How can the nature of construction risk be considered?
How can the nature of construction risk be considered?
Construction risks can be defined as those factors that pose threats and problems to the overall project completion and hinders or impairs the achievement of the project's objectives that are having significant negative impacts on the scope, costs, schedule, and quality of the project. Risks can be clearly distinguished from uncertainty in that uncertainty cannot be quantified, whereas risks can be quantified. The potential sources of construction project risk could include unforeseen circumstances and problems related to the construction company's changing profit margin, competitive bidding process, weather conditions, job site productivity, political situations, inflation, contractual rights, and market conditions.
Risks associated with construction can be grouped based on their origin and impacts on the construction projects' objectives. These can be external, internal, and legal.
The project risk breakdown is shown below.
According to the breakdown of risks sources, construction project risks classified as internal, that is risk arising from within the project itself, or external that is risks arising from outside the project. External sources could include; legislative, political, economic, social as well as natural. Meanwhile internal sources could be; contract, technological, organizational, resources, and human factors
Step by step
Solved in 3 steps with 1 images
