Pm in Construction Essay

Construction projects are initiated in complex and dynamic environments resulting in circumstances of high uncertainty and risk, which are compounded by demanding time constraints. Construction industry has changed significantly over the past several years. It is an industry driven primarily by private investors; the presence of securitized real estate has increased considerably. It is vulnerable to the numerous technical & business risks that often represent greater exposures than those that are traditional. Thus risk assessment need arises. Risk assessment is a tool to identify those risks in a project and manage it accordingly with proper treatment. Risk assessment is defined in this study as a technique that aims to identify and estimate risks to personnel and property impacted upon by a project.

INTRODUCTION
Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Project risk management includes the processes concerned with identifying, analyzing, and responding to project risk. It includes maximizing the results of positive events and minimizing the consequences of adverse events. Generally, risk is a choice in an environment rather than a fate. BS 6079 (British Standard Institution 1996) defines risk as ‘It is the uncertainty inherent in plans and possibility of something happening that can affect the prospects of achieving, business or project goals’. The word ‘‘risk’’ was known in the English language in the 17th century. It is believed that the word was originally a sailor’s term that came from the Spanish and meant ‘‘to run into danger or to go against a rock.’’ The money spent to fund shipments overseas was the first example of risk business in the early days of travel. Each and every activity we do involve risk, only the amount of risk varies. Prof. Kent Miller of Purdue University defines risk as “Unpredictability incorporations/businesses outcome variables”. About Uncertainty he defines as “Unpredictability of environmental and organizational variables that impact the corporations/businesses performance.”Consequences of uncertainty and its exposure in a project, is risk. In a project context, it is the chance of something happening that will have an impact upon objectives. It includes the possibility of loss or gain, or variation from a desired or planned outcome, 2 as a consequence of the uncertainty associated with following a particular course of action. Risk thus has two elements: the likelihood or probability of something happening, and the consequences or impacts if it does. Managing risk is an integral part of good management, and fundamental to achieving good business and project outcomes and the effective procurement of goods and services. Risk management provides a structured way of assessing and dealing with future uncertainty. Project risk management includes the processes concerned with identifying, analyzing, and responding to project risk. It includes maximizing the results of positive events and minimizing the consequences of adverse events.
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RISK IN REAL ESTATE AND CONSTRUCTION INDUSTRY
The real estate and construction industry has changed significantly over the past several years. It is an industry driven primarily by private investors; the presence of securitized real estate has increased considerably. Not unexpectedly, the influence of institutional investors on the real estate industry is formidable. They are beginning to experience a higher degree of scrutiny by investors, consultants and analysts, and are expected to deliver "best in class" service in all areas - from property management to risk management. To be successful in this environment, where our collective "performance bar" is being raised significantly, the real estate industry will have to dedicate more resources and develop a higher degree of operational sophistication Real

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