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1 – 10 of over 135000Abroon Qazi and Mecit Can Emre Simsekler
This paper aims to develop a process for prioritizing project risks that integrates the decision-maker's risk attitude, uncertainty about risks both in terms of the associated…
Abstract
Purpose
This paper aims to develop a process for prioritizing project risks that integrates the decision-maker's risk attitude, uncertainty about risks both in terms of the associated probability and impact ratings, and correlations across risk assessments.
Design/methodology/approach
This paper adopts a Monte Carlo Simulation-based approach to capture the uncertainty associated with project risks. Risks are prioritized based on their relative expected utility values. The proposed process is operationalized through a real application in the construction industry.
Findings
The proposed process helped in identifying low-probability, high-impact risks that were overlooked in the conventional risk matrix-based prioritization scheme. While considering the expected risk exposure of individual risks, none of the risks were located in the high-risk exposure zone; however, the proposed Monte Carlo Simulation-based approach revealed risks with a high probability of occurrence in the high-risk exposure zone. Using the expected utility-based approach alone in prioritizing risks may lead to ignoring few critical risks, which can only be captured through a rigorous simulation-based approach.
Originality/value
Monte Carlo Simulation has been used to aggregate the risk matrix-based data and disaggregate and map the resulting risk profiles with underlying distributions. The proposed process supported risk prioritization based on the decision-maker's risk attitude and identified low-probability, high-impact risks and high-probability, high-impact risks.
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Simon Adamtey and Lameck Onsarigo
Civil utility projects, both open-trench and trenchless, are subject to risk. These risks have both direct and indirect effect on project cost, schedule, quality and safety. It is…
Abstract
Purpose
Civil utility projects, both open-trench and trenchless, are subject to risk. These risks have both direct and indirect effect on project cost, schedule, quality and safety. It is therefore critical for the project management team to include risk management as an integral part of their project planning and execution. The purpose of this study is to identify the pipe-bursting construction risks and determine their probability of occurrence and cost impact and provide the appropriate responses to mitigate the identified risks.
Design/methodology/approach
This is an exploratory design using an industry-wide questionnaire survey to collect data on the probability of occurrence and impact of risks on cost of pipe-bursting projects. A probability-impact model was used to categorize the risks to determine their criticality and the appropriate risk responses.
Findings
The model revealed that majority of the analyzed risks have low impact-low probability of occurrence and high impact-low probability of occurrence. Undocumented repairs to host pipe was the only risk identified as having high probability of occurrence and high impact on cost. The risk responses suggest a combination of risk transfer, reduction and acceptance to be appropriately applied to mitigate the risks. A discussion on the good practices indicates that most pipe-bursting operations can be done safely and successfully if site and project conditions are known before bursting and the appropriate measures are taken to address those conditions.
Research limitations/implications
Although the identified risks may apply to other utility construction methods, the focus of this research is limited to risks that occur during the construction phase of a pipe-bursting construction project.
Practical implications
Risk management is very critical to the success of any construction project. Identification and assessment of risks alone will not serve the purpose of risk management unless meaningful ways to mitigate those risks in a structured way are planned. The probability-impact model for the pipe-bursting construction risks with the mitigation strategies will help owners, engineers and contractors plan for and adequately respond to these risks. Additionally, a logical assessment of the risks will aid in effective decision-making regarding the management of the project.
Originality/value
Extensive literature review indicates that there is no existing literature on the probability of occurrence and impact on cost of risks in pipe-bursting projects. This paper presents the results of a wide-ranging analysis on construction risks in pipe-bursting projects. This is the first analysis incorporating the use of the probability-impact model to determine the criticality of various pipe-bursting construction risks.
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Kaicheng Shen, Xiaodong Li, Xinying Cao and Zhang Zhihui
The purpose of this paper is to assess the process of prefabricated construction (PC) and analyze the impacts of rework risk to identify the core tasks for which the rework risk…
Abstract
Purpose
The purpose of this paper is to assess the process of prefabricated construction (PC) and analyze the impacts of rework risk to identify the core tasks for which the rework risk has severe impacts.
Design/methodology/approach
The methods consist of a literature review, expert interviews, a questionnaire survey and a rework risk function. The expert interviews and questionnaire survey were administered to experts in the entire process of PC from the dimensions of rework frequency, rework cost and rework time. Descriptive and inferential statistics were employed to analyze the data. The rework risk function was based on the loss expectancy method.
Findings
There are 13 core tasks that have higher impacts than the average level. The core tasks in the design stage account for 100% of the tasks in the stage, those in the manufacturing stage account for 20% and those in the construction stage account for 23.1%. Compared with the other stages, the design stage is characterized by significantly more frequent rework, higher rework costs and longer rework time. The manufacturing stage is characterized by significantly higher rework costs than the construction stage. The manufacturing stage and construction stage are co-reliant, and both are impacted by the design stage.
Practical implications
The findings provide stakeholders with a clear understanding of the core tasks of the PC process and represent a method for identifying core tasks. Stakeholders can learn from this to focus on the core tasks to reduce rework risk and manage the process with the priority of PC rework management based on the following order: design > manufacturing > construction. The approach is suitable for core task identification in other areas.
Originality/value
This research provides insight into rework risk management and provides a novel analysis method for rework risk and PC management from the perspective of the construction process. The findings are valuable for supporting stakeholders in making effective construction plans to reduce the impacts of rework risk in PC and provide a reference for future research on process optimization.
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Anthony J. Perrenoud, Brian C. Lines and Kenneth T. Sullivan
The purpose of this study is to describe how the University of Minnesota's capital program implemented risk management metrics on 266 construction projects and to present the…
Abstract
Purpose
The purpose of this study is to describe how the University of Minnesota's capital program implemented risk management metrics on 266 construction projects and to present the results of the risk metrics.
Design/methodology/approach
The implementation of Weekly Risk Reports (WRR) on the university construction projects captured information on the internal and external efforts related to minimizing project risks. The report implemented captured project risks, management plans, cost changes and schedule delays.
Findings
Findings reveal that the university was able to effectively capture project risk metrics through the WRR. The risk metrics identified the risks categories that impacted the 266 project costs and schedules. Through these findings, the university has a better understanding of how their internal stakeholders create the greatest risk to impacting the project cost and schedule. This paper presents the risk impacts collected from the 266 projects.
Research limitations/implications
A complete analysis of the risk metrics was limited in this research due to the extensive measurements collected. Future analysis will provide additional findings from the risk information.
Originality/value
The paper presents both the implementation and the risk management measurements used within a capital program of a major university to provide understanding of the common risks that are involved with capital projects.
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Sushma Priyadarsini Yalla, Som Sekhar Bhattacharyya and Karuna Jain
Post 1991, given the advent of liberalization and economic reforms, the Indian telecom sector witnessed a remarkable growth in terms of subscriber base and reduced competitive…
Abstract
Purpose
Post 1991, given the advent of liberalization and economic reforms, the Indian telecom sector witnessed a remarkable growth in terms of subscriber base and reduced competitive tariff among the service providers. The purpose of this paper is to estimate the impact of regulatory announcements on systemic risk among the Indian telecom firms.
Design/methodology/approach
This study employed a two-step methodology to measure the impact of regulatory announcements on systemic risk. In the first step, CAPM along with the Kalman filter was used to estimate the daily β (systemic risk). In the second step, event study methodology was used to assess the impact of regulatory announcements on daily β derived from the first step.
Findings
The results of this study indicate that regulatory announcements did impact systemic risk among telecom firms. The study also found that regulatory announcements either increased or decreased systemic risk, depending upon the type of regulatory announcements. Further, this study estimated the market-perceived regulatory risk premiums for individual telecom firms.
Research limitations/implications
The regulatory risk premium was either positive or negative, depending upon the different types of regulatory announcements for the telecom sector firms. Thus, this study contributes to the theory of literature by testing the buffering hypothesis in the context of Indian telecom firms.
Practical implications
The study findings will be useful for investors and policy-makers to estimate the regulatory risk premium as and when there is an anticipated regulatory announcement in the Indian telecom sector.
Originality/value
This is one of the first research studies in exploring regulatory risk among the Indian telecom firms. The research findings indicate that regulatory risk does exist in the telecom firms of India.
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Hoda Davarzani, Reza Zanjirani Farahani and Hazhir Rahmandad
The purpose of this paper is to introduce econo-political risks (EPRs) to supply chains (SCs). Based on case data from an automotive SC, this research identifies the mechanisms…
Abstract
Purpose
The purpose of this paper is to introduce econo-political risks (EPRs) to supply chains (SCs). Based on case data from an automotive SC, this research identifies the mechanisms through which a subset of EPRs influences SC operations and outcomes.
Design/methodology/approach
An exploratory case study method is employed for theory development. Interviews with SC professionals of three case companies were the primary data source. Company documents, archival records, and direct observation provided further insights into how EPRs are perceived, how they impact a SC, how SC actors react to them, and what the overall performance results are.
Findings
The research identifies EPRs in terms of scope (flow of material, money, and knowledge) and time, and provides concrete examples, along with the channels through which their impact unfolds, and the responses available to SC actors. The authors find secondary impacts of EPRs through economic and regulatory channels to be significant, and bankruptcy, strategic reorientation, and single sourcing are common outcomes. By elaborating on the mechanisms through which sanctions impact upon SCs, and the feasible response trajectories, this research can assist SC actors with more effective management of EPRs.
Originality/value
This paper is novel for three reasons: first, it introduces EPRs to research into supply chain risk management (SCRM); second, it addresses SC risks in a developing country, a topic largely missing from the literature; and finally, this research focuses on post-event SC risks, whereas the bulk of SCRM literature focuses on the pre-event phase.
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Nicholas Chileshe and Adwoa Boadua Yirenkyi‐Fianko
The purpose of this paper is to identify and assess the likelihood of occurrence and degree of impact of the risk factors on construction projects within the Ghanaian construction…
Abstract
Purpose
The purpose of this paper is to identify and assess the likelihood of occurrence and degree of impact of the risk factors on construction projects within the Ghanaian construction industry.
Design/methodology/approach
A survey of randomly selected samples yielded responses from 34 contractors, 46 consultants, and 23 clients or owners (private and public) within the Ghanaian construction industry. Literature review is used to identify 25 relevant risk variables which were grouped into ten composite factors and then incorporated into the design of the survey instrument. Survey response data were subjected to descriptive statistics and analysis of variance (ANOVA), and subsequently the exposure rating levels were determined, which enabled the categorisation of the probability‐impact scores in low, medium and high levels.
Findings
Results of this study indicate a disparity of the ranking of the degree of occurrence and impact among the groups. There was a statistical difference at the p<0.05 level significant for five out of 25 risk factors occurrences as follows: “construction methods”, “inflation”, “weather condition”, “ground conditions and contaminant conditions” and “poor communication amongst project team” and only one for the degree of impact scores for “price fluctuation”. Based on the composite risk factors, the financial and economic factors were found to be the most likely to occur and have the most impact on projects, whereas legal risk factor was found to be a low weighted risk, as it had the least likelihood to occur and the least impact score. The post hoc comparisons using the Tukey HSD test also indicated differences between the contractor and clients in the ranking of construction methods risk variable, but no significant differences between contractors/consultants and clients/consultants.
Research limitations/implications
Geographically, only respondents from construction organisations in the Greater Accra Region were considered, which limits generalization of the findings. The research did not also distinguish foreign from local contractors in the classification, as literature has shown that the perception of the degree of impact and likelihood of occurrence of risk analysis could also vary according to the degree of ownership.
Originality/value
The paper makes a contribution by exploring the degree of risk occurrence and its impact on construction projects within a developing economy and much lesser studied context. The paper provides insights on the perception of risk among construction professions in Ghana and it also provides some insights on the current levels of risk for foreign contractors wishing to operate in Ghana.
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Robert Neil Killins, David W. Johnk and Peter V. Egly
The purpose of this paper is to explore the impact of financial regulation policy uncertainty (FRPU) on bank profit and risk.
Abstract
Purpose
The purpose of this paper is to explore the impact of financial regulation policy uncertainty (FRPU) on bank profit and risk.
Design/methodology/approach
This study applies dynamic panel techniques and uses the Baker et al. (2016) FRPU index and macroeconomic variables to assess FRPU’s impact on bank profit and risk using Federal Deposit Insurance Corporation call reports from Q1 2000 to Q4 2016 for over 4,760 commercial banks.
Findings
The effect of FRPU on profitability (Return on Assets [ROA] and Return on Equity [ROE]) and risk (standard deviation of ROA and ROE) produces complex results. FRPU negatively (positively) impacts profits for small and large banks (money center banks). There is a positive impact on FRPU for small and medium-sized banks, with no impact reported for the large and money center banks.
Practical implications
Findings lead to several implications for financial services regulators, investors and executives as summarized in the conclusion. It is essential to ensure that clear communication channels are open especially to small and medium-sized banks for proper strategic planning, given their greater sensitivity to regulatory uncertainty.
Originality/value
This paper contributes to the literature as follows. First, it explores the impact of FRPU on bank profits and risk using a novel index introduced by Baker et al. (2016). This news-based continuous measure presents a bank profit modeling approach that differs from traditional event study methodology. Second, a large sample of US commercial banks is used which represents an important departure from banking regulation studies.
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Henry A. Odeyinka, John Lowe and Ammar Kaka
The purpose of this paper is to identify and assess the extent of occurrence and impact of risk factors responsible for the variation between the forecast and actual construction…
Abstract
Purpose
The purpose of this paper is to identify and assess the extent of occurrence and impact of risk factors responsible for the variation between the forecast and actual construction cash flow.
Design/methodology/approach
The study was conducted through a structured questionnaire administered to UK contracting organizations. Adopting a project‐by‐project approach, respondents were asked to provide opinions on the extent of occurrence of some identified risk factors and their impacts on cash flow forecast. Respondents were split into three groups of small, medium and large contracting firms based on their annual turnover so as to be able to investigate statistical differences of opinions between the groups. Statistical analyses were carried out using mean response analysis and univariate analysis of variance (ANOVA) in order to determine significant risk factors and also to investigate differences of opinions between respondents' groupings.
Findings
The research identified 11 significant risk factors out of 26 research risk variables. These significant risk variables can be grouped under three generic factors of “changes in the design or specification”, “project complexity” and “natural inhibition”. The significant risk variables are those ranking high in “extent of occurrence” and with critical impacts on cash flow forecast. The research further showed that there is no statistically significant difference in the opinions of different categories of contractors regarding the extent of risk occurrence and impacts on cash flow forecast.
Research limitations/implications
The research showed that the order of extent of risk occurrence is different from the order of impact in case of occurrence. This suggests that further work needs to be done to measure the impact more objectively on a ratio scale so as to provide an avenue for a more quantitative measure of risk impacts on cash flow forecast. This objective is the next focus of this study.
Practical implications
Based on the finding, it is evident that the knowledge of the identified significant risk factors provides invaluable information to the construction contractor as regards what risk variables to focus attention on in cash flow forecasting.
Originality/value
The paper makes an original contribution of exploring the extent of risk occurrence and its impact on construction cash flow forecast from an objective point of view rather that the usual subjective point of view. The epistemic nature of the investigation makes the finding of practical value to the construction contractor in cash flow forecasting.
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Olufisayo Adewumi Adedokun, Temitope Egbelakin, Deborah Oluwafunke Adedokun and Johnson Adafin
Despite the huge capital outlay in tertiary education building projects (TEBP), these projects undoubtedly failed in meeting the set objectives of cost, time and quality, among…
Abstract
Purpose
Despite the huge capital outlay in tertiary education building projects (TEBP), these projects undoubtedly failed in meeting the set objectives of cost, time and quality, among others. Therefore, rather than the impacts of risks on the overall project performance, which is common in the construction management literature, the purpose of this study is to assess the impacts of risk factors on the criteria for measuring the success of public TEBP.
Design/methodology/approach
The paper adopted a quantitative research method where the data collection was via a questionnaire survey. The researcher administered 452 questionnaires to the client representatives, consultants and contractors involved in building projects across five public tertiary education institutions in Ondo State, Nigeria. Of 452 questionnaires, 279 were retrieved and suitable for the analysis, translating to a 61.73% response rate. The reliability analysis of the research instrument showed 0.965 and 0.807, via Cronbach’s alpha test, indicating high reliability of the instrument used for data collection.
Findings
The study found different risk factors affecting the criteria for measuring the success of TEBP. For instance, the environmental risk factor significantly impacted completion to cost, while financial and political risk factors significantly impacted completion to time. In addition, while environmental, legal and management risks significantly impacted end-user satisfaction, safety performance was significantly impacted by logistic, legal, design, construction, political and management risks. Besides, the logistic, legal, design, construction, financial, political and management risk factors impacted profit. However, despite profit being one of the criteria for measuring the success of building projects, it recorded the highest risk impacts amounting to 41% variance.
Research limitations/implications
The findings are limited to the public tertiary education building projects procured via competitive tendering; therefore, the results might differ when considering other procurement methods.
Practical implications
The practical implication is that rather than focusing on all risk factors, the project stakeholders could give adequate attention to the significant risk factors impacting each of the parameters for measuring the success of education building projects.
Originality/value
The study revealed specific risk factors impacting the criteria for measuring the success of TEBP, which extend beyond the use of the overall project performance approach.
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