Managing risk in construction projects: A quantitative study

Risk is a complicated concept in a construction project is likely to occur during the lifecycle of a construction project and will have devastating consequences on a project's success. Projects carry many risks throughout the lifecycle and construction companies are not employing the standard practice of project risk management, which may drive the construction industries into financial losses. The purpose of this quantitative study was to explore the influence of the use of the five Standard Risk Management (SRM) approaches (Evaluation, Management, Contingency, Earned Value, and Top Down) on project success in the construction industry. Participants for this study were Project Managers from professional organizations including Project Management Institute (Houston chapter), and American Institute of Constructors. A one-way MANCOVA test was used to determine if relationships exist between dependent variables of SRM approach usage and an independent, grouping variable of project success, in consideration of years of project management experience as a covariate. Result of the statistical test failed to reject the null hypothesis because no statistically significant difference in the use of SRM approaches. The construction project managers who participated in the study used the SRM approaches on an average of 41–60 % of the time and this does not produce a good result. The researcher agrees and recommends the use of standard risk management approaches in construction area because these have been argued to improve performance and enhance project success in the construction sector. In consideration of replica study, the researcher recommends use of a more sensitive measure of success or a similar quantitative study with a much larger sample size that cut across construction companies in the United States will be needed to increase the generalizability of the findings.