TIMING OF RISK MANAGEMENT ACTIONS DURING THE CONSTRUCTION PROCESS: RELATIONSHIP WITH CONTROLLING PROJECT COST AND SCHEDULE IMPACTS

Abstract

Risk Management is a critical aspect of effective project control within the construction industry. Considering the fact that the construction process is subject to a diverse set of risk elements, the objective of this study was to better understand the risk distribution across the construction phase and the relationship between risk management actions and project cost and schedule performance. In the construction literature, many studies have analyzed project cost and schedule performance, qualitative perceptions regarding the relative importance of construction risk factors, and the cause, effect, and timing of individual change orders. This study contributes to the existing body of knowledge by providing an empirical understanding of the relationship between risk management actions taken by construction project teams and the corresponding impacts of the risks to budget and schedule. To investigate the influence of risk management actions on project performance, this study contributed a more detailed unit of measure than previous literature by systematically documenting all risk events (N=1502) encountered by project teams across the construction phase of 68 construction-building projects. New variables – risk resolution timing, risk active duration timing, and risk loading that have not been empirically measured in previous studies were introduced. Analysis was conducted through both descriptive and inferential statistical methods. The results included statistically significant relationships between cost and schedule performance and risk management actions at both the project-level (timing and magnitude of peak risk loading) and individual risk level (identification, resolution, active duration). The relationship between the risk management actions and the impacts of risks, derived from this study are useful for project management teams to understand in terms of the sheer complexity and amount of resources required to successfully manage the numerous potential risk impacts that face a construction project.