An Investigation Into Risk Management Practices Amongst Quantity Surveyors in the Nigerian Construction Industry
Chapter One
OBJECTIVES OF THE STUDY
The aim of this research is to investigate the practice of risk management amongstthe construction practitioners specifically the quantity surveyor in the Nigerian construction industry.
In order to achieve the aim of the study, specific objectives for the study are:
- To evaluate the quantity surveyor’s level of awareness and acceptance on Risk Management practice.
- To identify the current practice of risk management amongst Quantity Surveyors’.
- To examine the barriers and challenges to the implementation of risk management in construction project from the quantity surveyor’s point of view.
CHAPTER TWO
LITERATURE REVIEW
INTRODUCTION
Construction industry is one of the most risky industries which exposed with a lot of predictable and unpredictable risk that will have a greater impact on a project schedule, project cost and also to the performance and quality of the end product. The construction industry, perhaps more than most, is plague by risk (Flanagan and Norman, 1993), but often this risk is no dealt with adequately, resulting in poor performance with increase cost and time delays (Thompson and Perry, 1992 cited in Tab, & Carr, 2001)
Risk management is an important part of the decision making process in construction (Kangari, 1995), and now widely accepted as a vital tool in the management of projects (Wood & Ellis, 2003 cited in Tang et.al. 2007). In order to ensure the successfulness of the construction project, all risk and opportunities should be managed properly in the most efficient and effective manner. A systematic approach in managing risk should be implement from the moment of the project start up to the completion of the project (Flanagan and Norman, 1993). Williams et.al. (2006) suggest that, the aim of risk management process is to provide decision makers with a systematic approach to coping with risk and uncertainty.
Meanwhile, according to Godfrey, (1996), systematic risk management helps to:
- Identify, assess and rank risk, making the risk explicit;
- Focus on the major risk of project;
- Make informed decision on the provision for adversity, e.g mitigation measures;
- Minimize potential damage should the worst happen;
- Control the uncertain aspect of the construction projects;
- Clarify and formalize the company’s role and the roles of others in the risk management process;
- Identifies the opportunities to enhance project performance.
Construction projects involve various professional from various discipline. Among the professional in construction team are the architect, engineer, and also the quantity surveyor.
RISK AND RISK MANAGEMENT
DEFINITION OF RISK
For such a little word, risk is a complex concept, the meaning of which has evolved over time. Different people came out with a different definition but most of them have a very close similarity. The word “Risk” is used in many different ways and with many different words, such as “hazard” or “uncertainty”. Flanagan and Norman, (1993), define risk as the unknown thing that will have impact on cost when it occurred. Meanwhile,Chapman, (1991), defined risk as the exposure to economic probability, financial profit and loss, physical damage or delay in timeframe because of the uncertainty event that occurred.
According to Hayes et al. (1986) risk and uncertainty are part of all construction work regardless of the size of the project. Other risk factors that can carry risk include: complexity, speed of construction, location of the project, and familiarity with the work.
When serious risks occur on projects the effects can be very damaging. In extreme cases, time and cost overruns tum a potentially profitable project into a lost-making venture.
CHAPTER THREE
RESEARCH METHODOLOGY
INTRODUCTION
This chapter explains the various methods employed in developing the research instrument, collecting data for the study and procedures followed by the researcher to delineate information and fact finding. Such procedures are further structured under the following sub-headings:
- Research design
- Population of Study
- Sample and Sampling technique
- Instrumentation
- Validity and Reliability of Research Instrument
- Administration of Instrument
- Method of Data Analysis
RESEARCH DESIGN
The survey research design is adopted in this study using a descriptive survey in which various risk management practices among quantity surveyors will be examined.
POPULATION OF THE STUDY
The population of study covers quantity surveyors duely registered in Owerri Municipal, Imo state.
SAMPLE AND SAMPLING TECHNIQUE
In carrying out this research, simple random sampling was carried out. The researcher made use of fifty (50) randomly selected quantity surveyors in Owerri, Imo state.
The Surveyors selected for this study were selected from the list of registered firms by a simple toss of the coin. The name of all the quantity surveying firms were written on slips of paper and carefully mixed in a bowl. The firms were randomly picked, after which a coin was tossed, and a firm was picked if a desirable result was achieved, after which the bowl was carefully mixed again.
CHAPTER FOUR
DATA ANALYSIS AND INTERPRETATION OF RESULTS
Introduction
This chapter deals with the presentation and the analysis of primary data obtained by the researcher through the administration of structured questionnaire. The data are presented using tables, frequency distribution and simple percentage to enhance quick understanding of the result achieved.
The questionnaires were segmented into two sections; sections A and B. the section A was concerned with the biographic data of the respondents. The section B were centered on the questions raised in the questionnaire to elicit the respondents’ responses. It therefore follows that the presentation based on the responses of the respondents will be done in two sections in this chapter. Thus, section A will involve the presentation and analysis of the biographic data of the respondents, while section B is on the presentation and analysis of the respondents’ responses. From the Fifty (50) questionnaires distributed to the respondents, 50 copies were retrieved. This represents 100% response rate. The responses are presented in the table below:
CHAPTER FIVE
SUMMARY, CONCLUSIONS AND RECOMMENDATIONS
Summary
This research project is designed to investigate the practice of risk management amongst the construction practitioners specifically the quantity surveyor in the Nigerian construction industry.
It has also helped to identify how risk management being implemented in the Nigerian construction industry and also the potential barrier and challengers in the implementation of risk management specifically from the quantity surveyor’s point of view. These challenges have become symptomatic in the numbers of failed projects. The fieldwork of this project was carried out using fifty (50) randomly selected quantity surveyors in Owerri, Imo state.
The research questions used touched on the following:
- Evaluation of the quantity surveyor’s level of awareness and acceptance on Risk Management practice.
- Identification of the current practice of risk management amongst Quantity Surveyors’.
- Examination of the barriers and challenges to the implementation of risk management in construction project from the quantity surveyor’s point of view.
The main instrument used for the study was the questionnaire. The instrument used to collect the data touched on the three research questions and one hypothesis. Beside the fifteen questions on the questionnaire, there were others which asked about sex, qualification, age, work experience of surveyors.
Recommendations
It is envisaged that the following recommendations will aid Nigerian quantity surveyors in appreciating the importance of adopting proper risk management techniques in their daily jobs. Based on the outcome of this research, the following suggestions are put forward:
- There should be in increase in the level of awareness and implementation of adequate risk management technique amoungst quantity surveyors in Nigeria.
- Quantity surveyor in Nigeria should always ensure adequate risk assessment and management in all project constructing being embarked upon.
- Project managers should ensure that the 10% of the total project capital is allocated separately and solely for the purpose of risk control.
- Government should enact laws and policies that will ensure compliance with proper risk assessment and management among the practitioners (Quantity surveyors and other professionals in the construction industry) to reduce the cases of failed project construction.
Conclusion
The level of awareness and implementation of risk management in construction project in Nigeria are so varied that research of this nature, which covered such a small area could not be claimed to be exhaustive.
Efforts were made, however, to direct attention to some of the factors that aggravated these challenges in the implementation of risk management in project construction. These factors had been looked at from different view points. Prominent among these include; complexity of the project and lack of finance which can give room to unforeseen circumstances.
From the data collected and analyzed, it became evident that most of the respondents agree that awareness and implementation of risk assessment and management practice in project construction has aided quantity surveyors in attaining construction project objectives.
REFERENCES
- Bennett, F.L., 2003. The Management of Construction: A Project Lifecycle Approach. Oxford: Butterworth Heinemenn
- Bing, L., Akintoye, A., Edwards, P.J. and Hardcastle, C., 2005. The allocation of risks in PPP/PFI construction projects in UK. International Journal of Project Management. Vol. 23. pp. 25-35
- Chapman, C.B. and Ward, S.C., 2003. Project risk management: Process, techniques and insights. 2nd Edition. Chichester: John Wiley and Sons
- Chege, L. and Rwelamil, P., 1999. Risk management and procurement systems – an imperative approach. Available at: http://www.buildnet.co.za/akani/2002/jul/paper2.pdf. [Accessed 31st March 2011]
- Cleden, D., 2009. Managing project uncertainty. Abingdon: Ashgate Publishing Group.
- Cleland, D. I., and Gareis, R., 2006. Global Project Management Handbook: Planning, Organizing, and Controlling International Projects, 2nd Edition. New York: McGraw-Hill
- Cooper, D., Grey, S., Raymond, G., and Walker, P., 2005. Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements. Chichester: John Wiley & Sons, Ltd
