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MACE 60050 Project Management Research Methods Assignment

02.05.2012

PART I: THE PROPOSAL FOR DISSERTATION

1.0 Working title: Risk Identification Techniques and Suitability of Different Techniques in Construction Industry 1.1 Aim To provide a guideline to project managers in identifying risks by explaining the alternative methods and finding out, are some more suitable for different types of project or for use at different stages in the project life-cycle. Also, the study aims to emphasize to find most suitable risk identification techniques in construction industry. 1.2 Objectives

To relate the effects of perception of risk and uncertainty with risk management and identification process. To provide a brief literature review about risk management process. To provide a broad literature review about risk identification step and risk identification techniques. To discuss how risk identification techniques can differ according to sector. To discuss how risk identification techniques can differ according to different stages in project life-cycle. To discuss the suitability of risk identification techniques in construction industry.
1.3 Synopsis In todays modern competitive environment, projects are some effective tools which institute to produce economic value and competitive advantage for companies. So, the project managers could be seen as new strategic directors of the companies and project success criteria should align with strategic direction of the company. In traditional project management approach, project success is emphasized on optimisation of time, cost and quality. However, the importance of the strategic needs of companies should be paid more attention in project success criteria. (Shenhar and Dvir (2001)) All projects involve different types of risk according to their nature which must be managed smoothly. (Raz and Michael (2001)) Risk management can be defined as any set of actions taken by individuals or corporations in an effort to alter the risk arising from their business. (Merna and Njiru (1998)) As it can be understood from the definition, risk management is one of the key elements to assess these risks and provide project success. So, it can be said that, smooth risk management process is crucial in project management context. Risk management process has several steps to manage the risk properly. These stages are: Risk identification, risk analysis, risk response. (Merna et al (2006)) It can be seen from the order that, identification process is the first stage of risk management process. The main aim of the identification process is to analyse and identify the risks, rather than concentrate on the possible effects of these risks. (Chapman (1997)) In addition, the identification and assessment steps have the greatest effect of the accuracy. (Chapman (1998)) Identification techniques of risk can be defined as some methods to identify risks in the project and can be regarded as an important part of risk management process. (Kasap and Kaymak (2007)) However, lack of information about risk identification techniques is a problematic situation in project management context. Some techniques such as group brainstorming, lessons learned reviews are more commonly used by risk management teams. However, despite the high number of risk identification techniques available, still limited number of techniques are used by the companies. This situation arises from limited information about the concepts, strengths, and limitations of other methods. (Chapman (1998)) 1.4 Beneficiaries As it mentioned above, smooth and precise risk management process can be regarded as crucial for project success. In this case, understanding the nature of risk, project life cycle and industry can be seen as beneficial to improve the effectiveness of risk management process. In addition, understanding concepts, strengths and limitations of these methods precisely will be beneficial to improve the efficiency of risk identification and will be helpful to achieve project success. As a result, explaining all of these concepts and discussing the relation between risk identification techniques during project life-cycle or in different sectors, will be beneficial for the project managers.

MACE 60050 Project Management Research Methods Assignment

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MACE 60050 Project Management Research Methods Assignment

02.05.2012

PART II: SEARCH STRATEGY & KEYWORDS & SELECTION CRITERIA

2.1 Search Strategy Information used in this assignment was collected from several books, research papers and peer-reviewed journals. A wide range of books which are stored in John Rylands Library and Joule Library were helpful to organize this assignment. Three of four main articles are selected, are published by International Project Management Association (IPMA). Articles have been chosen via using University of Manchester Library Web Service. It is possible to access many databases such as Science Direct, INSPEC, Wiley Interscience, etc. by using via function SearchIT@JRUL. Using University of Manchester Library Website was beneficial because of providing Advanced Search option. Using this service provides multiple search option which is very advantageous to find related articles. Also, refining results by filtering variables such as Peer-Reviewed, Topic, Creation Date, Author, Journal Title, etc. helps to find related papers with the topic. 2.2 Search Keywords In order to find relevant information about the assignment, following keywords were used through the search: Objectives To provide information about the effects of perception of risk and uncertainty to risk management and identification process To provide information about risk management process Keywords Risk, uncertainty, uncertainty management, risk management, risk definition, risk perception risk management, project management, risk assessment, risk analysis risk analysis, risk identification, risk identification techniques, delphi, nominal group technique, brainstorming construction risks, project risk, common project risks risk exists in projects

To present a list of most common techniques available for risk identification To provide information about common project risks and project risks in construction industry 2.3 Selection Criteria of Papers In the literature search, it has been decided to explain whole risk and risk management process, rather than explaining only risk identification techniques. It is seen that there are several papers which only explain risk identification step of risk management process. However, because of wide information about risk management process and the complexity of the word risk, explaining only risk identification and techniques might cause ambiguity in the assignment. As a result, in the brief literature review, selected papers deal with different aspects. Article selection criteria are explained in detailed below. As it mentioned above, risk management is a crucial process to achieve project success and in traditional project management process, project success is emphasized on optimisation of time, cost and quality. However, project success criteria should put emphasis on strategic needs of the companies. (Shenhar and Dvir (2001)) Hillson (2002) states that the perception of risk and uncertainty are wide terms which include both positive and negative effects inside its definition. However, in common process, risk perception is understood as downside. Hillson (2002) also argues that, both threats and opportunities should be managed. In this case, it can be regarded that, the perception of risk and uncertainty can have a vital significance to risk identification and risk management process. Also, making comparison between generic process of project risk analysis and management (PRAM) and the suggested extended process which is suggested by Hillson, is found beneficial to understand optimum risk management and risk identification process to also take account of opportunities in the project. Thanks to these two reasons mentioned above, following paper is selected as first main paper. Hillson, D. (2002). "Extending the risk process to manage opportunities." International Journal of Project Management 20(3): 235-240.

Chapman (1998) states that there are still lack of understanding of the merits and drawbacks of the available risk identification techniques. It can be regarded as main reasons of limited number of techniques used by the companies. The following paper is suggested to evaluate the effects of working in groups to risk identification and assessment. Also, Chapman (1998) calls attention to popularity of brainstorming technique despite its limitations when compared to the Nominal Group technique (NGT) which is one of the not frequently used techniques with Delphi. Thanks to the reasons listed above, following article has been selected. Chapman, R., (1998). The effectiveness of working group risk identification and assessment techniques. International Journal of Project Management, 16, pp.333-343 Finding articles which provide information about all available techniques of risk identification, was not possible. But, empirical knowledge could be found in several books; on the other hand, there are still few articles which are totally related with this topic. As a result, following paper is selected to provide information about all risk identification techniques available. A notable feature is this article is not peer-reviewed. However, because of the provided information about all risk identification techniques available, the following article has compulsorily selected. But, it is regarded that, several books will be used about this topic in the dissertation. Kasap, D. & Kaymak, M. (2007). Risk Identification Step of the Project Risk Management. In: Management of Engineering and Technology, Portland International Center for, 5-9 Aug. 2007. 2116-2120. As it mentioned above, according to the nature of project, different types of risks exist in the project. (Raz and Michael (2001)) Understanding the risks which exist in the project life-cycle might be beneficial to understand which technique suits better in construction industry. Because of the reason mentioned, the following article has been chosen. Zou, P. X. W., G. Zhang, et al. (2007). "Understanding the key risks in construction projects in China." International Journal of Project Management 25(6): 601-614.

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MACE 60050 Project Management Research Methods Assignment

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PART III: BRIEF LITERATURE REVIEW

In todays modern competitive environment, risk management ranked as early in the list in forward-looking companies. Customer requirements, changes in environment, market globalization, etc. are some reasons which make risk management crucial and nonnegligible step of project management context. In todays market place, survivability of the companies depends on having smooth and precise risk management process. (Merna and Al-Thani (2005)) The first step of risk management process concerns with identification of risks which is the main topic of this assignment. In this assignment the main aim is to find most appropriate risk identification techniques in construction industry. However, to reach the main aim, step by step investigation will be beneficial to understand key concepts of risk and to provide extended knowledge about risk management process. In this critical review, following four steps will be literally explained: Optimisation of risk management process with understanding the perception of risk, uncertainty and opportunities Variables effects to risk management process Overlook of all available risk identification techniques General risks exist in construction industry

3.1 Optimisation of Risk Management Process with understanding the issues of risk, uncertainty and opportunities The risk is an ambiguous term and also varied definitions of risk available in project management context. One of the main concerns in many articles is; understanding the perception of risk and uncertainty. It will be beneficial to provide a clear understanding of these issues since, understanding perception of risk and uncertainty will be helpful to risk identification phase. Hillson (2002) constitutes a study about the current risk process. The main aim of the article is to extend current process to add managing opportunities layout into project management process. One of the main issues inadequate in risk management process is not to put emphasis on adequate overlapping between strategic needs of companies and project success criteria. It can be said that, underlying causes of this concern is the ambiguous lexical meaning of the word risk. In the project management context, it would be clear to state that generally the term risk is seen as a negative event. Hillson (2002) points out this statement and recommended to use extended risk management process to increase the productivity of managing opportunities. By that method, it is aimed to solve this situation. The study is based on a literature review. Author has gained information about different articles which are related with the topic. Afterwards, the paper structured as a discussion of the information gained from these articles. When comparing with different articles, nearly similar topic is organized by Perminova et al. (2008) can be seen as evidential reasoning of this paper. In this paper, the complexity of the work risk has been explained in detailed and nearly similar problems have been identified. Also, Ward and Chapman (2003) points out the complexity of the word risk and recommended to use uncertainty management method to deal with. However, this attempt has not seen strategic by Perminova et al. (2008). However, this paper still proves Hillsons concerns about body of knowledge. The most notable limitation of the paper is the limited number of references. It is possible to find empirical information about new methods recommended to optimize risk identification phase. Making comparison with these articles might increase the validity of claims and provides depth understanding about the concept to the reader. However, author preferred to give his own ideas in the article without referring. Secondly, the requirements suggested by the author might be wider. For instance, SWOT Analysis, Constraints and assumptions analysis and Force field analysis are risk identification which is broadened by the author to support opportunities management. However, popular techniques such as brainstorming, checklist, Delphi, etc. were not explained in detailed in the paper. Similar errors also exist in different steps. However, despite of limitation of the paper, positive aspects outweighs limitations. Firstly, the scope of the paper is quite wide and despite its limited information about some steps, it still provides broad explanation about the topic. In addition, the validity of concern stated in the paper could be understood while comparing with similar papers. Finally, the paper totally attains the aims which provided in introduction. To sum up, the paper sets up a stable discussion and provides benefit to body of knowledge. In addition, understanding the key errors of risk perception can be seen helpful to risk identification techniques topic. 3.2 Variables affect to risk management process There is no doubt that, one of the most significant steps of risk identification which is a part of risk analysis and management process and has a huge impact on the accuracy of construction risk management. However, there are still lacks of understanding about these techniques. (Chapman, R., (1998))

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MACE 60050 Project Management Research Methods Assignment

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Chapman (1998) constitutes a study based on study of Handy (1983) and espouses the model of definitive designed by Handy (1983) as a framework to appraise NGT, brainstorming and Delphi. The main aim of the paper is to understand the effectiveness of the working group techniques. The techniques handled by the risk analyst or one-to-one interviews are out of the scope of this paper. Because of limited time and wide scope of paper, limitation and weak points of the paper could not be detected. There are many beneficiaries of the paper. Chapman (1998) evaluates three different methods by the given framework designed by Handy (1983) and the paper provides empirical information about determinates of group effectiveness and potential effects to the methods. Also, the reasons of limitations of NGT explained by Islam (2002) has explained and optimized. In addition, explanation of all determinates, provides clear understanding. Also, numerous references show the wide research of the paper. To sum up, a stable discussion provided by Chapman with strong conclusion supported with numerous evidences. Also, the contribution to the body of knowledge is accomplished. Because of limited time, that article could not have been searched completely. However, it can be said that, the support of the article to the dissertation will be indispensable. 3.3 Overlook of all available risk identification techniques All projects involve different types of risk according to their nature. Risk identification is one of the crucial parts to identify these risks. Many articles aim to find most suitable method to identify these risks. However, because of lack information about different techniques, precise risk identification process cannot be provided. Kasap and Kaymak (2007) constitute a study about the risk identification process and the aim of the article is to provide detailed information about risk identification step of risk management process. To address this objective, Kasap and Kaymak (2007) have completed literature review and critically analysed to gather information about the topic. One of the major issues in risk management process is the limited information and understanding of risk identification techniques. (Chapman (1998)) In order to deal with the problem, Kasap and Kaymak (2007) structure his paper as a literature review. According to the aim of paper, Kasap and Kaymak (2007) states information about different techniques such as Delphi, NGT, Surveys, Force Field Analysis, etc. Also, the paper provides brief information about risk management and risk identification process. In addition, a sample of Risk List has been provided by the paper. However, there are crucial limitations and contradictions of the paper. First of all, the definition of risk given by Kasap and Kaymak (2007) contradicts with risk definition of several papers. (Perminova et al. (2008), Chapman et al. (2003), Hillson (2002), Merna et. Al (2005)) only the negative perception of risk is explained by Kasap and Kaymak (2007). In addition, the aim of the paper is very narrow. Main aim and objectives should include wider information. Also, the conclusion part is weak on the paper. Moreover, the number of references is quite low on the paper. Finally, the papers contribution to body of knowledge is quite poor. To sum up, the paper might be seen useful for gathering brief information about different techniques. However, when comparing with books which include empirical knowledge about this topic, this paper can be seen weak. 3.4 General risks exist in construction industry and management of these risks Giving primacy to risks according to their importance of effects is a vital part of risk management process for smooth risk management process. However, identifying, prioritising and understanding the importance of influences are still difficult step of risk management context. Zou et al (2007) constitutes a study about the listing the key risks exist in construction projects in China. The articles main aim is to finding the most significant risks and to organize strategies to manage them. Author is based on his study on a questionnaire surveys which were used to collect data. 25 important risks found out and these risks were compared with Australian construction industry. When comparing with different articles, the article of El-Sayegh (2008) shows similarity about results. It can be seen from tables key risks such as low management competency of subcontractors, design variations, etc. show nearly same influences to the project. Also, comparison between Australian Construction Projects shows another can be seen as evidential reasoning of this paper. In the first overlook, finding a significant limitation of the paper does not look possible. Maybe, the number of countries can be increased.

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MACE 60050 Project Management Research Methods Assignment

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However, positive aspects of the paper totally outweigh limitation. First of all, the discussion is totally stable and supported by lots of evidences. Secondly, despite the wideness of the scope, all aims precisely provided. Also conclusion part is quite strong and provided by evidences. Finally, 43 references show the depth literature review of the paper. To sum up, the paper constitutes a stable discussion and provides benefits to body of knowledge and also Chinese Construction Industry. It can be said that, the paper can provide huge importance to dissertation topic with number of construction risks, risk management suggestions.

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MACE 60050 Project Management Research Methods Assignment

02.05.2012

PART IV: CONCLUSION

It is aimed to represent relevant information to provide depth understanding about risk identification and highlight the importance of risk identification techniques in the paper. Effective management of risk is a significant part of project management environment. The effectiveness of risk management process provides stable strategic direction to companies. Because of the complex nature of project environment, providing effective management of risk services can be seen as a difficult and a continuing process. In addition, risk identification process is one of the most important steps of risk management process. Firstly, understanding the perception of risk clearly has seen beneficial and the perception of risk subject discussed in the assignment. It can be said that one of the key points in this discussion is the lack of understanding in risk perception. Because understanding the perception of risk just as a negative event might be seen as a significant limitation of project management context. (Hillson (2002)) However, in addition to negative perception, also considering the positive perception of risk, can substantially affect the risk identification process and provides opportunity to evaluate the risk identification techniques in a detailed and bilateral way. In addition, it is also stated above that all projects includes different types of risk according to their environment. At this stage, understanding the different types of risks exist in construction industry and ranking the risks about effectiveness will be helpful to identify other potential different risks. In addition, understanding the nature of identified risks might be helpful to decide suitable risk identification technique for potential different risks in construction industry. Also one of the major issues of risk identification is to understanding the characteristics of different risk identification techniques. In this case, the effects of determinates to current risk management process and risk identification techniques can be seen crucial. It is notable that different identification techniques such as Delphi, NGT are used in nursing field. Understanding the key features of these techniques will be helpful to adopt these techniques to different industries. In addition, brief literature review of all identification techniques used in different environments will be helpful to constitute better understanding. There is no doubt to say that, different stages involve varied characteristics in projects. As a result using risk management process shows variance in different stages. For instance, because of fluid and less well defined structure, implementing a risk management process in early stages will be more difficult while implementing later gives rise to somewhat other difficulties. (Chapman (1997)) Information could be extended, however, because of the complex nature of using risk management process in different stages of project life-cycle, it is aimed to discuss these issues in the following steps of dissertation.

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REFERENCES
Chapman, C. (1997). Project risk analysis and managementPRAM the generic process." International Journal of Project Management, 15(5), 273-281. Chapman, R., (1998). The effectiveness of working group risk identification and assessment techniques. International Journal of Project Management, 16, pp.333-343 El-Sayegh, S. M. (2008). "Risk assessment and allocation in the UAE construction industry." International Journal of Project Management 26(4): 431-438. Handy, C. B., (1983) Understanding organisations. Penguin Books Limited, Middlesex, UK Hillson, D. (2002). "Extending the risk process to manage opportunities." International Journal of Project Management 20(3): 235-240. Kasap, D. & Kaymak, M. (2007). Risk Identification Step of the Project Risk Management. In: Management of Engineering and Technology, Portland International Center for, 5-9 Aug. 2007 2007. 2116-2120. Merna, A. and Njiru, C. (1998). Financial Engineering in the Procurement of Projects, Asia Law & Practice, Hong Kong Merna. T. And Al-Thani. F. (2005). Corporate Risk Management An Organisation Perspective, John Wiley & Sons Raz, T. and Michael, E., (2001). Use and benefits of tools for project risk management. International Journal of Project Management, 19, pp.9-17 Perminova, O., M. Gustafsson, et al. (2008). "Defining uncertainty in projects - a new perspective." International Journal of Project Management 26(1): 73-79. Shenhar, A. J., D. Dvir, et al. (2001). "Project Success: A Multidimensional Strategic Concept." Long Range Planning 34(6): 699-725. Smith, N. J., Merna, T. & Jobling, P. (2006). Managing Risk in Construction Projects Blackwell Pub. Ward, S. and Chapman, C. (2003) Transforming project risk management into project uncertainty management, International Journal of Project Management 21, pp97- 105, Elsevier Zou, P. X. W., G. Zhang, et al. (2007). "Understanding the key risks in construction projects in China." International Journal of Project Management 25(6): 601-614.

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