Risk Management in Construction Projects
This chapter presented the background to the research area and sets discuss the problem formulation. The aim, objectives and research questions are stated and delimitations are described. Finally, the structure of the dissertation is outlined.
1.1.1 Definition of risk
Definition of risk is a state of uncertainty where some possible outcomes have an undesired effect or significant loss. Uncertainly is meaning that the lack of certainly due to limited knowledge that it is impossible to state the outcome exactly, perhaps, more than one possible outcome happens.
Risk concerns the deviation of one or more results of one or more future events from their expected value. Technically, the value of those results may be positive or negative. However, general usage tends to focus only on potential harm that may arise from a future event, which may accrue either from incurring a cost or by failing to attain some benefit.
(http://en.wikipedia.org/wiki/Risk) 5. Nov.2010
1.1.2 Description of risk management
Risk management is the discipline of identifying, monitoring and limiting risks.
In some cases, the acceptable risk may be near zero. Risks can come from accidents, natural causes and disasters as well as deliberate attacks from an adversary. Risk management applied in the field of construction currently, has been on the agenda for about 25 years. It has focused in the main on large-scale
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projects with different kinds of complexity related to them, such as Technology, international collaboration, geography or finance. (Hintze et al., 2004; Jaafari, 2001).
More recently, risk management has started to influence an increasing number of companies and not only the largest projects. In spite of this, the small projects in construction do not feature a great deal of systematic risk management (Azinim & Edum-Fotwe, 2006; Simu, 2006)
1.1.3 Principle of risk management