The Importance of Risk Management

The Importance of Risk Management Risk management is an important part of decision making process in a construction company. Risk can affect productivity, performance, quality, and budget of a construction project. This chapter gives an overview of construction project risks. Meanwhile, risks in construction project will be recognized and classified into several groups. Furthermore, the current trend in risk management researches will also be discussed in this chapter. It is very important to elaborate risks in construction projects for the purpose of this project paper as to fulfil the first objective of this research, which is to identify and classify the risks in construction projects. Risk is defined as the chance of an adverse event depending on the circumstances (Butler, 1982). Risk is perceived as the potential for unwanted or negative consequences of an event or activity'(Rowe, 1977 ), a combination of hazard and exposure (Chicken and Posner, 1998). Recent research tends to emphasize the two-edged nature of risks, such as a threat and a challenge'(Flanagan and Norman, 1993), the chance of something happening that will have an impact on objectives; may have a positive or negative impact'(AS/NZS, 2004), combination of the probability or frequency of occurrence of a defined threat or opportunity and the magnitude of the consequences of the occurrence. This study examines mainly the negative impacts of risks inherent in construction projects through a combined consideration of the likelihood of occurrence and the magnitude of consequence. Risk management is a system which aims to identify and quantify all risks to which the business or project is exposed so that a conscious decision can be taken on how to manage the risks'(Flanagan and Norman, 1993). PMBOK included risk management as one of the nine focuses in project management and described it as the processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project. Recently, AS/NZS defined risk management as the culture, processes and structures that are directed towards realizing potential opportunities whilst managing adverse effects'(AS/NZS, 2004). In line with these definitions, risk management in the construction project management context is a systematic way of identifying, analysing and dealing with risks associated with a project in an aim to achieve the project objectives (Zou et al., 2007). Owing to its increasing importance, risk management has been recognized as a necessity in toda ys construction industry, and a set of techniques and strategies have been developed to control the influences brought by potential risks (Zou et al., 2007). A variety of risk and risk-related definitions are applied to construction projects, and no standard definitions or procedures exist for what constitutes a risk assessment. In the construction industry, risk is often referred to as the presence of potential or actual treats or opportunities that influence the objectives of a project during construction, commissioning, or at time of use (RAMP, 1998). Risk is also defined as the exposure to the chance of occurrences of events adversely or favourably affecting project objectives as a consequence of uncertainty (Al-Bahar and Crandall, 1990). According to (Walewski and Gibson, 2003) as mentioned by Dias and Ioannou (1995) , there are two types of risk: 1) pure risk when there is the possibility of financial loss but no possibility of financial gain, and 2) speculative risk that involves the possibility of both gains and losses. CIIs definitive work on construction risks (Diekmann et al., 1998) uses classic operations research literature t o distinguish the concepts of risk, certainty, and uncertainty, and is consistent with the literature (ASCE, 1979; CIRA, 1994; Kangari, 1995; Hastak and Shaked, 2000; PMI, 2001; Smith, 2001) on what is considered as the sequential procedures for construction risk management: 1) identification, 2) assessment, 3) analysis of impact, and 4) management response. Increased concerns about project risk have given rise to various attempts to develop risk management methodologies. An example of such is the Risk Analysis and Management of Projects (RAMP) method produced by the Institute of Civil Engineers and the Institute of Actuaries in the United Kingdom (RAMP, 1998) . This method uses a project framework to identify and mitigate risk by using the accepted framework of risk identification and project controls by focusing on risks as they occur during the project life cycle. It requires users to follow a rational series of procedures and to undertake this analysis at scheduled intervals during the life cycle of a project. Traditional risk assessment for construction has been synonymous with probabilistic analysis (Liftson and Shaifer, 1992, Al-Bahar and Crandall, 1990). Such approaches require events to be mutually exclusive, exhaustive, and conditionally independent. However, construction involves many variables, and it is often difficult to determine causality, dependence and correlations. As a result, subjective analytical methods that rely on historical information and the experiences of individuals and companies have been used to assess the impact of construction risk and uncertainty (Bajaj et al., 1997). Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective, such as time, cost, scope, or quality (i.e., where the project time objective is to deliver in accordance with the agreed-upon schedule; where the project cost objective is to deliver within the agreed-upon cost; etc.). A risk may have one or more causes and, if it occurs, one or more impacts. For example, a cause may be requiring an environmental permit to do work, or having limited personnel assigned to design the project. The risk event is that the permitting agency may take longer than planned to issue a permit, or the design personnel available and assigned may not be adequate for the activity. If either of these uncertain events occurs, there may be an impact on the project cost, schedule, or performance. Risk conditions could include aspects of the projects or organizations environment that may contribute to project risk, such as poor proje ct management practices, lack of integrated management systems, concurrent multiple projects, or dependency on external participants who cannot be controlled. Successful project management requires the identification of the factors impacting project scope definition, cost, schedule, contracting strategy and work execution plan. However much of the research related to risk identification, assessment and management for constructed facilities is focused on specifics such as location, categories of risks aspects, or types of projects. For example lists of relevant construction project risks have been developed (Kangari, 1995, RAMP, 1998, Smith, 1999, Hastak and Shaked, 2000, Diekmann et al., 1998) as well as political risk are available (Ashley and Bonner, 1987, Howell, 2001) . The value of systematic risk management of project activity is not fully recognized by the construction industry (Walewski et al., 2002) . Since no common view of risk exists, owners, investors, designers, and constructors have differing objectives and adverse relationships between the parties are common. Attempts at coordinating risk analysis management between all of the project participants have not been formalized and this is especially true between contractors and owners. (Hayes et al., 1987) defined three phases for risk management process (RMP), namely: risk identification; risk analysis and risk response. (Uher and Toakley, 1999) indicated that out of three phases involved in risk management, the concept of risk identification appears to be the most known and practiced. (Lam, 1999), in his paper which discussed risks associated with major infrastructure projects, and defined risk identification as listing of most, if not all, the potential areas where an undesired outcome may result. Such listing should be done at the earliest possible stage of the project. Furthermore, the author listed some techniques that could be used in risk identification such as brain storming, prompt lists, structured interviews and hindsight reviewers. Another useful method is to simulate events and relationships using a hypothetical project life cycle so that the relevant risk factors are made apparent. Risk identification is normally done in a group.(Chapman, 1997) introduced three methods for risk identification, namely: brain storming; Nominal Group Technique (NGT) and Delphi. These are ways to collect judgments from the project team. However, brainstorming was the most commonly cited technique. (Tummala and Burchett, 1999) defined Risk Management Process (RMP) as a logically, consistent and structured approach to enumerate and understand possible risk factors and to assess their consequences and uncertainties.(Chapman, 1997) stated that a formal (RMP) should be applied at all stages in the project lifecycle by project owners and contractors. Alternatively, the process is referred to by many authors as (PRAM) Project Risk Analysis and Management. However, it is the authors opinion that (PRAM) and (RMP) are similar terms for the same concept and can be used interchangeably. (Uher and Toakley, 1999) resented a paper discussing the use of risk management in the conceptual phase of the construction project development cycle where uncertainty is at its peak. Furthermore, (Cano and Cruz, 2002) explained a generic risk management process to be undertaken by organizations with the highest level of risk management maturity in the largest and most complex construction projects. As a final validation, Delphi analysis was applied to assess the risk management methodology. (Fang et al., 2004) presented a risk assessment model for tendering of Chinese building projects on the basis of identification and evaluation of the major risk events in the Chinese construction market. The findings showed that the risk of a project can be assessed through analysis of factors such as: owner type; source of project financing; existence or lack of cooperation between contractors and the owner; the intensity of competition for tendering and the reasonableness of the bid price. (Charoenngam and Yeh, 1999) stipulated the importance of a proper contractual foundation to ensure successful project execution, especially in case of projects involving multidisciplinary teams.(Thompson and Perry, 1992) addressed the necessity of model or standard sets of conditions of contracts where risk is allocated to different contract parties, but the principals behind this allocation have not been stated . Construction contracts are one of the primary vehicles of risk allocation and management, Ibbs et al. (1986). Furthermore, (Bubshait and Almohawis, 1994) stated that when a contractor is working in an unfamiliar construction environment, one source of risk is the contract conditions. There is significant evidence in the literature that checklists are the most commonly used methods of risks identification.(Uher and Toakley, 1999, Akintoye and MacLeod, 1997, Simister, 1998), all stated that checklists recorded the highest use among practitioners of risk management as compared to other techniques. (Uher and Toakley, 1999) stated that the most commonly applied risk identification techniques were checklists, brainstorming and flowcharts. Other techniques such as questionnaires, scenarios building and case based approaches were less popular, while techniques such as influence diagrams and Hazop were largely unknown. (Akintoye and MacLeod, 1997) on the basis of the results of a survey of risk management techniques conducted on general contractors and project management firms, stated that checklists based on intuition, judgment and experience recorded the highest formality with the respondents. The authors also stated that checklists could not be considered as a formal technique. (Simister, 1998) indicated that traditional methods are still favored in the UK, even though the level of awareness of other formal and more complex techniques is high. The study listed 12 techniques and indicated a percentage of the current/past use as well as the level of awareness for each technique. Checklists were the most popular technique, followed by Monte Carlo Simulation, Project Evaluation and Review Techniques (PERT), Sensitivity Analysis and Decision Trees. (Hassanein and Afify, 2007) in their study about Risk management practices of contractors: a case study of power station projects in Egypt identified a marked lack of consistency in the contractors risk identification effort. Contractors possessing past experience in Egypt were far better able to identify the relevant risks. On the other hand, local Egyptian contractors with vast experience in Egypt but limited project management experience were shown to lack the necessary expertise to properly identify risks and to take the appropriate exceptions. Furthermore, the results revealed that bidders do not include in their proposals their true lists of exceptions which represent genuine risks to them.

Communication and interpersonal skills Essay

Understand how communication and interpersonal skills affect managerial performance in the workplace Evaluate how interpersonal skills and communication skills affect managerial performance 2.1It is self-evident that communication and interpersonal skills are crucial in the workplace. Good two-way communication is important to enable the flow of information in an effective way whether it be verbal or non-verbal. Good communication has a positive impact on the performance of the team including; everyone is clear what is expected from them, they receive good feedback and recognition of achievements which makes staff feel valued and boosts employee morale. The manager needs to be approachable and have a non-threatening manner so staff feel at ease when discussing any issues or concerns. Good interpersonal relations encourage open behaviour where everyone is working as a team and supporting each other with a common sense of purpose. When goals and objectives are clearly set, with colleagues feeling involved and motivated, it has the overall effect of connecting each staff member and enabling team work. All of this results in a much stronger performance from the organisation as a whole, delivering high quality dental care in a happy relaxed environment and inevitably It will be much more successful in achieving its goals Poor communication results in staff being unclear of objectives, de-motivated and giving the impression of disinterest or even arrogance. Failure to communicate effectively often leads to conflict and the spread of rumours can begin to circulate which can harm a business internally as well as externally. It would be impossible to achieve the practice’s goals and objectives if there is significant conflict in the workplace. Boredom and a negative attitude also influence an employee’s receptiveness to a message. Overall poor communication and interpersonal skills have an adverse and counterproductive effect. Provide an evaluation of two or more strategies to overcome barriers to effective managerial communication and interpersonal skills. 2.2 In a small practice with part-time team members there is a high possibility of communication failure for example; messages not being passed on at all or incorrectly, decisions made earlier in the week without involvement or reference to all colleagues. This may result in mixed perceptions or feelings of marginalisation. To overcome this barrier, staff meetings are to be held on dates where all staff can attend. If this is not possible the minutes of the meeting should be written out and forwarded on to the appropriate people. It is also important to seek feedback regularly to check the message has been conveyed in a clear and concise way. Forums and emails are an efficient mechanism for short, chatty updates. It is also a good method of quickly communicating messages to several people and allowing further discussion with feedback and input. Another communication barrier that could occur would be staff not being clear of tasks that have been set for them to do by the busy, Principal Dentist. If this is done in an ad hoc, informal manner the tasks may not be done in the correct way or simply keep being rolled forward. To help overcome this barrier, I would need to ascertain from the Principal exactly what is required and when. I would then devise a rigorous schedule with clear step-by-step guide on what needs to be achieved. I would negotiate with individuals and delegate specific tasks depending on the skills required. The schedule would record who has been made responsible and have a checklist to be signed against. This would be displayed in a prominent position for example the staff room or a whiteboard. Once the job has been completed I can then report back within the time frame that the Dentist requires.

Cultural Norms, Fair & Lovely and Advertising Essay

2. Is it ethical to exploit cultural norms and values to promote a product? Discuss. It is ethical to utilize cultural diversity and values of a community to promote a product. However, such promotion should only be done in a way that there are not demanding to a particular group or cultural norms. Considering the case of Fair and Lovely, promoting the product using the dark and fair skin is divisive and portrays people with dark color as inferior to those with lighter color. In addition to that, the advertising identifies people with lighter color as people who have more opportunities in life, something that is likely to demean people with dark color. To this extent, the promotion is unethical. 3. Is the advertising of Fair and Lovely demeaning to women, or is it promoting the fairness cream in a way not too dissimilar from how much cosmetics are promoted? Advertising of Fair and Lovely are demeaning to women with dark color. Fair and Lovely portray women with light color as the only group that have opportunities. These advertisements offend people with dark color, considering that character, abilities, and opportunities are not defined by color. The advertisement should concentrate on its effectiveness and not describe the difference between light skin and dark people. 5. In light of AIDWA’s charges, how would you suggest Fair & Lovely promote its product? Discuss. Would your response be different if Fairever continued to use â€Å"fairness† as a theme of its promotion? Discuss. I would suggest that Fair and Lovely reconsider the cultural impact of their advertisements. AIDWA should demand that HLL answer a few questions in the respect of their issues. The questions include: Does the Fair & Lovely advertisement depict racism?

Nike Reebok - 4026 Words

Company Overviews Nike In 1964 in Oregon, Phil Knight and Bill Bowerman join together to make a new enterprise; each contributed about $500 to the partnership. The company started bringing low priced and high tech athletic shoes from Japan to replace the German domination of athletic shoes in the industry. In 1971, a graphic design student created the Swoosh trademark for a $35 fee. In the same year Jeff Johnson, Blue Ribbon Sports first employee, made his most durable contribution to the company in coming up with a new name, Nike, after the Greek goddess of victory. NIKE is the world s #1 shoemaker and controls over 20% of the US athletic shoe market. Reebok Reebok s ancestor-based company came from the United Kingdom and it†¦show more content†¦Consumers The bargaining power of consumers is medium to high. The power of purchases made by the individual buyers group is not concentrated in large volumes and the products that the consumer purchases are not standardized. With low switching costs in process and with so many buyers, the shoes industry has to be updated very often. Furthermore, the industry sets and creates the fads and determines what is hot. On the other hand, the buyers, like corporate retailers and sports teams, have very high bargaining powers. Because, the shoes they wear have to be changed often and also sports teams can become great advertisers for any given company. Potential Entrants The threat of new entrants into the industry is low. The start-up costs are somewhat high, consumer loyalty within the market is moderate and the learning curve is pretty short. The entrance barriers are high in that the capital requirements are high due to up-front advertising and research and development. Also, economies of scale in production will be difficult to reach due to the difficulties of penetrating the market that is dominated by the large five: Nike, Reebok, Coverse, LA Gear, and Stride-Rite. 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