of projects run within the company, but has little in the way of directing Project Managers in handling project risk. We review current project risk management literature. We then explore the current usage of risk management in the utility's projects, and determine the effect of risk management on project success. We conclude by outlining recommendations for improving projects run in the utility and elsewhere.