Risk Management for Sustainable Project Delivery in Nigeria’s Construction Industry
CHAPTER ONE
Research Objectives
The aim of this research was to evaluate the challenging issues of sustainable risk management for successful project delivery in Nigeria. In this regard, the following represent the specific objectives of the study:
- Identify risk factors that hinders sustainability and successful project delivery in Nigeria;
- Evaluate the awareness of risk management amongst construction stakeholders in Nigeria;
- Investigate impact of capitalization on sustainable risk management and;
- Formulate a decision roadmap for sustainable project delivery in Nigeria.
CHAPTER TWO
REVIEW OF RELATED LITERATURE
Risk Management
Nothing is certain in this world, whenever we try to achieve an objective; there is always the possibility of deviation from the plan. Every step in achieving our objective has uncertainty; every step has an element of risk which needs to be addressed. Therefore, risk means uncertainty with recognized probability distribution (Barkley, 2004). It is the probability of a future problem expected to arise, but does not give any assurance of existence of the problem (Holmes, 2002). It was also defined as the consequence of uncertainty on aims or objectives, either negative or positive (Augie and kreiner, 2000). It is very important to know the distinction between risk and uncertainty (Carpenter and Frederickson, 2001). Uncertainty is a state of being that involves a deficiency of information and leads to inadequate knowledge or understanding (Carpenter and Frederickson, 2001). But Perry and Hayes (1985), believed that while the distinction between risk and uncertainty is recognized, it is unhelpful to construction projects. Risk can be from financial market doubts or uncertainties, failures in projects, legal liabilities, loan risks, accidents, force majeure, events of uncertainties or unpredictable root-cause (Akintoye and Macloed, 1997). Risk means the possibility of a problem in the future while management is the act of gathering people together in order to achieve set goals or objectives by the use of on hand resources efficiently. According to business dictionary, risk management is the identification, analysis, assessment, managing and avoidance, elimination or reduction of unacceptable risks. It is a process of taking actions or measures against uncertainties. 11 In risk management, we undergo a priority format in which the risk with higher loss and higher possibility of occurrence are managed first while the one with lower loss and less possibility of occurring is handled next in descending order. Evaluating total risks is difficult and balancing resources used in order to moderate between risk with more possibility of occurring and lower loss versus risk with greater loss and lower possibility of occurring can be misunderstood. In a risk management process, identification of risk is the first step in order to characterize the threat of the risk. The next step is to evaluate the weakness of significant assets to certain threats and also determine the risk, which means determining the expected possibility of risk occurrence of certain assets. Methods or ways of reducing those risks are identified and prioritize measures are taken for risk reduction. When risks are not properly prioritized and assessed, it amounts to waste of time trying to tackle risks that will not occur. Risk management depends on organization or planning, early identification and risks evaluation, continuous tracking of risk and re-evaluation, actualization of remedy actions, communication and coordination (Kremljak, 2004). There are many ways to structure risk management, but according to Kremljak (2010) it is structured into four parts: Planning, evaluation or assessment, handling or control and monitoring. Risk management involves both positive and negative risk aspect (Augier and Kreiner, 2000). A successful risk management process should be able to identify advantageous alternative courses of action, improve chances of success and increase confidence in achieving project objectives (Perry and Hayes, 1985)
Risk Management Planning
Risk planning is a nonstop process of creating an organized detailed risk management approach. It includes procedures, practices, strategy development, setting of goals and objectives, planning assessment, control activities, resource identification, task and responsibilities etc. Planning describes how we intend to manage the risks and also describes the components management, the approach and resources to be used in managing the risk. The plan can be applied to products, processes and projects or to entire organization.
Risk Identification
Risks are events that cause problems when triggered and affect the achievement of objectives negatively (Moavenzadeh and Rossow, 1976). The first step after planning your risk management process is the identification of potential threats. This involves discovering, recognizing and outlining the risk that has effect on the achievement of organizational objectives. The source of the risk should be taken into account in addition to events or conditions that could affect organizational objectives. When the source of risk is identified or known, its easier to investigate the consequences of that source or the problems it caused e.g. withdrawal of stakeholders from a project.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
In this chapter, we described the research procedure for this study. A research methodology is a research process adopted or employed to systematically and scientifically present the results of a study to the research audience viz. a vis, the study beneficiaries.
RESEARCH DESIGN
Research designs are perceived to be an overall strategy adopted by the researcher whereby different components of the study are integrated in a logical manner to effectively address a research problem. In this study, the researcher employed the survey research design. This is due to the nature of the study whereby the opinion and views of people are sampled. According to Singleton & Straits, (2009), Survey research can use quantitative research strategies (e.g., using questionnaires with numerically rated items), qualitative research strategies (e.g., using open-ended questions), or both strategies (i.e., mixed methods). As it is often used to describe and explore human behaviour, surveys are therefore frequently used in social and psychological research.
POPULATION OF THE STUDY
According to Udoyen (2019), a study population is a group of elements or individuals as the case may be, who share similar characteristics. These similar features can include location, gender, age, sex or specific interest. The emphasis on study population is that it constitutes of individuals or elements that are homogeneous in description.
This study was carried to examine risk management for sustainable project delivery in Nigeria construction industry. Federal Road Maintenance Agency (FERMA) and Niger Delta Development Commission (NDDC) form the population of the study.
CHAPTER FOUR
DATA PRESENTATION AND ANALYSIS
INTRODUCTION
This chapter presents the analysis of data derived through the questionnaire and key informant interview administered on the respondents in the study area. The analysis and interpretation were derived from the findings of the study. The data analysis depicts the simple frequency and percentage of the respondents as well as interpretation of the information gathered. A total of eighty (80) questionnaires were administered to respondents of which only seventy-seven (77) were returned and validated. This was due to irregular, incomplete and inappropriate responses to some questionnaire. For this study a total of 77 was validated for the analysis.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATION
Introduction
It is important to ascertain that the objective of this study was to ascertain risk management for sustainable project delivery in Nigeria construction industry. In the preceding chapter, the relevant data collected for this study were presented, critically analyzed and appropriate interpretation given. In this chapter, certain recommendations made which in the opinion of the researcher will be of benefits in addressing the challenges of risk management for sustainable project delivery in Nigeria construction industry
Summary
This study was on risk management for sustainable project delivery in Nigeria construction industry. Three objectives were raised which included: Identify risk factors that hinders sustainability and successful project delivery in Nigeria, evaluate the awareness of risk management amongst construction stakeholders in Nigeria, Investigate impact of capitalization on sustainable risk management and Formulate a decision roadmap for sustainable project delivery in Nigeria. A total of 77 responses were received and validated from the enrolled participants where all respondents were drawn from Federal Road Maintenance Agency (FERMA) and Niger Delta Development Commission (NDDC). Hypothesis was tested using Chi-Square statistical tool (SPSS).
Conclusion
The study has been able to establish factors affecting implementation of risk management practice in Nigeria. From the analysis of the investigation carried out, lack accepted industry model for analysis is rated as the most influencing factor in the implement of risk management practice in Nigeria, followed by human/ organizational resistance. There is no significant difference at level of significance between the responses of the clients, consultants and contractors on risk identification tools usage and risks response tools usage. The result further showed that risk management practice is low in Nigeria, all the respondents agreed that the use of rule of thumbs in managing construction risks associated with highways is prevalent as against modern techniques that are widely in use in developed countries. The facts stated in the literature review correspond with the results of the test which shows uniformity.
Recommendation
Considering the results of the study, it is appropriate to recommend that government should enact appropriate legislation to make risk management practice a must, and that adequate training be giving to all stakeholders in highway construction sector to improve management of risks so that projects are delivered on time, within approved budgets, to the right quality, imbibing the health and safety culture, and in an environmentally acceptable manner
References
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- Bakers, W. and Reid, H. (2005). Identifying and Managing Risk, Pearson Education, French Forest, UK.
- Berkeley, D., Humphreys, P.C. and Thomas, R. D. (1991) Project Risk Action Management, Construction Management and Economics, 9(1), 3-17
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