Affiliation: University of South Australia
Primary supervisor: A/Prof. Konstantinos Kirytopoulos
Thesis language: English
The aim of this research is to extend the existing knowledge of risk management (RM) practice in construction projects to determine what processes underpin decision making and which tools and techniques are relevant to this process.
The research examines whether the complex and changing context of the construction industry influences the applicability and benefits of some tools. This study culminates with the development of a model which explains Construction Project Managers (CPMs) risk decision making processes and identifies what and why they apply the tools they do.
The study answers two main questions. Firstly, how CPMs make their risk management decisions, which risk tools and techniques (RT&T) they use and why they select these tools. Secondly whether there is evidence of the pressure of institutional isomorphism on RM practices or whether CPMs decouple their decision-making to develop a distinctive approach.
A pilot study was conducted initially applying the Grounded Theory (GT) method. This pilot study utilised in-depth interviews of four CPMs and was undertaken to gain an initial appreciation of their perspective of project risk management and how they conducted their work. This application of GT used open interviews which covered a broad range of subjects based on project risk management. Subsequently, these interviews and any supporting information provided by the interviewees were reviewed, shared topics or codes were identified, and these were in turn grouped into common themes.
An additional twenty-one CPMs were then interviewed, using the narrative technique based around the themes generated in the pilot study. NViVo12 was used as a mechanism to conduct thematic analysis. This analysis was used to codify and summarise the large amount of data into internally consistent understandings of risk decision-making and the reasoning for choices of tools and techniques. In addition, to the open discussion section of the interviews, the CPMs were surveyed on the type of RT&T they used and the level of uncertainty that existed in their projects. There is clear evidence that CPMs interviewed preferred qualitative tools and techniques, with look-up methods and supporting methods been used extensively (52% of all RT&T selected). The most common methods used were brainstorming, WBS, document reviews; none indicated the use of more complex methods and there were almost no claims of the use of quantitative tools. The evaluation methods were also used widely making up just under 20% of the RT&T selected by participants.
A decision-making model (Figure 1) was developed subsequently to the analysis of the research findings. This model drew on the influence of the level of knowledge and risk on the CPMs decision-making and their choice of tools. To validate the findings 11 experts, undertook three rounds of a Delphi survey, where they were asked to ratify statements and the model.
The findings revealed that CPMs preference for qualitative tools and techniques was due to their confidence in the quality of the accrued experience of themselves, their teams and other stakeholders. Institutional isomorphic pressure to conform to industry best practice does not appear to apply to operational risks except for OH&S risks where there is clear coercive, mimetic and normative pressure to comply. CPMs appear to have decoupled their practice, from the full range of RT&T as proposed by risk standards and Body of knowledge, to choose only a selection of specific RT&T which provides them more flexibility to manage the distinctive characteristics of their industry. A model summarising the institutional isomorphic pressure on OH&S and Operational Risks has been created.
CPMs are constrained by the increasing complexity of their projects, and the industry's contractual structure, which pushes risk across all stakeholders in the project. Added to this is the uniqueness of each project, the lack of historical data and the time and cost restrictions on their projects. CPMs therefore adopt a 'sense making' or short cut process to their risk decision making. Experience is also a critical factor; more efforts need to be made by educational institutions and organisations to capture this knowledge transfer via better mechanism than written documents.
An empirical decision model was created based on the perceived risk and the level of knowledge of the risk. This model divides the risks into four categories and specifically those decisions that CPMs can: (1) replicate their knowledge (high knowledge/low risk); (2) plan for emergent risks (high knowledge/high risk); (3) seek assistance to fill their knowledge gaps (low knowledge/high risk) and (4) those decisions they are confident to postpone until they have more information (low knowledge/low risk). This model was validated by the 11 Delphi CPMs.
This research extends the existing knowledge of RM among project managers in the construction industry by comparing the theoretical expectations as identified and advocated by the risk standards and the body of knowledge and questioning the applicability of some methods given the constraints CPMs experience. A decision-model has been developed to demonstrate how CPMs make decisions within the unique context of their industry. Limitations of the study include the need for testing of the empirical decision model, and a wider geographical context for the study. Further research is needed to evaluate and determine whether the model developed applies across the industry and even in other industries who are not managing unique projects in complex environments.
The contribution of this research to the body of knowledge is manyfold. It provided a new understanding of the impact the context has on the risk decision tools used and the decision process. The value of this is that it provides a perspective often lacking from academic research which relies on iconic projects rather than routine representativeness. Also, it provides new evidence regarding the importance of team planning, the bringing in of new knowledge to the planning via joint ventures, new employees or/and the use of external networks as the principle mechanisms applied by PMs to manage their uncertainty. Furthermore, it reveals that the growing amount of pressure to conform to industry best practice does not appear to apply to industry best practice for RT&T in the construction industry, except when it comes to OH&S risks.