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Level of risk management knowledge among construction project managers in Sri Lanka

Authors:

Abstract

Risk management often becomes a significant concern among the construction professionals especially due to the complex nature of the industry. Though it is a popular subject in project management discipline, it was observed that authentic application of the principles of risk management at times is arguable in practice. As a Project Manager who is a key role player in a project, it is vital to have a solid knowledge on risk management and its related arena. Evidence was found of limited risk management knowledge among construction professionals. Therefore, a study was conducted to find the status of risk management knowledge among the construction Project Managers in Sri Lanka. A mixed method approach was followed by a comprehensive literature review on elements of body of knowledge of risk management and later a questionnaire survey to contextualise the status of the knowledge gap of Project Managers in real. According to the findings of the study, it could be concluded that Sri Lankan Project Managers are not fully confident on their risk management knowledge. It was primarily likely to be due to the limited learning in the subject area when pursuing higher studies. The study also identifies the options to device appropriate strategies to improve risk management knowledge among the Construction Project Managers in Sri Lanka.
Welikala, D.H.N., Jayasena, H.S. and Perera, B.K.C., 2022. Level of risk management knowledge among
construction project managers in Sri Lanka. In: Sandanayake, Y.G., Gunatilake, S. and Waidyasekara,
K.G.A.S. (eds). Proceedings of the 10th World Construction Symposium, 24-26 June 2022, Sri Lanka.
[Online]. pp. 637-647. DOI: https://doi.org/10.31705/WCS.2022.51. Available from:
https://ciobwcs.com/2022-papers/
637
LEVEL OF RISK MANAGEMENT
KNOWLEDGE AMONG CONSTRUCTION
PROJECT MANAGERS IN SRI LANKA
D.H.N. Welikala
1
, H.S. Jayasena
2
and B.K.C. Perera
3
ABSTRACT
Risk management often becomes a significant concern among the construction
professionals especially due to the complex nature of the industry. Though it is a popular
subject in project management discipline, it was observed that authentic application of
the principles of risk management at times is arguable in practice. As a Project Manager
who is a key role player in a project, it is vital to have a solid knowledge on risk
management and its related arena. Evidence was found of limited risk management
knowledge among construction professionals. Therefore, a study was conducted to find
the status of risk management knowledge among the construction Project Managers in
Sri Lanka. A mixed method approach was followed by a comprehensive literature review
on elements of body of knowledge of risk management and later a questionnaire survey
to contextualise the status of the knowledge gap of Project Managers in real. According
to the findings of the study, it could be concluded that Sri Lankan Project Managers are
not fully confident on their risk management knowledge. It was primarily likely to be due
to the limited learning in the subject area when pursuing higher studies. The study also
identifies the options to device appropriate strategies to improve risk management
knowledge among the Construction Project Managers in Sri Lanka.
Keywords: Construction Industry; Project Management; Risk Management; Sri Lanka.
1. INTRODUCTION
The construction industry in nature itself is complex and it is exposed to various risks.
Managing such risks play a vital role in the sector which has direct impact on project
performances. While it is clear that risks are inevitable, managing risks using effective
methods has already been identified as a crucial concern. The major objectives of risk
management were stated as identifying and reducing the risk for the success of the project
and achieving its goals. Even though construction projects of different scales incorporate
different levels of risks, their effect should not be disregarded (Maytorena, et al., 2004;
Ray, 2017).
Risk management is one of the foremost disciples brought out in project management
practices. Apparently, Bosse in 2020, showed that the responsibility of risk management
has to be taken by the Project Manager in each construction project. Iacob (2013) has also
1
Teamwork Engineering Services (Pvt) Ltd, Sri Lanka, donwelikala96@gmail.com
2
Department of Building Economics, University of Moratuwa, Sri Lanka, suranga@uom.lk
3
Department of Quantity Surveying, Sri Lanka Institute of Information Technology, Malabe,
kavinya.p@sliit.lk
D.H.N. Welikala, H.S. Jayasena and B.K.C. Perera
Proceedings The 10th World Construction Symposium | June 2022 638
mentioned that multidisciplinary training, varied experience and education of risk
management were important as a Project Manager to be competent in mitigating and
managing the risks. Therefore, it can be stated that, construction professionals have
already acknowledged the essentiality of knowing the risk management techniques and
applications properly, by the Project Managers. Meanwhile, Madushanka and Tilakasiri
(2020), have found that, there was a lack of awareness of risk management among the
construction industry professionals in Sri Lanka. However, it was observed that, the level
of knowledge gap was not established either by them or by any scientific source so far.
There are key elements of risk management body of the knowledge that Project Managers
are required to know and be skillful, in order to properly manage the risks. Lack of such
knowledge shall become a key source for aggravated exposure to risks (Ghale, et al.,
2021; Sankar, et al., 2022). Thus, this brings the need for strategies to equip Sri Lankan
Project Managers with necessary risk management knowledge. To device effective
strategies, it is imperative to identify the gaps in current risk management knowledge
among them.
Hence the aim was set as finding the status of risk management knowledge among
construction Project Managers in Sri Lanka. The knowledge status was contextualized
from several perspectives: viz (a) confidence on risk management knowledge, (b) subject
learning, and (c) preference for learning. The set objectives of the study were 1) identify
the key elements of risk management body of knowledge, 2) identify the knowledge
acquisition process of those key elements and 3) find the level of acquisition of those
elements by the Project Managers in Sri Lankan construction projects.
2. ELEMENTS OF RISK MANAGEMENT BODY OF
KNOWLEDGE
From the past, construction industry has associated with risk management theories and
techniques. This has become a vantage to avoid sudden emergencies and to pursue a stable
construction process for clients (Dionne, 2013). Howbeit, the construction industry has
made relatively slow progress in realizing the advantage of risk management, wherein
which, stakeholders mainly focused on other aspects of project performances. Even, in
Sri Lanka risk management was not satisfactorily established due on various grounds
(Perera and Rameezdeen, 2014).
Management of risks is a salient feature and quite a challenging task in practical
implementations. Since risk management is a frequentative process, responsible
department, personnel or the Project Manager required the skills on realizing and
recognizing the main causes of risk and monitoring them throughout the project duration.
Banaitiene and Banaitis (2012) have presented the importance of this process while
accommodating it in a systematic manner from the inception to the end of the project life
cycle. As mentioned by them, Project Management Institute has stated that, management
of risks was one of main competencies out of the other nine competencies of knowledge
that Project Managers require to be promoted. After conducting thorough literature
survey, following steps were found as the body of knowledge in risk management for
Project Managers.
Level of risk management knowledge among construction project managers in Sri Lanka
Proceedings The 10th World Construction Symposium | June 2022 639
2.1 RISK MANAGEMENT PLANNING
Good risk management plan has helped to Project Manager to handle the risk in the
construction project. Also, this helped to identify ways of assessing the risk and how often
it requires to plan (Parker and Mobey,2004). According to Watt (2020), there were four
ways to act upon a risk. Those were accepting, avoiding, mitigating, and transferring.
Avoiding the risk was the best action that could carry out. If it’s possible to prevent risk
or its impact that won’t create any damages for the construction project. Unless, avoiding
the risk wouldn’t be the best option rather mitigating would be the best way to deal within.
Thus, it is mandatory to predict and plan the risk well as to mitigate with the least
disturbance for the project.
2.2 RISK IDENTIFICATION
The next stage of management of risk was the identification of risks. This was another
important part for Project Managers to be concerned about. They should have proper
knowledge on identifying risks in the projects. This step identified the potential risks that
are very common and other uncommon risks events. According to the given literature,
risks were investigated by studying the activities of organizations in all directions and
trying to present new risks that would arise in the future as a result of changes in the
external and internal environment. (Ranong and Phuennggam,2009). Normally, in the
identification period, previous similar project’s risks were observed and analysed.
Moreover, it was not limited the previous project’s risks but also incorporate many other
risks that could have happened in the new project. Hence, it is indeed to be thorough in
this knowledge area and having good experiences may aid well in advance to ascertain
all upcoming risks.
2.3 QUALITATIVE RISK ANALYSIS
The qualitative analysis made it possible to identify the significant risk factors. The aim
was to compile a list of the key roots of risk and a description of their possible outcomes,
including an initial estimate of their potential impact on time and cost calculations (Perry
and Thompson, 1992). Many managers have accepted that, this initial qualitative analysis
was important and brought significant benefits in terms of understanding the project and
its possible problems as mentioned by Perry and Thompson (1992). Also, this analysis
included assessing the probability, the impact of various risks, and identifying risks to
improve project performance while identifying high priority risks (Nadaf, et al., 2018).
This was also an important factor in improving Project Managers' knowledge and skills
when managing risks.
2.4 QUANTITATIVE RISK ANALYSIS
Another identified body of knowledge on risk management was quantitative risk analysis.
This was a process that explored the cumulative impact of identified individual project
risks and other sources of unpredictability on the overall objectives of the project
mathematically. It contained more advanced techniques and methods to investigate and
analyse the risks of construction projects. Usually, it involved more complex analytical
methods that often require computer programs. The use of quantitative risk analysis made
it possible to model the showing of a construction project and quantified the probability
of the appearance of identified risk factors and their possible impact (Banaitiene and
D.H.N. Welikala, H.S. Jayasena and B.K.C. Perera
Proceedings The 10th World Construction Symposium | June 2022 640
Banaitis, 2012). The purpose of quantitative analysis of risk was to determine the impact
of the recognized risks on the overall objectives of the project. (Bansal, 2019).
2.5 RISK RESPONSE PLANNING
According to Chou and Wang (2003), the risk response planning was the choice of an
appropriate reduction strategy which used to reduce the negative impact of the risk.
Further, they have mentioned, the way that risks have to be managed or handed over the
same into another party or retained itself. Similarly, this method was also used to reduce
the threats of the project. To adopt this technique, Project Managers have to be aware of
the content and the repercussions of such risks (Miller and Lessard, 2001). The goal of
this method was to achieve project objectives at planned cost without unnecessary
overruns and take action to minimize its threats beforehand (Fang et al., 2013).
2.6 RISK MONITORING AND CONTROLLING
Risk identification, planning, and tracking new risks involve risk monitoring and
planning. According to Schieg (2010), there were four strategies of risk control. They
were avoidance, decrease, passing on risk and bearing the risk by oneself. This included
tracing existing risks, recognizing new risks, monitoring the effects of previous risk
management activities and evaluating the effectiveness of present risk management
processes. Same as mentioned above, this step also a necessary body of knowledge that
Project Managers are required intentionally.
The above-discussed body of knowledge on risk management is on-demand essentiality
of the industry. Hence, the Project Managers as key role players of a construction project
are mandated to be qualified and should be competent in the above knowledge areas.
There are variety of sources available to improve their knowledge as well as their
awareness. To acquire these bodies of knowledge, Project Managers need to update their
knowledge and improve the skills via training, and other mechanisms which can be
provided by their companies to them such as coaching programs, mentorship programs,
seminars and status meetings. Despite that, Jen (2012) has stated, self-training can
increase the knowledge about the risk management substantially.
3. RESEARCH METHODOLOGY
From the literature review conducted in previous section, the key elements in the body of
knowledge of risk management were identified. As to achieve the aim of the study, the
research was designed according to the mixed method approach where both qualitative
and quantitative data have been analysed. The selected strategy of inquiry was a survey.
Hence, the deductive theory was adopted and the believed research philosophy was
pragmatism where questions were asked from a number of people and some of the
observed data were measured in the data analysis.
The adopted research methodology was as follows. Initially a literature review was
conducted to identify the required knowledge on the risk management as Project
Managers. Accordingly, an extensive set of data on important body of knowledge in risk
management was found exploring various sources regarding risk management discipline
in construction projects. The used sources were journal articles, online reports, books and
relevant other available resources. Based on the findings of conducted literature review,
a questionnaire was developed to establish the existing body of the knowledge. While
Level of risk management knowledge among construction project managers in Sri Lanka
Proceedings The 10th World Construction Symposium | June 2022 641
questionnaire survey carried many quantitative questions as in multiple options, few
explorative questions were inserted to gather qualitative data. The questionnaire has
consisted of eleven questions and each question was designed to collect data in order to
furnish the status of existing knowledge of Project Managers in risk management. The
prepared questionnaire was on an online form and it was sent for twenty-five participants
who were working in the construction field as Project Managers in Sri Lanka and
collected the necessary data for the research. The collected data were analysed based on
their own percentages in the collection of overall data. Other numerical data were
analysed as at average value. For example, the learning hours of risk management topics
were analysed as average values. The data representation was done via graphical methods
for further clarification. The last question was an open question that was analysed through
a descriptive method. From the collected data, knowledge acquisition process of the key
elements of body of knowledge in risk management and the level of acquisition of those
elements by the Project Managers in Sri Lankan construction projects were analysed and
compounded. Finally, the conclusions of the study and the recommendations of novel
enunciator were given for future implementations.
4. DATA ANALYSIS AND DISCUSSION
Based on literature review in this study, the key elements of body of knowledge in risk
management were identified. The survey was done to find out the knowledge and
confidence about risk management in construction industry among the industry
professionals. The obtained raw data were analysed with the aid of pie charts for clear
graphical representation. The analysis output paved the path to reach a conclusion by
discussing the findings of the questionnaire survey. This section is based on the findings
that were obtained in the data collection.
4.1 DEMOGRAPHIC DATA
In this research, demographic data gives an idea about the professional qualifications of
the personals that provided the data for the survey. Thus, Figures 1 and 2 presents the
educational qualifications and the number of years of gained experience in the field.
Figure 1: Educational qualifications Figure 2: Years of experience
Since the survey was limited to Project Managers, out of twenty-five respondents
eighteen Project Managers were Bachelor’s degree holders while one person had a
masters’ degree and six respondents were diploma holders. When considering the years
of experience in the field, Figure 2 shows that, only three people had experience below 5
years. More than 60% of the respondents had either 10 years or more years of experience
in the industry. Considering all these factors, it can be considered that all the respondents
D.H.N. Welikala, H.S. Jayasena and B.K.C. Perera
Proceedings The 10th World Construction Symposium | June 2022 642
were responsible personnel in field who were having a sound knowledge about the
subject.
4.2 CONTEXTUAL DATA
In order to achieve the set research aim, the contextual data which includes the subject
matter in which deployed for analysis were given below.
4.2.1 Confidence on Knowledge about Risk Management
The responses for the question about the level of confidence were limited to intermediate
levels. 56% of personals were quite confident about the knowledge while rest of all the
Project Managers were somewhat confident. Interestingly, none had recorded their
responses as in either fully confident or not confident at all. In complying with the above
demographic finding, all the participants in the sample were taken as sound
knowledgeable professionals and it was a comparatively good sign to have no response
as “not confident”. On the other hand, nobody was assured enough to state out that they
were “full confident” though the majority was been the industry more than ten years.
Figure 3 represents graphical view on confidence level of total sample set.
Figure 3: Confidence level
4.2.2 Risk Management Studying
The respondents answered a question by stating that, if they learned nothing on risk
management, risk management as a part of a subject module, or as a separate subject
module of a full. Although they had come from different diplomas, Bachelor’s degrees
and Master’s degrees, no program had taught them risk management as a separate subject
module. This was a considerable observation that was found in the educational system
which would cause the way to exist “not fully confident” Project Managers in the field of
risk management.
4.2.3 Qualification which taught Risk Management
The level of qualification in which the risk management was taught is shown in Figure 4.
Figure 4: Qualification which taught risk management
Level of risk management knowledge among construction project managers in Sri Lanka
Proceedings The 10th World Construction Symposium | June 2022 643
Out of the twenty-five respondents, fifteen experts have studied the risk management in
Bachelor’s degree programme while other ten experts have studied risk management in
their diploma programme. This indicated that in Sri Lanka, the risk management was only
taught in initial levels of higher study programs. The relevant area of the subject was
touched neither Master’s degree programs nor chartered programs.
4.2.4 Total Number of Hours Spent on Learning and Studied Areas on Risk
Management
By taking the average of the collected responses, the average learning hours that were
being allocated for learning risk management could be identified as 10 hours. The key
areas that have been taught were found as risk management planning and mitigatory
measures. Although a diploma or a degree runs for two to four years’ time, only 10 hours
were allocated for risk management learning which indicates that a less attention and
priority has been given by the programme itself. This could imprint a less consideration
towards risk management discipline among diplomats and graduands who were going to
be occupants in the industry. The total number of hours spent on learning risk
management is given in the Figure 5.
Figure 5: Total number of hours spent on learning
4.2.5 Studied Topics in Risk Management
Among the study topics of risk management, the mostly studied topic was risk
management planning which followed by risk monitoring and controlling (refer Figure
6). Only seven Project Managers had studied on risk identification. From the survey, it
was clear that no much attention was given to quantitative risk analysis, risk response and
qualitative analysis planning in the subject modules as per the conducted construction
educational study programmes. But all these topics were recognised as essential learnings
that all Project Managers should be thorough as key role players in the construction
industry. The lack of knowledge in these two areas clearly indicates a problem in the
practical field.
Figure 6: Studied topics in risk management
D.H.N. Welikala, H.S. Jayasena and B.K.C. Perera
Proceedings The 10th World Construction Symposium | June 2022 644
4.2.6 Number of Hours Spent on Studying the above Topics
In average, the mostly studied topic has been taught for 6 hours which is 60% of the total
studied period on risk management. From the survey, it was clear that, mostly the risk
management was only taught via a single case study regarding a single construction site.
This clearly projects the poor educational background that has being provided for risk
management by many study programmes. Figure 7 shows the number of hours spent on
the mostly studied topic key knowledge elements by the Project Managers.
Figure 7: Number of hours spent on studying the key knowledge elements
4.2.7 Other Risk Management Topics Learnt
Other than the given options, risk management was mentioned as the other mostly studied
topic area among the respondents. Whereas in section 4.2.5, none of the respondents
chose either qualitative risk analysis or quantitative risk analysis out of given options.
Hence, it can be seen that, respondents were familiar with the term ‘risk assessment’ but
not the ‘quantitative and qualitative risk analysis’ where the similar content has been
covered in both the instances. Having said that, this showed that taught programs adopt
‘risk assessment’ term than the two other analysis terms in Sri Lanka. Most of the
respondents revealed that the study of risk management was completed by preparing a
risk assessment for a case study. Also, the risk mitigations were discussed within those
programs. These two topics have occupied about 5 hours in lecturing. But four
respondents have mentioned that although the subject module limited its time duration,
they have self-studied about the topic for more than 12 hours in order to prepare the risk
assessment. Some few other participants have answered that, they have been taught on
risk management and improvements to risk management. Further they recorded their
duration of learning as 2-4 hours for the above topics. Two respondents have studied
about risk identification for 2 hours session while a single person has mentioned that,
unforeseen risk management was learned for three hours. Apart from all these, one person
has mentioned that he/she could not remember what else he/she studied. Therefore, it
shadowed, how professionals in the construction industry hindering the risk management
discipline even still being engaged in live projects.
4.2.8 Other Topics Respondents liked to Study
Other than the deductive questions, the questionnaire was included an explorative
question also to find other topics that respondents were willing to learn on risk
management. Accordingly, these answers were the ones that the respondents considered
as the most important topics to learn other than the taught course or subject module. After
analysing the responses, it was clear that many respondents considered the ways of
addressing the risks are the most crucial thing that need to learn. Having said that, it could
be considered as important factor because, sometimes the most damage would not cause
by the risk, but from the deficiencies of the way that the responsible personal react.
Level of risk management knowledge among construction project managers in Sri Lanka
Proceedings The 10th World Construction Symposium | June 2022 645
Moreover, it is important to prevent the risk from happening. Therefore, avoidance of
risks is also important to learn. As well as, it is important to know how to maintain a risk
management portfolio and to do the risk evaluation quantitatively. This would help in
identifying the most crucial risk out of many at a time. With the development of the world,
there are many software’s that eases the work of people. Henceforth it is advantageous to
study the relevant software to handle the work in an easier manner. Also, learning the
causes of accidents and injuries that could occur within the site would be assist in
preventing them and the injuries. Figure 8 shows the recorded other topics that
respondents like to study.
Figure 8: Other topics respondents like to study
4.2.9 The Best Ways to Increase Risk Management Knowledge
Most of the professionals identified, the best way to gain knowledge about the risk
management as to face the situation and acquire it within experience. Although the
required knowledge cannot be gained without experience, the best solution can be
identified as increasing the learning hours by providing a separate course module.
Moreover, it is important to have practical sessions or workshops to gain clear idea as in
differentiating what to do and what to avoid in a risky situation. Also, it is best if risk
assessments could be done in every activity regarding every separate construction work
in the industry as in having case studies in road construction, piling sites, retaining wall
construction and water projects etc. Every project differs from one to one and henceforth
it is worthwhile to know about the risks that could occur in every situation. The proposed
ways of improving the knowledge on risk management is given in the Figure 9.
Figure 9: Ways of improving knowledge on risk management
D.H.N. Welikala, H.S. Jayasena and B.K.C. Perera
Proceedings The 10th World Construction Symposium | June 2022 646
5. CONCLUSION AND RECOMMENDATIONS
Because of complexity of the construction industry, abundance of risks can be occurred.
Thus, proper management of risk process is pompous for the success of the project. With
indication of limited risk management knowledge among Project Managers in Sri Lanka,
a research study was conducted to finding the status of risk management knowledge
among them.
The study finds that Sri Lankan Project Managers are not fully confident on their risk
management knowledge. They already are aware that their knowledge is limited, likely
to be due to limited learning they had on the subject. They currently learn the subject as
subsection of one of main subject modules either in the undergraduate degree or diploma.
The key areas that, they covered in those programmes are (a) Risk management planning,
(b) risk identification and (c) risk monitoring and controlling. Less attention was there for
(d) quantitative risk analysis, (e) qualitative risk analysis and (f) risk response planning.
However, these topics could have been covered using an alternative topic named as ‘risk
assessment’. The large majority of Project Managers have spent less than ten hours on
learning risk management. Accordingly, their lack of confidence on their own knowledge
on risk management can be rationalized. Further to those topics, Project Managers found
the use of risk management software also to be important. By not limiting the subjects to
taught modules, Project Managers expressed the interest on learning, through alternative
means such as case studies, workshops, and real-life experiences. The findings of the
study are consistent with previous findings, and these provide a more elaborated
explanation than the previous findings.
The findings indicate that the risk management of projects by Sri Lankan Project
Managers is not at the optimal level. Appropriate strategies should be devices to bridge
their knowledge gap for them to be able to perform well. If the full scope of knowledge
elements cannot be included in taught programmes, above-identified modes can be
utilized to impart such knowledge among them.
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Ghaleh, R.M.B., Pourrostam, T., Sharifloo, N.M., Sardround, J.M., and Safa, E., 2021. Improving the
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Abstract: Background: The construction industry plays a vital role in the Sri Lankan economy and it contributes 7.6% to Gross Domestic Product (GDP). The construction sector varies from individual houses to major infrastructures such as roads and multiple storied buildings. The research aims to identify the major risks associated with the Sri Lankan construction industry and to evaluate the practical measures that the various local construction industry players would take to manage and respond to those risks. A mixed-method of questionnaire and interviews was used to investigate the risks and the trend of risk management implementation in the Sri Lankan construction industry. Materials and Methods: In this study, a mixed-method of questionnaire and interviews was used to investigate the Sri Lankan construction industry.Using convenient sampling, data from 275 professionals in Sri Lankan Construction Industry was collected through a questionnaire. Descriptive and Correlational Analysis were used to analyze those data.Interviews were used as a follow-up procedure to further investigate the responses of surveys. Results: Financial Risk and Time risk are found to be the major risks in terms of occurrence and impacts. The construction stage has the highest level of risk in the construction project life cycle because it involves a high investment of money, time and effort. The most popular risk management tool used is brainstorming, which relies on highly subjective experiences and the most popular risk response method to handle the risk in the Sri Lankan construction industry is Risk Reduction. Conclusion: The awareness, knowledge of risk management is still at a relatively low level in the Sri Lankan construction industry therefore local players in the construction industry lag behind in implementing risk management in their practices. Effective risk management brings greater rewards to project performance by enhancing productivity. Key Word: Risk Identification, Risk Management, Risk Responses, Sri Lankan Construction industry, Risk Impact, Risk Occurrence. (3) (PDF) The Identification and Management of Major Risks in Sri Lankan Construction Industry. Available from: https://www.researchgate.net/publication/344831954_The_Identification_and_Management_of_Major_Risks_in_Sri_Lankan_Construction_Industry [accessed Nov 24 2020].
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