AN INVESTIGATION INTO RISK MANAGEMENT PRACTICES AMONGST QUANTITY SURVEYORS IN THE CONSTRUCTION INDUSTRY OF NIGERIA.
1.1 BACKGROUND OF THE STUDY
Quantity surveying is concerned with controlling and managing construction projects. The Nigerian construction industry is faced with uncertainties. With construction targets not being met and high rate of abandoned construction projects, there is great need for proper risk assessment and implementation. Managing risks in construction projects have been recognized as a very important process in order to achieve project objectives in terms of time, cost, quality, safety and environmental sustainability (Mills, 2001). Project risk management is an iterative process: the process is beneficial when is implemented in a systematic manner throughout the lifecycle of a construction project, from the planning stage to completion.
Risk management has become an integral process in managing construction projects. Construction project activities are to be well calculated in-order for the deliverable to be of great use and benefit to its stakeholders. To complete most construction projects on time, minimizing cost and wastages proper risk management techniques must be employed (Tchankova, 2002). According to Mills (2001), systematic risk management is expecting the unexpected or in other words it is a tool which helps control risks in construction projects and its objective is to introduce a simple, practical method of identifying, assessing, monitoring and managing risk in an informed and structured way.
Normally, in risk management process, the first steps will involves risk identification process which includes the prioritization process in order to identify and rank the risk based on its impact and seriousness. Risk that will have a greater impact on a project normally will be handled first and low impact risk will be handled later.
Construction project team consist of professional such as the architect, engineer, and the quantity surveyor that will help to assist and advice the client in order to meet all the project objectives in term of time, quality and cost. Awareness and knowledge on risk management is very crucial so that they will deal with the risk properly which will directly leads to project success. Due to this scenario, this research aims to identify the level of awareness of construction professional specifically Nigerian quantity surveyors towards risk management. Apart from that, it will also aim 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.
1.2 STATEMENT OF THE PROBLEM
Embarking on a construction project involves taking risks, as the Nigerian construction industry is not risk-free. No matter how small or simple is the project it is still can go wrong as soon as the two parties, the employer and the contractor signed a contract they have taken onboard the risk (Sawczuk, 1996). The individual in the construction industries that undertake various activities are heterogeneous since client, consultant and contractors have different roles and objectives (flanagan, 1995). Risk management in Nigerian construction industry is actually not widely being practiced.
According to Burchett (2009), Risk in construction, however cannot be eliminated, but it can be minimized, transferred or retained. However, the industry has a very poor reputation for managing risk, with many projects failing to meet deadlines and cost argents (Mills, 2001). In practice, normally in order to deal with the unexpected event, there will be an allocation about 10 percent from the estimated cost of the proposed construction project as a contingency sum. Earlier observation shows that the risk management process is not widely being implemented in Nigerian construction industry. For this reason, this research seeks to identify the barriers and challenges for the implementation of risk management in the Nigerian construction industry.
1.3 OBJECTIVES OF THE STUDY
The aim of this research is to investigate the practice of risk management amongst the 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:
1.4 RESEARCH QUESTIONS
1.5 RESEARCH HYPOTHESIS
1.6 SIGNIFICANCE OF THE STUDY
Findings of this study will aid Nigerian quantity surveyors in appreciating the importance of adopting proper risk management techniques in their daily jobs. Since risk management is not widely being adopted in Nigerian construction industry, this research will help to promote the practice of risk management among the industry’s players.
In addition to this, being an inter-discipline type of research, both the consultants and contractors and also the industry as a whole may benefit from the outcome of the research and have better understanding on risk management.
1.7 SCOPE AND LIMITATION OF STUDY
This research study will focus on risk management practices adopted by quantity surveyors in Uyo Local Government area of Akwa Ibom State, Nigeria. All findings and recommendations from the study are limited to findings and recommendations based on the chosen sample size.
In carrying out this study, the researcher was faced with time and finance constraints, as lectures did not give room for more time to extend the research time frame. Finance on the other hand made printing, transportation to cover a wider area difficult.
1.8 DEFINITION OF TERMS
RISK- This is the potential of losing something of value, weighed against the potential to gain something of value.
RISK PERCEPTION- Risk perception is the subjective judgment people make about the severity of a risk, and may vary person to person
PRACTICE- is the act of rehearsing a behavior over and over, or engaging in an activity again and again, for the purpose of improving or mastering it, as in the phrase “practice makes perfect
QUANTITY SURVEYOR- a Quantity Surveyor (QS) is a professional working within the construction industry concerned with construction costs and contracts.
CONSTRUCTION- In the fields of architecture and civil engineering, construction is a process that consists of the building or assembling of infrastructure. Far from being a single activity, large scale construction is a feat of human multitasking. Normally, the job is managed by a project manager, and supervised by a construction manager, design engineer, construction engineer or project architect.
RISK MANAGEMNENT- is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.