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Risk Management in Construction Project Networks

Risk Management in Construction Project Networks

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Published by: jkwt1027 on Mar 20, 2010
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The reliability problem can be divided into two parts; one part is due to the
Finnish construction industry’s special characteristics and of how local
business practices and relationships affect the interviewees’ answers. The
Finnish construction industry seems to be facing the same problems and
issues as the construction industry in other countries, same relationships
come to the surface whether the study has conducted in Hong Kong, the
UK or Sweden. Although the empirical material is gathered from Finnish
construction sites, I would see that results’ applicability could be analysed
in the international context, especially in countries where the business
environment is similar.

The latter question is harder to answer as an outsider of this industry. I
was left with the feeling that, since respondents said they were unwilling
to take unpleasant risk related things to public forums, it might be that
they are unwilling to inform a researcher of such things. In addition, this
study was initiated by the main contractor companies, which may lead
subcontractors to be careful of what they say, as no one was willing to risk
their business reputation. To diminish this risk I decided not to
electronically record the interviews since, in my mind, that would have
had significant effect on the answers.

The reliability of the interviews is further questioned, because all of the
interviewees were chosen by the main contractors, and interviews were
held in part, at the main contractors’ site offices. The other problem relates
to the interviewees’ understanding and definition of risk that varied. Most
often risk was seen as their own company’s financial risk, safety
management or quality assurance. And risk was always negative.
Suggestion to consider the risk as positive opportunity resulted in
confusion and disbelief that anything could actually go better than
planned. However, results and recommendations here are in line with the
previous studies, which, in my opinion, provide a reason to expect that
these results are reliable.

Conclusions and Discussion

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Generalisability as a whole depends on the fact that networks are always
situation-specific, and every actor in a network sees the network
differently. In project networks this is more apparent, since project
participants are constantly changing from project to project. Still, though
construction projects are unique form any other projects, the processes are
not, I would say that since the industry’s business practices and working
methods are so commonly uniform, the behaviour of an actor does not
depend on the surrounding actors, since all actors in the Finnish
construction industry share the same working methods and business
practices. Common working methods and business practices are well
internalised that suggests the results could be generalised at least to the
construction sector. Theoretically, applying network study results in the
project environment is another thing to consider, since earlier network
studies have focused on permanent networks, not temporary ones.

6.5Suggestions for Future Research

As I have mentioned before, there exists an extensive literature from risk
management and the network governance. Theoretical models, tools and
techniques now need more practical examples and I’m curious about the
possibilities of implementing these new co-operational management
methods. In network theory, to study how project temporality affects the
network governance research and the relationships and their evolution
would be extremely important. Then to what extent different industries
share business practices (macroculture) in a way that any actor can join the
project without any significant implications to the network practices? Now
it seems that at least in the construction industry a certain level
macroculture exists.

In the risk management field, first of all, I would develop more concrete
methods for co-operation. Since this study gives only conditions and state
towards which to move, more practical tools are needed in order to make
the co-operative risk management model process concrete.

Conclusions and Discussion

- 105 -

Secondly, assessments of the concrete, financial benefits that co-operation
can provide should be provided. I believe that financial gains will follow if
more co-operative means are introduced, but that benefits are realised
increasingly only in the long-term.

Thirdly, as many authors have emphasised, the real challenge is to form
the kind of relationships and risk sharing methods that equally strengthen
all parties182

. How should risks and rewards be allocated to create a shared

financial goal for all project actors?


Smith Ring, P., Van de Ven, A.H., 1994, Hallikas, J., Karvonen, I., Pulkkinen, U.,
Virolainen, V-M., Tuominen, M., 2004

Final Remarks

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