Concept Of Risk And Risk Management Construction Essay

Construction is a procedure that involves a series of phases for its successful completion. Building building itself does n’t get down until a set of predating activities are carried out to find what should be constructed and how it should be constructed. It can so be said that projections are made towards what will be involved in the procedure of such buildings and how they will be accomplished. Projections are based on programs for futuristic events which in themselves are made up of uncertainnesss. Uncertain fortunes by and large have been established to be surrounded by hazards as they consist of several unknown events. It can so be said that constructing building undertakings are usually executed under an environment characterised by changing grade of hazards and uncertainnesss, which can ensue from known, known-unknown, and unknown-unknown conditions as stated by Smith ( 1999 ) . A building undertaking that does n’t adequately see and cover with these unsure conditions by and large tend to do cost and/or clip over tally or in some instances project failures ( Thompson and Perry, 1992 ) . This write up efforts to give a position of hazards in the lodging building sector in Nigeria, its effects and effectual direction for undertaking success.

Concept OF RISK AND RISK MANAGEMENT

Hayes et Al ( 1998 ) established that all signifiers of building plants ( whether large or little ) have some signifier of hazard and uncertainness. Hazard has been defined independently by different authors, but the HM Treasury defines hazard as uncertainness of result, whether positive chance or negative impact. It can be said from this definition that non all hazards end up with negative impacts on the undertakings ; instead some provide chances for betterments as the undertaking progresses. Many authors and perceivers though tend to concentrate more on the negative impacts of hazards on building undertakings as they ( hazards ) have the inclination of doing undertaking failure when they are non good tended to. It has been established that the building industry is the 2nd most hazardous industry, merely behind excavation industry. Hence attempts should be put every bit much as possible to extenuate it so as to cut down its terminal consequence which could include constrain in the accomplishment of the key undertaking aims of clip, cost and quality. Ashworth and Hogg ( 2002 ) explained that all undertakings have life rhythms or a sequence of phases and activities from beginning to completion and there is ever a grade of hazard associated with each phase.

Hazard starts right from the determination to put in a building undertaking ( as there could be alternate investing that could convey in better output to the investor ) and runs through the procedure of building till the terminal of the undertaking. Hazard in building can come in different signifiers e.g. physical hazards, environmental hazards, design hazards, logistics hazards, fiscal hazards, legal hazards, political hazards, building hazards, proficient hazards, procurance hazards, operational hazards etc. These hazards harmonizing to Mbachu and Vinasithamby ( 2005 ) can be classified loosely into ; Internal ( governable ) hazards and external ( unmanageable ) hazards. Internal hazards are those that by and large fall within the control of clients, advisers and contractors while external hazards on the other manus include hazard elements which are non within the control of cardinal stakeholders. Central to the subject of building undertaking direction is understating hazard. Hazards are chiefly concerned with baleful conditions and events, their chances and effects ( Busby and Zhang, 2008 ) . The undertaking director should endeavor to pull off hazard to forestall it from interrupting the undertaking. The director ‘s end is the entire direction of hazard – proactively and reactively as argued by Pavlak ( 2004 ) , therefore the demand for a proper and effectual hazard direction system.

Flanagan and Norman ( 1999 ) described risk direction as a method of goodA projectA managementA and planning, because the concern ofA buildingA is inherently hazardous. Concisely, Kerzner ( 2009 ) defines risk direction as the act or pattern of covering with hazard. He farther went to state that this procedure includes planning for hazard, placing hazards, analysing hazards, developing responses to them and supervising & A ; commanding them to find how they have changed. Winch ( 2010 ) points that building undertakings are unsure escapades, there will ever be surprises as the unexpected happens. The primary concern for pull offing hazards in undertakings is to believe through the undertaking before it starts. The aim of hazard direction is to develop an organized model to help determination shapers to pull off the hazards, particularly the critical 1s ( Perry and Haynes, 1985 ) . This model includes ; hazard designation, hazard analysis, hazard response and hazard monitoring & A ; control.

Hazard designation is the first phase of the model and entails finding what hazards are involved in the undertaking. At this phase a survey is organised to acquire all possible hazards that might be associated with the undertaking, separating between their beginning and their impact on the undertaking. Oladokun et Al ( 2010 ) province that it is desirable to understand and place the hazards every bit early as possible, so as to set in topographic point best response possible for decrease of negative impact they can hold on the undertaking. Methods used at this phase include, historical information, checklists, brainstorming etc and it is advised that every bit many people as possible be involved in this survey to convey out every bit much hazards as can be identified. The hazard analysis phase assesses the identified hazards with an purpose to cognize their chance of happening and the impact on the undertaking if/when they occur. This procedure is carried out utilizing either the qualitative or quantitative attack concentrating more on the possible impact of high chance hazards. The following phase is the hazard response phase which occurs when a hazard ‘s possible causes and effects have been determined. Responses could include Reduction ( of chance and impact ) , Elimination, Avoidance, and Transfer. The hazard monitoring & A ; control phase involves a general overview of the whole procedure. It involves maintaining of information gotten from the procedure in a hazard registry and changeless re-evaluation of the procedure from clip to clip as more hazards rise as the undertaking progresses.

RISK FACTOR IN THE HOUSING SECTOR OF CONSTRUCTION IN NIGERIA

Over the last decennary, building sector in Nigeria has received a roar with a high rate of undertakings ( particularly in the edifice industry ) compared to old decennaries, and analysis has shown that the tendency will turn enormously in the following few old ages ( hypertext transfer protocol: //allafrica.com/stories/200911130010.html ) . The Housing sector is non left out in this enormous growing. However, the sector has faced a batch of losingss due to several factors which inherently is due to hazards in building by and large. Hazards in the Housing building sector in Nigeria as researched by Oladokun et Al ( 2010 ) include ; procurement path, hapless relationship between parties, quality of work, unequal planning, material quality, safety, deficit of skills/techniques, hold in supply of drawings, hapless coordination, hapless definition of range, lacks in specifications and drawings, act of God, delayed payment on contract etc. He farther identified that most of the hazards connected to the lodging sector were more of internal factors that could hold been avoided by the client, advisers or contractors. Odeyinka, Oladapo and Akindele ( 2009 ) ascertained through their research that most design determinations are left till building phase, a factor which constantly leads to a high degree of fluctuation and completion holds. Indecisive nature of clients besides affects the sector as they tend to alter range of design from clip to clip during the class of building. A study carried out by Oladokun et Al ( 2010 ) shows that the hazards with highest chance and attendant high impact on undertakings in lodging sector in Lagos, Nigeria are ; alterations in work, lacks in specifications & A ; drawings and faulty design. These are all hazards that can be controlled if there was a proper hazard direction procedure. Bing a developing state, the construct of established hazard direction pattern is non in consequence in Nigeria, as such the issues in the industry. Subconsciously though, some kind of hazard direction is being carried out in the sector because every signifier of undertaking planning and direction is in some manner hazard direction as these procedures aim for undertaking success which is the purpose of hazard direction on the long tally. The consequence of absence of effectual hazard direction in the lodging sector in Nigeria has resulted in undertakings infesting initial costs and clip scheduled, but most particularly hapless quality of constructions in some instances. This has led to prostration of several edifices over the last few old ages. Introduction of Effective hazard direction in the lodging building industry in Nigeria will further the relationship between the internal stakeholders involved in several undertakings and cut down identified hazards as most of them are client related that can be controlled. This will assist order a befitting response to each one and cut down hazards and its consequence in the sector.

As we have seen, hazards are built-in in the building industry regardless the magnitude of the undertaking. It should be ensured that these hazards are identified really early in the undertaking with an effort to specify their chance and impact on the undertaking. Adequate responses that best suit each identified high impact hazards should be applied and monitored throughout the undertaking lifecycle. The undertaking director should continually travel through this procedure to place developing hazards as the undertaking progresses. We besides saw that the construct of hazard direction is non yet good grounded in the Housing building sector in Nigeria, therefore the legion identified hazards and attributed the high impact hazards to alterations in work, lacks in specifications & A ; drawings and faulty design which are largely caused by the internal stakeholders. The effects are overrun in cost & A ; clip and low quality building. Successful debut and execution of the undertaking hazard direction will travel a long manner in bettering the lodging sector in Nigeria and cut downing the after consequence of losingss in different capacities.