ADDIS ABABA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

SCHOOL OF COMMERCE

Assessment of Project Risk Management Practices in Construction

of Electro-Mechanical Projects:
The Case of Jehoiachin Techno Plc
By

Michael Hailu
Advisor: Bahran Asrat (Dr.)
A Research Proposal

Addis Ababa, Ethiopia

January, 2020

Table of contents
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 Contents
List of tables and list of figures.......................................................................................................3

Acronyms/abbreviations..................................................................................................................4

ABSTRACT....................................................................................................................................5

CHAPTER 1: INTRODUCTION....................................................................................................6

1.1 Background of the study........................................................................................................6

1.2 Statement of the problem.......................................................................................................9

1.3Research Question.................................................................................................................11

1.4 Research objectives – general and specific..........................................................................12

1.4.1 General Objective..........................................................................................................12

1.4.2 Specific Objective.........................................................................................................12

1.5 Significance of the study......................................................................................................12

1.6 Scope of the study................................................................................................................13

1.7 Potential limitations of the study.........................................................................................13

1.8 Organization of study...........................................................................................................13

1.9 Definition of key terms........................................................................................................14

CHAPTER 2: REVIEW OF RELATED LITERATURE.............................................................15

2.1 Introduction..........................................................................................................................15

2.2 Meaning and nature of Project Risk Management in relation to construction industry......15

2.2.1 Introduction...................................................................................................................15

2.2.2 Project Risk and construction industry..........................................................................15

2.2.3 Project Risk Management practice in construction industry.........................................16

2.3 Importance of Project risk management in construction industry.......................................17

2.4 Project Risk Management Process in construction projects................................................19

2.4.1 Risk Management planning...........................................................................................19

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 2.4.2 Risk Identification.........................................................................................................20

2.4.3 Risk Analysis.................................................................................................................21

2.4.3.1 Qualitative Risk Analysis...........................................................................................22

2.4.3.2 Quantitative Risk Analysis.........................................................................................22

2.4.4 Risk Responses..............................................................................................................22

2.4.5 Monitoring and control risk...........................................................................................24

2.5 Impact of risk management on construction projects success.............................................25

2.6 Challenges of Project risk management in construction Industry........................................25

2.7 Review of Empirical Studies................................................................................................26

2.8 Conceptual Framework of the Study...................................................................................30

CHAPTER 3: RESEARCH METHODOLOGIES........................................................................31

3.1 Introduction..........................................................................................................................31

3.2 Research design....................................................................................................................32

3.3 Description of study variables..............................................................................................33

3.4 Description of study area and target population..................................................................34

3.5 Sampling technique and sample size...................................................................................34

3.6 Method of Data collection....................................................................................................34

3.7 Data analysis........................................................................................................................35

3.8 Reliability and validity analysis...........................................................................................36

References......................................................................................................................................36

Research schedule..........................................................................................................................42

Research Budget............................................................................................................................43

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List of tables and list of figures
Figure 2.1 Project risk events/conditions across knowledge areas----------------------------------17

Table 1: Common project risk identification tools and techniques used in construction industry

of developing countries -----------------------------------------------------------------------------------21

Table 2: Techniques of risk management response----------------------------------------------------23

Figure 2.8 Conceptual frame works on project risk management-----------------------------------22

Table 1: Tentative Research Schedule------------------------------------------------------------------28

Table 2: research budget----------------------------------------------------------------------------------29

Acronyms/abbreviations

CEM: Construction of Electro mechanical

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EEG: Ethio engineering Group

EM: Electro-Mechanical

EJBM: European Journal of Business and Management

FDRE: Federal democratic republic of Ethiopia

GERD: Grand Ethiopian Renaissance Dam

GTP: Growth and Transformation Plan

JTP: Jehoiachin Techno Plc

KAA: Kenya Airports Authority

MCIT: Ministry of Communication and Information Technology

MCR: Monitoring and controlling risk

METEC: Metals and Engineering Corporation

OCRLFDP: Online Content Regulatory Legal Framework Development Project

PM: project management

PMBOK: Project management body of knowledge

PRM: project Risk management

RA: Risk analysis

RI: Risk Identification

RM: Risk Management

RMP: Risk Management plan

RR: Risk Response

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 ABSTRACT
Risk management is a critical component to any successful engineering project. Understanding,
evaluating, and planning for risk properly, enables a project to stay on schedule and avoid
potential disaster. The main purpose of this research work is assessing project risk management
practice in Jehoiachin techno plc during its construction of electro-mechanical projects. The
study is a descriptive type, which is able to make use of both qualitative and quantitative
approaches as methodology to handle the research objective. Data are collected through closed
and open ended questionnaire; semi structured interview and document analysis. The
respondents comprise of project managers, Project teams, Operation staff, procurement team and
also the project commission. The quantitative data are going to be analyzed statistically using
Statistical Package for Social Sciences and therefore the qualitative data are going to be analyzed
by relating the results with literatures. Additionally, reliability and validity also will be taken in
to consideration. The main findings will be expected to reveal what seems the practice of risk
planning, risk identification, risk analysis which is qualitative and quantitative, risk response as
well as risk monitoring and controlling in JTP during its construction of electro-mechanical
projects. Finally, recommendations will be suggested based on the result of the research for
necessary changes in the organization to handle the project risk issues in different levels with
higher performance.

Key words: Risk, Risk Management, Electro-mechanical projects, Project Risk Management

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CHAPTER 1: INTRODUCTION
1.1 Background of the study
The construction products (roads, railways, airport, schools, hospitals, offices, shops, factories,
water supply, power systems, irrigation and agriculture systems; telecommunications and the
like) provide the necessary public infrastructure and private physical structures for many
productive activities such as services, commerce, utilities and other industries (Peter, 2015).
Thus construction activities can be considered as major source of economic growth, development
and economic activities.
According to Zichuan Huang (2020) Electro mechanical projects are an important part of
construction engineering, and the industries involved in it cover the whole daily life of people
including the installation of various EM equipment and machinery. To mention some of the EM
project works: installation of complete electrical systems for commercial, industrial and
residential complexes; Plumbing system (Drainage & Sanitary works, Recycling system, piping
works, Irrigation, etc.); Heating, ventilation & central air-conditioning for commercial &
industrial premises including district cooling systems; Firefighting system; communication and
automation control systems in industrial, civil and public works (Jamal, 2016) and (Zichuan,
2020). The construction activities of EM project cover all stages of equipment procurement,
installation, commissioning, trial operation and completion acceptance (Zichuan, 2020).

The word ‘risk’ has become a common and widely used part of today’s vocabulary, considering
personal circumstances (health, pensions, insurance, investments, etc.), society (terrorism,
economic performance, food safety, etc.), and also business (corporate governance, strategy,
business continuity, etc.). Many of the institutions that humanity has built as well, could be
viewed as a way to address uncertainty, including politics, religion, philosophy, technology,
laws, ethics, and morality (Hillson, 2006). According to ISO 31000 risk is the effect of
uncertainty on business objectives, in which the effect can be both positive or negative. ISO
31000 is an effort to acknowledge that business operations always contain a degree of
uncertainty, and therefore, risk. No matter what our business goals, there’s always a chance that
things might go wrong. Referring to PMBOK Guide – Sixth Edition (2017) all projects are risky
since they are unique undertakings with varying degrees of complexity that aim to deliver

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benefits. They do this in a context of constraints and assumptions, while responding to
stakeholder expectations that may be conflicting and changing. Organizations have to choose
taking project risk in a controlled and intentional manner in order to create value while balancing
risk and reward.
 Based on (PMI, 2013) a risk may have one or more causes and, if it occurs, it may have one or
more impacts. A cause maybe a given or potential requirement, assumption, constraint, or
condition that creates the possibility of negative or positive outcomes. According to PMBOK
(2017) overall Project risk is the effect of uncertainty on the project as a whole, arising from all
sources of uncertainty including individual risks, representing the exposure of stakeholders to the
implications of variations in project outcome, which, is both positive and negative.
ISO, 31000 describes Risk management as the identification, evaluation, and prioritization of
risks followed by coordinated and economical application of resources to minimize, monitor, and
control the probability or impact of unfortunate events or to maximize the realization of
opportunities.PMBOK (2017) and Karim (2012) also describes project risk management in a
similar way that is identifying, analyzing and assessing project risks early and systematically,
and developing plans for handling them; allocating responsibility to the party best placed to
manage risks, which may involve implementing new practices, procedures or systems or
negotiating suitable contractual arrangements; and ensuring that the costs incurred in reducing
risks are commensurate with the importance of the project and the risks involved. The purpose of
project risk management is to minimize the risks of not achieving the objectives of the project
and the stakeholders with an interest in it, and to identify and take advantage of opportunities
(Karim,2012).
There are uncountable EM projects, which have been transforming our world economically, from
time to time, EM engineering brings groundbreaking innovations year after year(Clr.es, 2019).
Studies indicates that engineering projects are exposed to lack or substandard RM system that
affects its fruitfulness in the performance of project management. And projects have been
implemented using reductionist approach which affects the quality of project management
(Alfredo, et al,2014). According to their study, risks are usually handled by extra money and
cushion time, instead of making analysis of risks proactively that can affect particular projects
Then, in most of the cases projects end with costs overrun and lately.

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 Preliminary recent research results in Chile have revealed that Construction Company that
didn’t practice Project risk management in their projects was exposed to negative result of their
performance (Wolbers, 2011; Howard et al, 2012). Additionally, a research work by Palma
(2007) on claims and contract disputes in a number of construction projects, had reflected the
occurrence of a number of risks that were not well analyzed or integrated by either parties,
customers or contractors, and that were one of the main causes of some of those claims and
disputes.
When we come to a developing country like Ethiopia, there are so many EM projects like Mega
Projects of Hydropower plant and Sugar factory development which are completed with cost
overrun, lately finished with poor quality and even there are suspended projects that are not yet
finished due to lack or poor project risk management system and other factors (Bacha et al.,
2020).Omo-Kuraz sugar development project is the showcase project of the state-owned by
Ethiopian Sugar Corporation under the country’s first five-year growth and transformation
plan launched nearly a decade ago. One of its central objectives was to meet increasing local
demand for sugar. It also aimed to become a net exporter of sweeteners, and to create hundreds
of thousands of jobs. This was to be achieved through the development of large-scale irrigated
sugarcane estates; however, Kuraz became just one example of the disappointing results of a
decade of state-led sugar industrialization (Benedikt, 2019).
Jehoiachin Techno Pvt. Ltd. Co. is one of the EM Projects contractor in Ethiopia which is a
young and energetic company established according to the Ethiopian laws governing the
establishment of private companies. It has emerged as a consummate high-tech solution provider
in the areas of electrical, electromechanical, industrial automation and instrumentation. The
company has been involving in supplying, installation, testing, and commissioning of EM
projects. The company has been engaging as sub-contractor in design and installation of the
mega projects like GERD Hydro power project and Sugar factories in Ethiopia as well as
Installation and commissioning of Heuft inspection technology automation products in Ethiopia
and other African countries like Kenya, Rwanda, and Tanzania etc.
The technical staffs of the company are proven to be well experienced in their respective areas
and have worked under different capacities in various governmental and non-governmental
organizations and industries. As they have been rendering industrial and engineering support
services for the last 15+ years, it has got savvy collection in the group. The management Team of
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the company is organized in a way that Managing Director and division managers all of whom
are Project managers, operation managers, qualified Engineers, Technologists and IT and other
professionals, thinking of creating a conducive environment to render high quality and prompt
services for its customers.
JTP has been facing several obstacles on its way to participating in the construction of different
EM projects, even though the company is organized with top qualified professionals. And this
has been causing Cost overrun, and time delay in those projects which forced the company for
extra cost. As I have tried to discuss in this section by referring to different sources, mishandling
risks or improper treating of risks in projects is one of the main cause of cost overrun, poor
quality and lately finished in projects. Therefore, evaluating the project risk management
methodology which is used by Jehoiachin techno plc is indispensable for identifying the weak
side of risk management practices and to generate the effective risk management system for the
successful completion of future projects.

1.2 Statement of the problem

The Previous studies in the PM in information technology and construction have shown that the
application of RM has affected project performance in terms of efficiency, performance
improvement and productivity enhancement. Moreover, the lack of PRM is one of the reasons
for failure of projects such as failure to comply with the deadlines of the project, increasing cost
and poor quality performance (European Journal of Business and Management, vol.9, 2017).
After the global financial crisis of 2008, the need for risk management arose because it was
necessary to minimize the losses in construction management (CM) firms. This was caused by a
decreased amount of orders in the Korean CM market, which intensified order competition
between companies. However, research results revealed that risks were not being systematically
managed owing to the absence of RM systems. Thus, it was concluded that it was necessary to
develop standard operating systems and implement RM systems in order to manage risks
effectively (Kyungmo, et al, 2017).
PRM aims to implement projects according to the approved budget, on time and within the
specified details. RM has been closely connected with PM collectively of the potential threats to
the project, which can result in disparities in achieving the pre-defined objectives and therefore
the success of the project (Holt, 2004). The traditional view of PRM emphasizes the importance

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of planning as one of its main processes and linked to project activities in an integrated way
throughout its life cycle (Dvir et al., 2002). Several models and frameworks for risk management
and managing project uncertainties have appeared as an attempt to better regulate and apply risk
and uncertainty management (Mills, Donald, 2001). Olsson (2008) argued that risk management
is critical to the success of the project as the organization is able to deal with various risks and
threats. According to the Roque Rabechini and Marly Monteiro (2013) the investigation result of
415 projects in different industrial sectors of Brazil shows that implementing RM system has a
substantial positive impact on success of projects. They also show a positive impact from the
presence of a risk manager on project success.

Emmanuel Rwagasana (2019) findings shows the construction Industry of Rwanda is facing
critical RM practices in construction projects due to the identification of the risk factors with
high impact and high chance for occurrence which fall under the criteria of logistics, physical,
construction, subcontractors and design related factors. According Emmanuel (2019) major
portion of construction companies in Rwanda, deal with risks mostly with expert systems which,
include software package, decision support system and computer-based analyses techniques,
direct judgment using experience and personal skills, transfer or sharing risk to/with other parts
and comparing analysis which means comparing similar projects with similar
conditions. However, Project risk monitors should seek more Risk analysis techniques that may
change the project teams. Peter Mwangi (2015) reveal on his study that construction industry in
Kenya is prone to several risks with contractors lacking knowledge about them and thus there
isn’t any RM procedure in place and where responded to it is in a haphazard way, in which its
consequence created over cost, time delay and poor quality of projects.
Ethiopian first Growth and Transportation Plan (2010/11-2014/15&) including EM projects was
significant investment in housing, transportation, dam construction, accompanied by industry
development, such as the construction of Industry Park, sugar factory construction, etc., in
different parts of the country, however, several projects failing either before completion and
delivery or after, and exposed to delay, poor quality and cost overrun (Bacha et al., 2020).Based
on national planning commission (2016) of FDRE,there were different challenges like
implementation capacity limitations, rent seeking and governance problems, inflation, imbalance
between aggregate supply and aggregate demand, poor infrastructure facility and financial
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resources limitations, during implementation of GTP I which made several projects fail to
achieve the schedule, budget and quality objectives. This shows there was not proper risk
management system included in GTP I which should have been proactive for the listed
challenges that should have made the project as much as possible to be completed on time,
within budget and with quality. Researches like Fertuna (2019) Imran (2017) and Yehualashet
(2019) shows that many construction and other project organizations in Ethiopia doesn’t practice
formal risk management standards or doesn’t practice proper risk management system, most of
risks are responded by their knowledge and experience, this has been its own impact on the cost,
quality and schedule of the projects.

Based on the report of JTP (2015 to 2019) Jehoiachin techno plc has been facing a problem of
completing projects with cost overrun and overschedule and even there were times the company
terminated the project without completed or after finished 80 to 90 percent and this initiates to
assess the RM practice of the company as lack of or improper RM system is one of the main
cause for failure of achieving project objectives. This research will investigate: whether RM is
included in the PM process of JTP during its construction of EM projects; It examines if formal
RM standards are applied; it will identify challenges available that restricts implementing of
standard risk management system in the company; it will also identify which steps of RM
procedures are included in the informal RM processes. Further, it identifies major risk factors
that JTP is facing during construction of EM projects.
1.3Research Question
The following questions will be attempted to answer by the research, for addressing the purpose
and objectives of the study.
What is the degree of practicing project risk management in JTP?
What techniques are used the company for assessing the level of occurrence and impact
of risks in projects?
What are the obstacles available in the company that restricts implementation of risk
management in practice?

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1.4 Research objectives – general and specific
1.4.1 General Objective
The overall objectives of this study are evaluating project risk management practice in
Jehoiachin Techno plc. It recommends also a suitable standard risk management system
for necessary changes in the organization to handle the project risk issues in different
levels with higher performance for the organization.
1.4.2 Specific Objective
The research aims to realize the specific objectives of the following points:
 To find the degree of practicing project risk management by JTP during the construction
of EM projects.
 To learn the risk management system methods and technique’s effectiveness used by the
organization for construction of EM projects.
 To identify challenges that restricts implementation of risk management in the company.
1.5 Significance of the study
The hugeness and complexity of EM projects leaves a lot of scope for various environmental,
socio-political and other unforeseen problems during conceptual phase, design, procurement,
execution, turnover and startup which, leads to time and cost overruns in projects and
compromise in quality (Nadeem et’ al, 2010: 16). For rectifying this problem and to attain
the objectives of the project in relation to quality, cost and time as well as safety and
environmental sustainability, there has to be real and standard risk management system (Zou
et al, 2005)
In Ethiopia a lot of EM Projects have been constructed in recent years and some are under
construction by local companies as contractor and sub-contractor, like Sigma engineering,
Mesfin Industrial, Jehoiachin Techno and Ethio-engineering Group (former name METEC)
etc. However, these projects have been confronting to many obstacles in different phases of
their project life cycle. Scope change, design problem, right of way problem, delay, and
quality problems are some of the challenges that will lead to additional cost and loss of value,
especially Mega projects like Sugar sectors, GERD and other EM projects have not been
completed within the time schedule and allocated budget (Mo UDC, 2012).

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 The study is expected to provide feasible recommendations and suggestions for improving
the project risk management system of JTP based on standard risk management system
which, can bring to high level of project execution. Hence the research is mainly worth for
JTP and similarly will have a contribution for other electro mechanical contractors.
1.6 Scope of the study
Investigating and reaching towards practice of PRM system in contractors involved in
construction of EM projects will be difficult to accomplish the research clearly and
completely on time. Considering availability of document to be analyzed and time bounded,
the scope of the research will be limited to extent of assessing, evaluating, analyzing,
describing and identifying project risk management practices in JTP. The study will be
realized through questionnaire, interviews, document analysis and is expected to provide
recommendations and suggestions for improving the project risk management system in the
company.
1.7 Potential limitations of the study
The expected potential limitations that can affect the conducting of the study are: Unavailability
of sufficient practical and empirical analysis on the project risk management practice of JTP; and
findings may not be as accurate as they should be because of methodological, conceptual and
instrumental issues, responses from respondents may not be accurate enough as it depends on
their willingness, level of awareness, personal conditions and others having a direct effect on the
preciseness of the findings.
1.8 Organization of study
The study is structured in five chapters. An introductory part which, contains like study back
ground, problem statement, research questions and study objective are allocated in chapter one.
Review of related literature which includes both empirical and theoretical literature will be
discussed in chapter two. Research design and methodology for obtaining the objectives of the
study is covered in in chapter three. Analyzing of findings and discussion part will be included in
chapter four. Conclusion, suggestions and recommendations based on the main findings of the
research will be discussed in chapter five.

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1.9 Definition of key terms
Construction Industry: is a composed of civil engineering construction which includes Houses,
apartments, offices, schools, roads, highways, bridges, and tunnels etc. And Electromechanical
projects construction such as factories, electrical systems, structure and machinery erection,
Plumbing system etc.
Hefut inspection system: is an automation system manufactured by Hefut Company, in
Germany in which installed in beverage, food and pharmaticual factories for inspection of
packaging instruments like bottling automatically.
Funding Identifies the funds needed to perform activities related to Project Risk Management. It
establishes protocols for the application of contingency and management reserves.
Methodology Defines the specific approaches, tools, and data sources that will be used to
perform risk management on the project.
Project—According to PMBOK, 6th edition (2017) a project is a temporary endeavor undertaken
to create a unique product, service, or result. In which a unique product that can be either a
component of another item, an enhancement or correction to an item, or a new end item in itself.
And a unique service is capability to perform a service. And a unique result refers such as an
outcome or document.
Project management—is the discipline of initiating, planning, executing, controlling, and
closing the work of a team to achieve specific goals and meet specific success criteria with
applying of knowledge, skills, tools, and techniques to project activities (PMI,2017).
Project life cycle— A project life cycle is the series of phases that a project passes through from
its start to its completion (PMBOK, 2017)
Risk: The likelihood that a project will fail to meet its objectives.
Risk strategy- describes the general approach to managing risk on this project.
Roles and responsibilities- Defines the lead, support, and risk management team members for
each type of activity described in the risk management plan, and clarifies their responsibilities.
Timing- Defines when and how often the Project Risk Management processes will be performed
throughout the project life cycle, and establishes risk management activities for inclusion into the
project schedule.

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Risk categories- Provide a means for grouping individual project risks. A common way to
structure risk categories is with a risk breakdown structure (RBS), which is a hierarchical
representation of potential sources of risk.

CHAPTER 2: REVIEW OF RELATED LITERATURE

2.1 Introduction
This chapter will be introducing and discussing the review of theoretical literature relating to
Project risk, Project risk management, and its importance in EM construction projects, and risk
management process. It provides also empirical literature reviews by critically looking at the
work that has been done by other researchers that is related to this study. Relevant literature
is presented and discussed under different sub-sections as outlined below.
2.2 Meaning and nature of Project Risk Management in relation to construction industry
2.2.1 Introduction
Risk management is about looking forward to identifying further opportunities for avoiding
losses which is significant to any business regardless of size, activity, or sector. Industries like
construction get into losses when they fail to identify and evaluate risk on time. Understanding
the nature of project risks and knowing how to handle them is essential in minimizing losses and
maximizing profitability (Sivagami et al, 2018). Thus, the meaning and nature of Project risks
and project risk management in relation to construction industry are reviewed from different
relevant works of literature as in sub-topics below.
2.2.2 Project Risk and construction industry
Daily life is full of dynamic situations involving unknown factors that can be either pleasant or
unpleasant. Basically, all human efforts and movements contain risks and uncertainties.
Theoretically, risk can be defined in variable ways. The risk with its, defined specifications can
be described as any possible deviation from the predefined target which is usually linked to
terms such as uncertainty, unknowingness, and unpredictability (Mulcahy, 2003). Risk is an
uncertain situation with potential unwilling consequences (Rescher, 1983). Williams et al.,
(1998) define risk as the possible variation in results and can be either positive or negative.
According to Dale et al (2005) Project risk is exposure to the consequences of uncertainty in
projects which, is the chance of something happening that will have an impact upon objectives,

15
this includes the possibility of loss or gain or variation from a desired or planned outcome.
Referring to the PMBOK (2017), project risks can be seen as individual and overall project risks,
in which individual project risk is an uncertain event or condition that, if it occurs, has a positive
or negative effect on one or more project objectives and overall project risk is the effect
of uncertainty on the project as a whole, arising from all sources of uncertainty including
individual risks, representing the exposure of stakeholders to the implications of variations in
project outcome, both positive and negative. Hence the definitions expose that the likelihood of
the occurrence of the risk and the severity of effects are considered to be two key parameters for
defining the risk and Project risk includes all risks that might impact the cost, schedule or quality
of the project.
Risks and uncertainties that can have a strong effect on all phases of projects, including the fea-
sibility analysis, design, planning, construction, and even the marketing and operating process,
affect all projects. Exposure to risk can arise from the possibility of loss or benefit in economic,
financial, or social terms, physical harm, damage, or delay (Cooper et al, 2005).  From the
construction point of view which is composed of civil engineering and electromechanical
projects, risks are usually considered to affect the key objectives of specific projects which are
time, cost, and quality (PMI, 2013). The construction industry is subject to greater risks
compared to other industries as a result of its construction practices that are considered to be
exceptional and have particular features such as long-term projects with the complex procedure;
financial intensity, abominable environments, and diverse organizational structure (Taylan et al,
2014). Often most construction industries are notorious for their bad credibility when faced with
risks, since projects don’t meet their cost goals and proposed deadlines, which in turn affects
each of their participants like contractors, public customers and others adversely (Tesfaye et al,
2016).
2.2.3 Project Risk Management practice in construction industry
Different scholars can define risk management in a variety of ways. PMBOK (2017) and
Pm4dev (2019) defines Project Risk Management as the processes to identify, analyze and
respond to risk throughout the project life cycle, with the goal to ensure the project will be able
to reach its objectives. According to Dale, et al (2005) Managing risk is an integral part of good
management, and fundamental to achieving good business and project outcomes. Systematic
identification, analysis and assessment of risk and dealing with the results contribute
16
significantly to the success of projects. However, poorly managed project risks may have wide-
ranging negative implications for the achievement of organizational objectives.
A good understanding of the risks makes it possible for the parties concerned to take action to
reduce their harmful impacts (Sayegh et al, 2015). The lack of appropriate project risk
management strategy has a lot of unpleasant effects on a project participant as a result of the lack
of steps to avoid the complexity and risk inherence in the project (Serpella, et al, 2014). Risk
identification and evaluation is important for identifying and assessing risks. In a construction
project, it is not possible to handle all the risks. Focusing on critical risks though is important.it
can be a waste of time and inefficient to attempt to classify all the risks (Sayegh et al, 2015).
According to the US National research council (2005) Identification and analysis of project risks
are required for effective risk management. One cannot manage risks if one does not characterize
them to know what they are, how likely they are, and what their impact might be.

According to Jarkas and Haupt (2015) most construction risk management decisions are based
on intuition, prior experience, and professional judgment of the manager .as a consequence of
ignorance and concerns about sustainability, the systematic methods available have not been
applied to construction projects activities. Construction projects are subject to a range of
unknown factors in developing countries (Ebrahimnejad et al, 2010). By incorporating successful
risk management in projects, various project problems are prevented (Tadayon et al, 2012).
Different publications on risk management are available online, as are hardcopies in books and
magazines, very little is understood in practice about risk management implementation
particularly in developing countries (Sayegh, 2014), and the risk management process has not
been adequately addressed (Tadayon et al, 2012). Based on Bowers and Kahorakian (2014)
study, very few facts are known about the effective implementation of risk management system
in most construction industries in developing countries. Because of the limited attention is given
to risk management, researchers in developing countries have been concentrating on encouraging
the use and implementing of risk management programs (Ghahramanzadeh, 2013).
2.3 Importance of Project risk management in construction industry
Risk Management is the process of identifying, analyzing and responding to risk factors
throughout the life of a project and in the best interests of its objectives. Proper risk management
implies control of possible future events and is proactive rather than reactive (Adarsh, 2016).
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According to Dieter (2013) Project risk management plays a key role in achieving the project's
objectives by identifying, analyzing and responding to risks that impact on them throughout the
life of a project. It plays a key role in selecting good projects, determining project scope and
developing realistic estimates, thereby contributing to a successful project outcome. Effective
risk management strategies allow identifying project’s strengths, weaknesses, opportunities
and threats by planning for unexpected events (Tara, 2019).
Project risk management is regarded as the least mature of all project management knowledge
areas (Schwalbe 2007). The reason is the high degree of interaction with all the other project
knowledge areas. It is impossible to identify every possible project risk within these project areas
because of the dynamic nature of projects (Dieter,2013). To demonstrate the diversity of possible
project risk events, Figure 2.1 is provided. It gives examples of possible negative risk conditions
that can be encountered in each of the project knowledge areas.

Figure 2.1 Project risk events/conditions across knowledge areas (source: Dieter, 2013)

The construction industry faces a higher level of risks and uncertainties compared to other
industries (Hiley, 2001). Hence a risk-free construction project is impossible (Loosemore, 2006).
These points to the importance of implementing systematic risk management in the construction
project to mitigate risks that occur. Thomas (2005) and PMI (2007) states that, RM in the sense
of construction project management is compressive and organized way of defining, assessing and
responding to threats in order to achieve the objectives of project. And according to Yazid
(2017), Aziz, et al (2018), and Yazid (2018) risk management is significant during decisions
18
making on construction projects. Moreover, Lee and Azlan (2012) realize PRM
as a means of creating project management and its standardization implies the need for it to be
enacted along with strategies adopted by companies throughout the construction process. In
addition, RM is one of the construction components that is important for avoiding unnecessary
losses and obtaining further benefits, which could improve the performance of project
internationally (Oehmen, et al, 2014).  
2.4 Project Risk Management Process in construction projects
The project risk management process applies across all project phases; there are different
requirements for risk management at different stages in the life of a project proposal. For large
projects, several risk analyses may be conducted, for example the concept development and
appraisal stages of a project proposal, to determine and evaluate alternative project strategies, the
construction of the approved project and for its operations (Dale.et al, 2005). A significant
improvement in the efficiency of construction project management can be accomplished by
making use of the RM process. The aim of the method of RM is not to eradicate all project risks
absolutely. Its objective is to establish an organized frame work that will make management
more efficient and effective in managing project risks, specially the most critical ones (Wang et
al, 2004). The authors states that, there are three stages in the methods of managing risk in the
construction industry which are risk identification, risk analysis and evaluation as well as risk
response.  However, PMBOK (2017) categorizes the RM process in five stages which are RMP,
RI, RA, RR, and RMC in which each is discussed as in the subtopics below.
2.4.1 Risk Management planning
It is important to make use of RM from the early stages of a project, where major decisions such
as choosing alignment and method of construction can be influenced (Eskesen et al, 2004). The
RMP is a component of the project management plan that describes how RM activities will be
structured and performed starting from the early stage of project life cycle. And may include risk
strategy, methodology, roles and responsibilities, funding, timing and risk categories (PMBOK,
2017). A credible project that fails because of faulty execution is definitely avoidable through
adequate attention to project and risk planning, in which the projects can succeed (Tom, 2015).
Michael (2016) states that RMPs are typically documents, that describe how risk management
will be structured and performed on the project, and are more valuable for complex projects like

19
construction. Based on PMBOK (2017) risk and project planning enables to distinguish among
and deal with three situations: projects that are demonstrably beyond the state of the art, planning
and other analysis data generally provide sufficient information to terminate the project or at
least to redirect the objective; for projects with unrealistic timing, resource, or other constraints,
risk and planning data provide us with a compelling basis for project negotiation, resulting in a
more plausible objective.
2.4.2 Risk Identification
After planning of risk, the first and perhaps most critical step in the RM process is risk
identification, as it seeks to define the source and nature of risks which involves the
identification of possible risk incident factors in the construction project and clarification of risk
responsibility (Wang, 2003). Carbone and Tippet (2004) indicated that risk identifying and
mitigating are key steps in successful project management. Referring to PMBOK Guide (2017)
identifying risk is the process of identifying and documenting the characteristics of overall
project risk sources. The key benefits of this process are the documentation of existing individual
project risks and the sources of overall project risk. It also gathers information so that the project
team can respond appropriately to identify risks.
There are many potential risks that could lead to the failure of a construction project. As Razz et
al (Raz et al, 2002) point out, too many project risks as undesirable events may lead to delays in
construction projects, excessive expenditure, unsatisfactory results of the project, or even total
failure. Therefore, failure to identify possible risks may lead to inadequacy in the entire method.
In essence, this can have a critical impact on the organization’s available capital. Risk
identification, though, allows for organizations that apply risk management to: identify the best
and most relevant feedback data; better understanding the relevance of the process; identify risks
and the impact they may have, and provide information for decision-makers (Rostami, 2016).

Risk identification process can be accomplished with the help of diverse tools and techniques,
which are Checklist, brainstorming, Interviews with experts, past experience, SWOT analysis,
and presumption analysis (Rostami, 2016). The first four techniques are popular which common
techniques especially in developing countries are, but in a particular, the last two techniques are
used to explore wider range of potential occurrence (Crnkovic et al, 2016). By referring to
Sayegh (2014), Tipili et al (2015), Choudhry et al (2012), and Smith (2009) the four common
20
risk identification tools and techniques in construction project that are mostly applied in
developing countries are summarized as shown below in table 1.

Table 1: Common project risk identification tools and techniques which used in construction
industry of developing countries.
S/N Tools and Description
techniques
1 This can be applicable for developing initial checklist, new management
Brainstorming
arrangement or projects associated with new risks. This can be helpful
in risk management workshop.
2 Monitoring related historical data from past projects can only be helpful
Past
in a limited number of conditions. These systems are most often
experience
constrained in terms of their accessibility or essential stored data.
3 Understand potential issues that may fail in previous projects and are,
therefore, very helpful in identifying risks. This allows the project team
Checklist to know the risks involved and to participate in the risk the identification
process, which will consequently lead to greater acceptance of any
means put in place to minimize the risks.
4 Interviewing experienced project participants, stakeholders, and subject
matter experts and analysis of historical data for projects that appear
Interview similar and sounds identical in past or current projects, risk analysis,
lessons learned or assessment of projects are other methods available for
obtaining feedback on the risks associated.

2.4.3 Risk Analysis

Risk analysis is known to be a mechanism incorporating the critical assessment of possible risks,
organizing them according to the relevance, and enabling the management team to determine the
appropriate ones (7). RA is the most critical procedure in RM. This is due to the fact that it
requires the evaluation of the probability of risk occurrence and its results on the goals of a
project (36). Its key objective is to measure risk by distinguishing unnecessary events, the
probability of the occurrence of unexpected events, and the extent of such events (37). According
to PMBOK (2017) and Choudhry et al (2012), two main approaches are widely used in risk
analysis; they are qualitative RA and quantitative RA in which each is discussed as following.
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2.4.3.1 Qualitative Risk Analysis
Qualitative risk assessment is the most useful part of the risk management process and it lays the
foundation for all the subsequent stages in that process, including the quantitative analyses that
are frequently required to define budgets and time-scales (Karim, 2012). Based on (PMBOK,
2017) Perform Qualitative Risk Analysis is the approach by which individual project threats
priotrized for further analysis or intervention by evaluating their likelihood of occurrence and
impact as well as other characteristics. The main benefit of this approach is that it focuses efforts
on high-priority risks. This process is carried out throughout the project.
2.4.3.2 Quantitative Risk Analysis

According to Karim (2012) the goal of the quantitative risk analysis approach is to numerically
evaluate the likelihood of each risk and its effect on project objectives, as well as the magnitude
of overall project risk. This approach uses different techniques and decision analysis to calculate
the probability of achieving a specific project objective, quantify the risk exposure for the
project, and determine the size of cost and schedule contingency reserves that may be needed,
identify risks requiring the most attention by quantifying their relative contribution to project risk
and identify realistic and achievable cost, schedule, or scope targets. And PMBOK (2017) states
that quantitative risk analysis is the practice of numerically assessing the cumulative impact of
individual project risks found and other sources of uncertainty on overall project goals. The
primary benefit of this approach is that it quantifies total exposure to project risk, and can also
provide additional quantitative risk data to facilitate the planning of risk response. Not every
project involves this process, but where it is used, it is carried out throughout the project.
2.4.4 Risk Responses
For RM two basic options are available: dealing with causes and dealing with consequences. In
both of these themes, however, there are variations. Dealing with the causes of project risk
incorporates risk prevention—eliminating the risk (avoidance), reducing its probability or
potential impact (mitigation), or making it a problem for someone else (transfer). RA means
modifying the project plan or strategy to eliminate the root cause of the risk from the project
(Tom, 2015). Wang et al (2004) states that, acceptable risk treatment mitigation measures must
be used once the project risks have been identified and evaluated. These mitigation measures are
primarily based on the existence and possible implications of the risk associated. The key goal is

22
to improve the degree of risk management, reduce the negative effect of risk, and minimize the
potential impact to the maximum extent possible. The measure becomes more effective when
one mitigation measure on a single risk is more controlled. Referring to Goh et al (2013), PMI
(2013), and Smith (2009) the six distinctive risk responses retention, reduction, control, sharing,
transfer, and avoidance are summarily discussed as shown in the table 2 below.
Table 2: Techniques of risk management response
S/N Techniques Description
1 Risk Rejection of the actions or risks to ensure that the risk does not continue
avoidance
2 Risk Shifts and moves, along with ownership, from one party to another, without
transfer
changing the total amount of risk or reducing the value of the sources of risk.
3 Risk Mainly achieved through a contractual method to develop a sense of
sharing collective responsibility among project stakeholders.
4 It requires taking into account the nature of a specific risk situation and
Risk
taking an intentional step to acknowledge the level of risk without engaging
retention
in special efforts to manage it.
5 Risk A strategy adopted to lower the risk's chances and consequences below the
reduction
appropriate threshold.    
6 Risk Does not attempt to avoid the source of the risk entirely, but takes measures
control
to minimize the present risk

In developing countries, preventive (avoidance) techniques and remedies are frequently taken for
risk-response methods (Iqbal et al, 2015; Kartam et al, 2001), and according to Wang and Chou
[(2003)] findings on their study, contractors usually use three means to transfer risk in the
construction of projects: through insurance to insurance companies, by modifying the terms and
conditions of the contract to the client or to a different party, through sub-contracting to sub-
contractor.  

2.4.5 Monitoring and control risk

Risk monitoring and control is described by PMBOK (2017) as the process of measuring the
execution of negotiated risk response plans, tracking identified risks, detecting and assessing new
risks, and evaluating the effectiveness of the risk process in the project life cycle. And the key
benefit of this process is that it enables project decisions to be based on current information about
overall project risk exposure and individual project risks. This process is performed throughout
23
the project. Risk management cannot be stopped with the initial preparation, according to Tom
(2015), successful project risk management relies on regular and disciplined reassessment of new
knowledge and status as the project continues. We can't know everything about the work at the
beginning, especially on longer projects. To keep the project going and efficient, periodic project
reviews are important.
After risks have been identified, assessed, and appropriate responses have been developed, those
findings must be put into action. Risk monitoring and control, as Berenger et al (2016) states,
involves the execution of the risk plan, which should be an important part of the project plan.
During monitoring and control, two main challenges are generally faced; the first is to bring the
risk plans into action and ensure that they are still successful. The second is the development of
substantial documents to help the process. Based on Lester (2007), risk control aims at managing
anomalies, mitigating risks, and increasing the value of the project. This stage of the RMP
manages risks in a way that successfully accomplishes project goals. RM is based on a proactive
approach to putting the right steps in place and constantly improving them, rather than a reactive
approach. Referring to Schatteman (2008) there are no ready-made solutions available to
mitigate risks. However, the following corrective steps can help to address the risks associated
with construction projects: modifying work scope plans and estimates to counter the risk
implications; regularly track risks and, if necessary, create alternate strategies to handle
predictable risks; and make decisions that are relevant. Keep those concerned aware of the
potential hazards.

2.5 Impact of risk management on construction projects success

The construction industry has changed dramatically over the past 20 years, according to Al-
Balqa (2013), with businesses facing more risk and uncertainty than ever before. Clients expect
more, most critically, they don't want surprises, and are more likely to participate in lawsuits
when things go wrong, making project managers in Jordan and around the world think more
about the link between these emerging threats and uncertainties and the performance of the
project they are managing and forcing them to ask. Does risk management contribute to the
success of the project? 
For any project, RM has become an integral part of the process of management. In reality, risk
management has put works collected in the last two decades of the 20th century at the center

24
stage of industry (Loose more et al., 2006). In reality (Akintoye et al, 2003), the circumstances in
the construction industry contributed to the implementation of risk management and analysis into
practice. If risk is practiced in a proper way, it can positively affect the working effectiveness of
the organizations. By doing such organization can achieve capital value of rareness and capital
value of limitability via which the firm can build stronger competitive advantage by developing,
maintaining and retaining core competencies; According to (Fewings, 2005) application of PM
techniques such as risk and value management effectively are thought as key supporting
processes and to add to them quality, cost, time and change control; all together generate an
integrated approach to the project success.
2.6 Challenges of Project risk management in construction Industry
The integration of operational risk management system is a complex process subject to certain
situations and affected by multiple factors. The difficulty of explaining how effective it is for the
company is one of the main challenges as a consequence of still uncertain boundary of the
impact of risk management over other actions taken by the organization (Adina et al, 2017).
Based on Ciocoiu (2015) and Fraser et al (2016) the lack of risk management expertise and
education continues to be a major obstacle to the implementation of risk management. It is
important to involve workers by holding well-structured forums and training sessions in order to
effectively incorporate risk management. This comprises: basic risk management measures, risk
assessment techniques, and procedures, best practice in the field, clear regulatory criteria, safety
regulations, risk management targets, etc. According to Durenberger et al (2014) the decision to
select an appropriate RM framework from the multitude available frameworks is extremely
difficult as it must shape with organizational characteristics. Absence of a common risk language
in the staff of organization (Renault et al, 2016), the determination of an appropriate technique or
combination of techniques (Durenberger et al, 2016), creation of a risk function, that could be
directed by an existing senior executive (Fraser et al, 2016), and lack of financial resources or
lack of support and involvement from management (Ciocoiu, 2015; Renault et al, 2016) are also
some of the main challenges in implementing project risk management.

The success of construction projects requires the effective integration of risk management
practices (Banaitiene et al., 2011). However, since construction projects run in an increasingly
dynamic and diverse society compounded by complex relationships with owners, designers,
25
contractors, subcontractors, suppliers, government authorities, the public, and stakeholders
(Hwang, et al, 2014), there is always a limitation on the successful implementation of RM in the
construction industry, especially in developing countries due to human/organizational resistance
to change, managers' understanding of RM process techniques, lack of computing resources and
assistance, and lack of middle and top management support. In the Chinese construction
industry, RM activities are very limited because of the challenges such as : the lack of
knowledge retention and communication has always been a serious problem for the construction
industry; contractors do not have a practical attitude to construction risks emerging from the
centrally organized economy system; fragmentation of regulatory authorities and uncertainty in
legal drafting and lacking relevant legislation for the implementation of the construction
insurance system (Junying et al,2007) .Hence lack of awareness and knowledge of RM system,
lack of support from the concerned stakeholders, lack of interaction among different
parties(clients, contractors, insurers, and suppliers), poor integration between risk management
and other key processes are among the main challenges for implementing RM system in
construction industry.

2.7 Review of Empirical Studies

There are several international and local studies which conducted research on the area of project
RM practice in which, focused on construction industry (combined civil and electromechanical
engineering projects) and information technology projects. This section will discuss the
empirical review of some researches related to the objective of this study.
Hilda Muthoni (2018) made his research on risk management practices and performance of
construction projects in Nairobi city county government, Kenya. The objective of his study was
to investigate the influence of risks management practices on the performance of construction
projects in Kenya. His questionnaire targeted a total population of 380, comprising of 100
contractors, 80 consultants/specialists, and 200 project engineers who are active in construction
projects in Nairobi City and the sample size of the study was 190, which is 50 % of the 308
participants were chosen using a random sampling process. With the aid of SPSS tools, the data
collected was quantitatively analyzed using descriptive and inferential statistics, and multiple
linear regression analysis was used to assess the influence of essential risks on the performance
of construction projects.

26
As per the research results of Muthoni (2018) study: 92 % of respondents confirmed that design
risk management practices had a substantial effect on project success in the construction sector
of the city of Nairobi, suggesting that there was a positive relationship between design risk
management practices and project performance. The project costs, project design, land disputes
and construction were the most common risk management practices used by the government of
Nairobi City County on construction projects.RM practices are implemented based on the
complexity inherent in the design, execution and assessment of the project process. However,
risk mitigation should be done after every review of the project life cycle.  
Most contractors do not have a specified project scope and implementation plan according to
Muthoni (2018) findings, which means that the project goals are not known, the planned
deliverables are not identified and there is no specific implementation procedure available. In
addition, the contractors fail due to lack of a project schedule, proper engineering method,
procurement plan, site assessment plan, design basis, and, above all, lack of measured risk due to
the lack of proper project management skills and procedures, as per his finding most construction
projects are often exposed to risks arising either from unforeseen circumstances or natural
hazards that give space for incomplete or failed construction projects. The author showed that the
lack of monitoring of contractors and the breakdown of communications between government
and contracts was also a major obstacle to the completion of construction projects in Nairobi
City.
Mohammed Hassan (2018) conducted a study on risk management in relation to project success
on the construction industry in UAE. The study was conducted with aim to test the effect of the
RM in project success in which by investigating the literature in project success, project failure
and risk management; identifying the relation between project success and risk management; and
reviewing the project risk management models and choosing the model which leads to project
success. The data was collected from 119 respondents in which 64% project
managers,12%project engineers,10%projects directors,5% program managers and 5% planning
and construction managers in Dubai. The author used correlation and Linear regression test in
SPSS tools for analyzing the questionnaire responses.
The researcher’s discussion on the relation of the three variables which are risk identification,
risk analyzing and risk response with the project success in construction industry of Dubai
indicates that the three variables have positive but weak correlation with project success. The
27
author didn’t put clear reason for the weak correlation of the dependent and independent
variables on his discussion or conclusion, instead he generally states that, check lists,
documentation and lessons learned from the similar project, interview, and brainstorming are
tools that we have to use in risk identification and he thought of respondents are not aware about
the tools and software that are used in the risk assessment which leads to weak relationship
between risk assessment and project success. However, his study indicates that there is a
significant relationship between project success and risk management process, and this
relationship was found positive the more the risk management process application the more the
project success.
Referring to Bernard (2012) the study was on project risk management practices and success of
capital projects in Kenya. The objectives of the research were to establish the influence of project
risk management practices on the success of projects by establishing the extent of application of
project risk management practices in projects at the KAA and determining the relationship
between project risk management practices and the success of capital projects implemented by
the KAA. The researcher had distributed 44 questionnaires and 86% of it successfully completed
and collected from respondents.27 respondents were from completed projects and 11 from
projects were implemented as June 2012.The researcher used descriptive statistics to analyze
the data by way of frequencies, percentages, means, variance, standard deviation and correlation
analysis as well as multiple regression analysis to determine the relationship between the project
success and four variable factors for testing risk management and project success .

Based on the researcher findings the Correlation between risk management practice and three dimensions
of project success (budget/cost, time/schedule and quality) in Kenya indicates that, implementing RI has
the highest positive correlation with budget of 0.413 and tools and techniques has the least positive
correlation with quality of 0.024, risk response and monitoring with budget has positive correlation of
0.402.According to his analysis results most projects had exceeded the budgeted costs with a mean and
variance of 40.73 and 5.34 respectively and most projects which exceeded the budget were within the
15% variation of quantities limit. Most projects were also completed behind schedule with a mean of
17.85 and variance of 2.86 as compared to those within time or ahead of schedule. Most of these projects
which were ahead of schedule majorly consisted of ongoing projects., most projects also did not meet
quality requirements in terms of meeting technical and customer specifications.

28
The researcher concluded from his study that, even though, most projects had applied risk
management practices such as risk identification and risk response and monitoring, most of the
projects recorded delays, project budget overruns and complaints from users and customers
implying that risk management should be viewed as a project management process with the five
variables consistently applied. And based on the study result, risk management practices
(independent variables) if consistently applied on a project increases the rate of the project
success (dependent variable).
Yehualashet (2019) conveyed a research of Project Risk Management Practice in Ministry of
Communication and Information Technology in case of Online Content Regulatory Legal
Framework Development Project (OCRLFDP). His study conducted by aiming to project risk
management practices of MCIT OCRLFDP that is aimed mainly to evaluate the practice of risk
planning, risk identification, risk analysis, risk response and risk monitoring and control. the
researcher collected the data to be analyzed from 27 project team members who directly
participate in planning, initiating, overseeing and facilitating the overall execution of the
organization's projects. He evaluated the gathered data by Likert and ordinal scales and analyzed
quantitatively by descriptive statistics in which percentages and frequencies were found using the
SPSS.
The results of the data analysis by the researcher shows that the project teams of the ministry had
no profound risk management expertise. There was no recorded risk registry from previous
projects to support the risk assessment and review of the project team; the policy and system of
the company were incompetent to direct the project team to go through the RM process.
Regarding the RP, RI, RA, RR and monitoring risk, his findings indicates that the functions and
obligations of the different stakeholders involved in risk management have not been clearly
defined and RM methodology for management, including instruments and data sources, which
can be used effectively in the RM process was not developed. There has been no systematic
approach to risk identification and the definition of the risks with cause and effect lacks
clarification as well. The researcher also found out that, factual evidence was not used to carry
out risk assessments and risks were not assessed on the basis of financial effects. Moreover, after
threats were qualitatively evaluated, project records were not revised. In addition, the risk
response procedure was mainly mitigated, followed by transition and acceptance. Following this

29
he concluded that the ministry used the risk management process poorly and this leads to low
performance of project activity.
These empirical studies imply that how the Project risk management practice which are early
planning of risks, identification risk systematically, proper risk analysis, risk response with
proper prioritization and monitoring risks throughout the project life cycle is closely related to
project performance to accomplish the project within budget, on time and good quality. In an
organization, especially in the construction industry, risk management is critical because a
company cannot identify its priorities for the future without it. If an organization defines targets
without taking the risks into account, once any of these risks get there, chances are that they will
lose direction.
2.8 Conceptual Framework of the Study
The study will assess project risk management practice in construction of EM projects. Hence
the conceptual framework for this study will be derived from different literature reviews related
to project risk management. Since the aim of project risk management is to advance the
probability and influence of Positive events and to reduce the probability and influence of
negative events in the project, literatures reviewed from PMBOK (2017), Karim (2012) and Tom
(2015) is a better source of idea. The process of RMP, RI, RI, RP and MCR that affect the level
of project risk management practice are included in the standard way of project risk management
as it is shown in figure 2.2 which is the conceptual frame work of the study.
Independent variables Dependent variables

Plan Risk Management

Identify Risks

Risk Analysis

Project Risk Management

Risk Response
30

Monitor and control Risks

 Figure 2.2 Conceptual frame works on project risk management

CHAPTER 3: RESEARCH METHODOLOGIES

3.1 Introduction
The overall methodology used to conduct this research study is outlined in this chapter. This
chapter discusses the research design, description of study variables, study area and population
under consideration, Sampling technique and sample size, the methods of data collection, the
methods of data analysis, reliability and validity analysis, as well as ethical consideration that the
researcher employed in the study.
3.2 Research design
Research design is the approach for collecting, evaluating, interpreting and reporting data in
thesis work (Creswell et al, 2007). It is framework for planning a given research and answering
the research questions (Shona, 2019). In order to achieve the objective of the study, an
appropriate choice of research design is required to accurately and systematically address the
research problem. The main purpose of the study is to assess the degree to which RM has been
practiced in JTP, in which it requires identifying characteristics, frequencies, trends, and
categorizing of the population. Hence a descriptive type research design is used, as it is intended
to provide a picture of a situation, person or event, or to demonstrate how things are related to
each other and how they happen naturally (Blumberg et al, 2005).
The study aims to focus on the extent of project RM practice in a single organization which
needs an understanding of a complex issue through detailed contextual analysis of a limited
number of events or conditions and their relationships. A case study research design is used in
this study as this approach is structured to systematically and reliably define of a specific
population in a systematic and precise manner and concentrate on a specific group or a small
group of recognizable subjects with similar observable characteristics. And the purpose of the

31
case study is also to obtain in-depth information about a specific entity or a small group of
subjects (Mugenda et al, 2003).
Time Horizons, Saunders et al. (2009) defined research time horizon divided into two categories
and are longitudinal and cross-sectional time frames, cross-sectional is the analysis at a specific
time of a particular phenomenon, which can at a single point in time compare various population
groups. While researchers perform many studies of the same subjects over a period of time in the
longitudinal study, they may last for several years. According to Yin (1998), in a fixed
timeframe, cross-sectional study questions will address existing problems. Based on Yin (1998),
in a fixed time frame, cross-sectional study questions will address existing problems. A cross-
sectional study will be suitable, as this research is an attempt to evaluate the extent of practicing
project RM in the organization at snapshot time horizon.
The data collection method used in this study is organized in closed and open ended
questionnaire as well as open-ended interview. Qualitative research includes gathering and
evaluating non-numerical data to understand ideas, thoughts, or perceptions. It can be used to
gather in-depth information about a problem (Saunders et al, 2009) which uses to analyze the
data collected by open-ended questionnaires and interviews in this study. Objective measures
and statistical, mathematical, or numerical interpretation of data obtained by closed-ended
questionnaires are emphasized through quantitative methods (Saunders et al, 2009). Thus this
study employs mixed research approach, both qualitative and quantitative methods.
3.3 Description of study variables
There are so many variables in research that it could be impossible or extremely difficult to
account for all of them due to the fact that what can be considered a variable in one study may
not necessarily be a variable in another study, a variable is an object, event, idea, feeling, time
period, or any other type of category we are trying to measure (Sitwe, 2011). There are two
major types of variables-independent and dependent. The descriptive independent variables
apply in this study are, RMP, RI, RA, RR and MCR.and Risk management is the dependent
variable of this research. It is measured with the aid of risk management practices and, in
particular, their level of use within the organization.
Project risk Management is one of the ten (10) knowledge areas of project management. And it
includes the processes of carrying out RMP, RI, RA, RR and MCR on a project. The aim of

32
PRM is to advance the probability and influence of Positive events and to reduce the probability
and influence of negative events in the project (PMI, 2017).
RMP is a component of the project management plan that describes how risk
management activities will be structured and performed (PMI, 2017).
RI Risks is the process of identifying individual project risks as well as sources of overall project
risk, and documenting their characteristics (PMI, 2017)
RA qualitative Risk Analysis is the process of prioritizing individual project risks for further
analysis or action by assessing their probability of occurrence and impact as well as other
characteristics, and the quantitative risk analysis process aims to analyze numerically the
probability of each risk and its consequence on project objectives, as well as the extent of overall
project risk (PMI, 2017).
RR is the process of developing options, selecting strategies, and agreeing on actions to address
overall project risk exposure, as well as to treat individual project risks. The key benefit of this
process is that it ensures that agreed-upon risk responses are executed as planned in order to
address overall project risk exposure, minimize individual project threats, and maximize
individual project opportunities (PMI, 2017).
MCR is the process of monitoring the implementation of agreed-upon risk response plans,
tracking identified risks, identifying and analyzing new risks, and evaluating risk process
effectiveness throughout the project. (PMI, 2017)
3.4 Description of study area and target population
The study of project risk management practice will be conducted on the construction of EM
projects which have been constructed by JTP. JTP has been participating in Design, supplying,
installation, testing, and commissioning of different EM and Automation projects including
mega projects Like GERD, Sugar factory project and Heuft inspection system automation
machinery as contractor and sub-contractor for the last 15 years and currently is also
participating as EM sub-contractor in GERD from the current EM main contractor Voith which,
is a Chinese company. The study will be limited to the assessment of risk management practice
used by JTP. The target population of the study will be all professionals including project
managers, senior project engineers, designers, marketing manager and supporting staffs that have
been responsible in planning, design, procurement, executing, managing, and supporting the

33
overall project’s implementation of the organization and the target population are expected to be
a total of 28 in number.
3.5 Sampling technique and sample size
The main aim of the research is to evaluate the PRM practice in JTP; census method is suitable
for this study as the population of this study is small. Since census method is the method of
statistical enumeration where all members of the population are studied that is the collection and
analysis of data from every possible case or group member in a population (Saunders et al,
2009).Thus all of the 28 population will be carefully chosen according to their competency and
relation they have to the study requirement to fill a questionnaire. And 3 project Managers, 1
Engineering manager and 1 operations manager will be selected no-randomly for interview.
3.6 Method of Data collection
For achieving the purpose of the study both primary and secondary data will be collected.
Questionnaire and interview are the instruments used for collecting the primary data (Cohen,
2013) whereas the source of secondary data will be from existing research papers, journals and
publication, books and websites. The questionnaire will be dispersed by email and in person. The
researcher will conduct an interview with the selected sample and analysis of the available
document, after completion of data collection through questionnaire to complete the data
required for analyzing. The questionnaire in which designed related studies and literature is the
main data collection instrument. Interview and document analysis will triangulate the
information gathered by questionnaire. All the independent variables RP, RI, RA, RR and MCR
which are identified for this study will be addressed through questionnaire instruments and the
interview also tries to address those variables for collect more elicit data about the research
problem with open ended questions.
3.7 Data analysis
Given the descriptive nature of this study, data collected are analyzed using the frequency and
percentage of respondents. Charts and graphs are used to view and rate the respondent's answer
table. According to Greener (2008), the data analysis method includes preparing the data for
analysis, evaluating the data and eventually interpreting the data in most forms of research
studies. Thus, the content analysis of data involves the presentation of data or respondent
responses by table form or graph form then data is analyzed by frequency percentage and

34
secondary data information supports the analysis. The data from open questions are then
analyzed. The analyzed data would eventually be interpreted in results.
As Creswell (2003) says, quantitative data analysis and qualitative data interpretation combine to
search for a correlation between the findings. This research consists of numerical information
(ordinal data) collected by a questionnaire instrument, which is used to explain and interpret the
data collected by the descriptive data analysis process. In addition, since the data to be collected
is measuring on an ordinary scale (measured on 1 to 5 points) and includes close type queries
(coded for 1 for "yes" and 0 for "no"), it will be collected for data presentation by using a
statistic SPSS package. In order to accurately reflect and explain research results and findings,
frequency, percentages and mean will be applied for tabular presentations as part of the
descriptive approach. Addiotnaly, narrative analysis method of qualitative data analysis is used
to analyze content from interviews of respondents, which is fundamentally interpretative i.e. the
researcher interpreted the qualitative data. Thus, data collected from interview are interpreted
qualitatively.
3.8 Reliability and validity analysis
Reliability and validity are the two most critical and basic characteristics used for assessing
measurement instruments or tools that are used in research for effective study (Mohajan, 2017).
Validity examines what steps an instrument is taking and how effectively it is doing so and
reliability relates to the confidence one may have in the obtained data from the use of an
instrument. And based on Altheide et al (1994) validity is represented the truthfulness of findings
whereas; reliability is referred to the stability of findings.

Reliability testing is one of the critical factors for conducting research, in which, the accuracy
between the questions is tested (Stainton et al., 2010). According to ATS (2012) Cronbach's
alpha value is used to measure the internal consistency that can be achieved in the SPSS by
conducting the reliability test. For all the questions, the reliability test will be carried out. The
alpha of the Cronbach should be above 0.9 to achieve excellent reliability. It can be considered
good and appropriate for conducting data analysis on the data collected from the questionnaire if
the value is more than 0.8. The alpha of Cronbach above 0.7 is appropriate and 0.5 - 0.7 is
deemed to be bad, ultimately Cronbach below 0.5 is not acceptable for further test as the data
obtained are not reliable (Bonett et al, 2015). If the alpha value of Cronbach is below 0.7, then it

35
is suggested to use the SPSS option to raise the SPSS value by recommending that some of the
questions be removed.
3.9 Ethical consideration
During and after the research has been completed, ethical problems should be addressed in every
kind of research study. The study would take ethical issues of data collection and usage into
account, and examine them in a responsible manner. Participants will be notified of the purpose
of the study and the potential effects of their involvement in the research. In general, any
information that might affect their decision to participate in the research will be given to the
participant. Participants should be volunteers and, without being coerced, participate. Test data
will be secured and the respondents' confidentiality will be maintained.

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Research schedule
Table 1: Tentative Research Schedule (can be changed based on the advisor’s comment)
Research phase Objectives Duration
1. Background  Meet with Advisor for initial discussion 11th
research and  Conduct a more extensive review of relevant literature November
literature review  Refine the research questions

 Develop a theoretical framework

2. Research  Design questionnaires 23th
design planning  Identify online and offline channels for recruiting December
participants

 Finalize sampling methods and data analysis methods

3. Data collection  Recruit participants and send out questionnaires 10th January
and preparation  Conduct semi-structured interviews with selected
participants

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  Transcribe and code interviews and clean survey data
4. Data analysis  Statistically analyze survey data 5th
 Conduct thematic analysis of interview transcripts February

 Draft the results and discussion chapters

5. Writing  Complete a full thesis draft 25th
February
 Meet with Advisor to discuss feedback and revisions
6. Revision  Redraft based on feedback 10th
 Get Advisor approval for final draft March
 Proof read

 Print, bind and submit

Research Budget
Table 2: budget needed for the project work
Project activity Description Cost in Birr
Internet Expense for browsing website 1000 ETB
studies, learning in videos etc.
Data Collection & Analysis Printing questionnaire paper,
assistant payment in
distribution and some tea 2000ETB
coffee costs during interview
and other process.
Printing cost Printing and binding the final 700 ETB
paper
Equipment/IT/Software For editing, all equipment, IT 1300 ETB
costs, graphs etc. And for data
analysis
Total expected cost 5000 ETB

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