A review of the application of risk assessment procedures in construction management and research

This paper reviews the developing approaches to risk assessment in construction management and research. In addition to the well known applications in financial investment and contractual matters, it is being employed increasingly in safety hazard analysis and in quality assessment. The author uses examples from his experience in these latter applications to cast doubt on the objectivity and validity of much risk assessment. The social aspects of risk, and the subjectivity inherent in the statistical probabilities used in risk assessment appear to have been ignored in much of the literature on the subject. A debatable certainty is implied in the reverence accorded to the results of mathematical and economic risk analysis, which is often incompatible with the reality of construction as a chaotic system. It is argued that highly quantitative methods of risk assessment are often inappropriate in construction. The use of deterministic solutions to stochastic problems provides the impression of "garbage in, garbage out"! Much has been written about the development of tools for numerical analysis of data, but there has been limited debate about the accuracy of this raw data itself. The author suggests that a more pragmatic, heuristic approach to risk assessment in practice and research would bring benefit to both, especially if founded upon well-documented case histories and shared experiences.