The global construction industry may be regarded as fast developing and considerably profitable. However, it frequently faces unwanted construction delays and cost overruns due to financial resources’ loss and necessary project optimization (Larsen, et al., 2015). As a matter of fact, there are multiple risk factors that may lead to project failures, and these factors traditionally vary in relation to the countries’ conditions (Bagaya & Song, 2016). The purpose of this paper is to review three scientific articles related to construction management in different countries and the solution of construction issues.
Introducing a New Risk Management Model to the Saudi Arabian Construction Industry
Algahtany, et al. (2016) dedicated their research to the issue of poor performance of construction projects that had occurred in Saudi Arabia for the past several decades. In the present day, Saudi Arabia may be regarded as the country of the Middle East with one of the fastest developing economies and the biggest public construction sector in this region. The infrastructure development of the country’s both rural and urban areas is currently experiencing considerably rapid growth. By 2020, the construction market of Saudi Arabia is expected to reach $610 billion (Algahtany, et al., 2016).
However, multiple studies indicate a highly disturbing issue of the country’s construction industry connected with inefficiencies, non-performance, or cost and time overruns. Time overrun caused by poor risk management practice is the most serious and common reason for public construction project failures. In Saudi Arabia, clients were traditionally not taken into consideration as risk factors in existing construction industry practices as risks were associated with the vendors’ incorrect performance. However, the inappropriate decision-making of clients due to a lack of experience and knowledge substantially contributes to project failures in the country.
On the basis of literature review and with the use of deductive analysis, the authors of this article proposed a new risk management model derived from the Performance Information Procurement System (PIPS) and the Information Measurement Theory (IMT) developed in the United States (Algahtany, et al., 2016). As a result, this model should meet the following conditions to reduce the number of project failures:
- Clients’ decision-making should be reduced;
- All expectations and decision-making should be evaluated and corrected by service experts who may explain the difference between expectations and reality in a comprehensive way;
- All parties should understand the initial conditions of a project and be responsible for their agreement as well;
- Authoritative experts should be responsible for outcomes and manage uncontrollable risks. If any party wants to change initial conditions, experts should identify and document new potential risks to avoid the project failure;
- Experts should be independent of managers.
The model was tested more than 1800 times in non-construction and construction projects in Saudi Arabia (Algahtany, et al., 2016). It demonstrated a substantial increase in efficiency by up to 40% and a considerable decrease in the owner’s required management by up to 80% (Algahtany, et al., 2016). The proposed model may be regarded as a shift in the paradigm of the construction industry of Saudi Arabia as accountability is provided by experts who have all the necessary skills, knowledge, and experience.
From a personal perspective, the authors conducted reliable research that may be characterized by comprehensiveness and high quality. The description of the risk related to the involvement of clients in the construction process and their ability to make wrong decisions is very detailed. At the same time, the results of this study and the proposed risk management model cannot be applied to the construction industry in another country without the additional investigation of its current state. Moreover, the authors did not provide examples of their model’s practical application.
Development of a Client-Based Risk Management Methodology for the Early Design Stage of Construction Processes: Applied to the KSA
Albogamy and Dawood (2015) conducted a study dedicated to the examination of project failures in the construction industry of the Kingdom of Saudi Arabia. Despite the fact that the issue of construction delays varies worldwide, it frequently occurs in the majority of countries. It goes without saying that the effective management of any construction project implies its time-sensitive delivery with the desired quality and within the allocated budget. At the same time, a considerable number of Saudi construction companies are currently facing project delays due to multiple factors that lead to time and cost overruns. According to recent reports, almost 70% of all projects in the public construction sector were not completed on time (Albogamy & Dawood, 2015). In general, clients and various risk factors associated with them have a significant impact on the project’s delivery from initial design to subsequent construction and the stage of operation.
The authors of this research did not limit it by the examination of potential causes of project delays connected with clients. They underlined the importance of the clients’ awareness concerning the construction process and proposed a conceptual framework on the basis of a risk management approach in order to assist in their understanding of risk factors. In addition, a new strategy aims to support the proactive actions of public clients to prevent project failures from their perspective.
The framework was designed on the basis of a literature review and a survey in the construction industry of Saudi Arabia. In general, the study combines both quantitative and qualitative approaches as it includes interviews and the questionnaire’s use (Albogamy & Dawood, 2015). With the use of the random sampling method, 98 responses were collected from 182 questionnaires distributed among construction professionals (Albogamy & Dawood, 2015). The model was developed “by integrating the analytical hierarchy process (AHP) and Monte Carlo simulation (MCS) underpinned within an @Risk program” and includes such components as includes the risk identification, risk analysis, and mitigation strategy (Albogamy & Dawood, 2015, p. 493).
According to the results of the research, the proposed model is highly efficient for the analysis of risk factors and risk mitigation, especially at the project’s early stage.
In general, the article may be defined as comprehensive and reliable. The authors provided a detailed description of their proposed client-oriented model and a theoretical explanation of its validity and expediency. In general, the findings of the study may be highly beneficial for the construction industry of Saudi Arabia as they may contribute to the reduction of project failures. Further research on the basis of this one may imply the examination of the model’s applicability in other countries. At the same time, the authors did not provide the results of its practical application.
Impacts of Change Management on Risk and Cost Management of a Construction Projects
In this article, Halou et al. (2019) examined the general management, change management, and risk management of construction projects through the example of the construction industry of Malaysia. The authors defined the construction industry’s management as “weak, insufficient, nebulous, backward and slow to react against changing conditions” (Halou, et al., 2019, p. 157).
It is additionally complicated due to insufficient information at the initial stages that make effective planning and decision-making unavailable. Construction changes are traditionally determined by several reasons that include variations, omissions, or errors in design, unforeseen site conditions, and the original scope’s vagueness. With the help of a quantitative approach, Halou et al. (2019) aimed to investigate these reasons that are directly connected with risk and cost management of the construction process.
The methodology of the study was based on the distribution of questionnaires among prevalently male, middle-aged, and randomly chosen construction specialists. From 105 distributed questionnaires, 90 questionnaires were returned. According to the research’s findings, all three types of construction management are interconnected. Design changes and changes related to contractors and clients were defined as the most common in change management. Concerning risk management, proper planning is key to the successful prevention of project failures.
The authors thoroughly described and analyzed the responses of construction specialists to make comprehensive and valid conclusions. However, the study is underpinned by data collection from individuals and cannot be regarded as completely objective. In addition, the authors focused on one region while their findings may be inapplicable in other countries due to the specific features of their construction industry.
The purpose of this paper was to review three scientific articles, and on the basis of this review, it is possible to conclude the following:
- All articles were dedicated to the investigation of the construction industry’s management.
- All articles underline specific issues of this industry connected with frequently unforeseeable conditions that lead to project failures.
- All articles underline the significance of proper planning.
- All articles did not provide the practical application of their findings.
- All articles may be highly beneficial for further research.
Albogamy, A., & Dawood, N. (2015). Development of a client-based risk management methodology for the early design stage of construction processes: Applied to the KSA. Engineering, Construction and Architectural Management, 22(5), 493-515.
Algahtany, M., Alhammadi, Y., & Kashiwagi, D. (2016). Introducing a new risk management model to the Saudi Arabian construction industry. Procedia Engineering, 145, 940 – 947.
Bagaya, O., & Song, J. (2016). Empirical study of factors influencing schedule delays of public construction projects in Burkina Faso. Journal of Management in Engineering, 32(5).
Halou, M. I. K., Samin, R., & Ahmad, M. (2019). Impacts of change management on risk and cost management of a construction projects. Journal of Project Management, 4, 157-164.
Larsen, J. K., Shen, G. Q. P., Lindhard, S. M., & Brunoe, T. D. (2015). Factors affecting schedule delay, cost overrun, and quality level in public construction projects. Journal of Management in Engineering, 32(1), 1-29.