Effect of Optimization of Risk Allocation in Construction Projects

Effect of Optimization of Risk Allocation in Construction Projects

Emmanuel Ebo Hayfron

The process of risk management is made of identification of risks, analysis of risks, Reponses to risks and the monitoring of risks. The identification of risk can be regarded as the process where an organization identifying potential risks that have the possibility of affecting the success of a project. The allocation of risks can significantly influence the behavior of the project participants, and further impacts on the cost of project and the performance of the project. This is the main reason why there is no agreement on an optimal risks allocation within the participants in the construction industry. In respect to this, the research seek to evaluate the effect of optimization of risk allocation in construction projects in Ghana. However, due to the current practice of allocation of risks within the construction industry, risks can be allocated statistically at the beginning of the construction projects via a contractual clauses, in spite of the fact that, most construction projects are dynamic in nature. The research design to be used for the study will include the mixed research approach. This approach involve the use of both qualitative and quantitative research method. According to Creswell (2003), the use of the mixed research approach provide researchers with wider view of data gathering and analysis. The random and purposively sampling technique was employed during the gathering of data. The random sampling technique was used to gather data from the selected construction companies, while the purposively sampling technique used to gather data from selected key personnel within the construction companies. Based on the data gathered from the respondent, the main current practice of risks in the Ghanaian construction industry is the allocation of risks to parties that lack the expertise and resources to manage them. Also, all procurement routes that are employed do not create any room for proper and effective allocation of risks. Risks are very dynamic, therefore, there is the need to create a collaborative, cooperative and teamwork project environment that will bring risks under control in all construction projects that will be executed

MSc Engineering Project Management

January 2017

Mr. Otu Larbi-Siaw