Construction Risk Management Decision Making

Understanding Current Practices

Alex C. Arthur

• Publisher: Wiley-Blackwell
• Year: 2021
• Print ISBN: 9781119693000
• eBook ISBN: 9781119693024
• Edition: 1
• Topic: Technology & Engineering
• Subtopic: Construction & Architectural Engineering
• Index: Technology & Engineering

CONSTRUCTION RISK MANAGEMENT DECISION MAKING

Explores the relevance of systems thinking and behavioral science in construction risk management

Effective risk management is a vital component of all successful construction projects. Although quantitative tools for evaluating data and minimizing risk are readily available, construction managers commonly adopt a more innate, experience-based approach. In Construction Risk Management Decision Making, project manager and senior consultant Alex C. Arthur provides step-by-step advice on assessing and prioritizing risk using qualitative decision-making systems in the construction industry.

Incorporating key theories and concepts from systems thinking and behavioral science, this highly practical guide focuses on the behavior patterns of real people in the industry, rather than complex quantitative techniques and data. Concise, easy-to-understand chapters highlight the current practices of construction risk management while helping readers view risk and decision making from a broader perspective. Throughout the book, the author presents invaluable insights into the ways construction professionals think and behave in the real world.

• Addresses the actual risk management practices of construction professionals
• Applies human behavioral theories to the study of construction risk management decision making
• Illustrates the highly intuitive approaches prevalent in various construction projects
• Features real-life case studies and practical examples throughout

Construction Risk Management Decision Making is an excellent textbook for advanced students in project management, engineering, construction, and surveying courses, and a must-have guide for practitioners of construction management, surveying, and architecture.

1
Introduction – A Risk Management Approach to Construction Project Delivery

Hazard and uncertainty have always been a part of human condition (Lock 2003; Beck 2007). The early humans at pre-civilization faced the daily challenge of protecting themselves against attacks from wild animals and hostile tribes. The modern society may have developed remedies against those threats, but there are equally other factors that threaten our persistence, like the ongoing Covid-19 pandemic. The emergence of vaccines has provided glimmers of hope that we may be heading towards the end of the pandemic. The fact however remains that there will always be other natural and social menace that challenges human survival.

Social hazards and uncertainties were conventionally defined and managed by the religious and political leaders occupying the top of the vertical social structure. This was done through the reliance on guided morality, superstition, taboos, and rituals (Japp and Kusche 2008). The contemporary transition of multiple differentiated functional subsystems replacing the stratified vertical system has expanded social risk communication into the public realm (Japp and Kusche 2008). According to Loosemore et al. (2006), the increased public awareness on the risk variables associated with both personal and corporate activities and increased media reportage on the impact of risk events have accounted for the heighten discussions on risk and influenced public attitude to risk management. A failed suicide bomb attack in which the perpetuators planned to detonate liquid explosives on several aircrafts traveling from Heathrow Airport to the United States of America in 2006 led to public discussions on the risk posed by liquids on aircrafts, resulting in a European Union imposition of restrictions on carrying liquids on aircrafts, which subsequently has become a world-wide ban. The use of Blackberry Instant Messenger system to elude police intelligence by the perpetuators of the August 2011 British riots triggered public discussions on the security risk associated with smart phones (The Economic Times 2011).

In the context of construction delivery, the catastrophic demise of a 6-year-old girl at Carnival Place, Moss Side, Manchester, United Kingdom on 28 June 2010, and a 5-year-old girl at Brook Court, Bridgend, South Wales, United Kingdom on 3 July 2010, after they became trapped in electric gates, coupled with two other near misses in July and September 2010, ignited public debates on the safety of electric door entry systems. The result was the formation of the Gate Safe charity in 2010, to promote safety guidance for the construction of automatic and manual gates (Gate Safe 2020). The 2017 Grenfell Tower fire incidence in the United Kingdom has also stimulated public discussion on the fire safety risks associated with high rise buildings (Arthur 2017). The immediate impact has been a public inquiry and enactment of changes to the statutory building regulations. The heightened public risk communications have cumulatively increased construction clients' awareness of the typical industry risk events, with the expectation of their management through the project delivery processes. The control of project risk is now seen as being synonymous with the control of the project itself (Pryke and Smyth 2006; Abderisak and Lindahl 2015), which in effect establishes a direct relationship between effective risk management systems and project success (Cagno et al. 2007).

Risk as explained by Loosemore et al. (2006) is an uncertain event that might occur in the future, to potentially affect an interest or objective (usually adversely), although the precise likelihood or impact may be indeterminate. The theoretical emphasis is the relationship between risk and uncertainty and probability judgement. It also emphases risk as a future potential occurrence with the propensity to impact on an objective or interest.

Loosemore (2006) has also described risk management as a field of competing ideologies between the homeostatic and callibrationist perspectives (Hood and Jones 1996). The homeostatic perspective proposes scientific approach to risk management through structured risk identification and rational decision-making, whilst the callibrationist viewpoint believes in human subjectivity in risk interpretation, identification, and treatment (Loosemore 2006). Another significant ideology of the callibrationist view is the subjectivity and biases of the personal perceptions responsible for guiding the risk identification and treatment processes (Tversky and Kahneman 1982a,b,c; Kahneman and Tversky 1982a,b; Slovic 2010; Kahneman 2011). Japp and Kusche (2008) theorisation of social construction of risk through the communicative and decision-making processes of multiple differentiated functional subsystems and the ensuing analytical variability in social risk interpretations give the callibrationist approach an edge over the homeostatic method in the management of risk within the contemporary era.

This book has therefore adopted theories and concepts from systems thinking and behaviour sciences in demonstrating the social construction of risk (Zinn 2008) and the subjectivity of risk perceptions (Slovic 2010; Kahneman 2011). The principles of general systems theory (Bertalanffy 1968, 2015) have enabled conceptual analysis of the risk management subsystem within the construction project delivery system. The concept of systems differentiation (Walker 2015) and the existing empirical evidence on the psychology of perception (Slovic 2010; Kahneman 2011) have been applied in analysing the pattern of risk perceptions emanating from the different specialist roles responsible for design development and risk management decision-making, including the project manager, contracts manager, technical manager, architect, engineer, quantity surveyor, and client. The emphasis on design development is due to the close relationship between design concepts and the generation of project risk events (Latham 1994; Egan 1998; Lock 2003; Flyvbjerg et al. 2003). According to Bea (1994), the bulk of the initial project design errors later results in risk events, with approximately 42% and 50% actualising during the construction and operational phases, respectively.

The ensuing analytical review has resulted in the discovery of a new theoretical interpretation for risk perception categorisation based on the differences in affective heuristics of the different specialist roles within the construction project delivery system. The theoretical evidence has been further confirmed through a four case qualitative empirical research investigation covered in the Part 2. There has been further theoretical discussion on the risk management decision-making subsystem within the construction project delivery system, to examine the impact of mixing tools and techniques from different systems of thinking and decision-making (Walker 2015; Kahneman 2011). The resulting analytical review and subsequent empirical findings have also confirmed the psychological diff...

Table of contents

• Cover
• Table of Contents
• Title Page
• Copyright
• Dedication
• Preface
• Acknowledgement
• About the Author
• 1 Introduction – A Risk Management Approach to Construction Project Delivery
• Part 1: Concepts
• Part 2: Case Studies
• Appendix A: Research Design – Theory, Methodology, and Field Questions
• Appendix B: Case 2 Data Presentation
• Appendix C: Case 3 Data Presentation
• Appendix D: Case 4 Data Presentation
• References
• Index
• End User License Agreement