Risk Management Framework for Economic, Political, Managerial, and Legal Risks of construction projects in Vietnam
Date Issued
2011
Date
2011
Author(s)
NGUYEN, Quang-Long
Abstract
Along with the development of an economical country, the construction’s industry has changed drastically because of the high buildings; the new industrial parks; the bridges with the larger spans; the highways; the hydroelectric projects, etc. are gradually appearing all over Vietnam. The update on the modern technologies, scientific applications which do not catch the rapid growth of the construction industry up have brought about unforeseen risks during all the construction activities from the project’s implementation, execution of the work to the completion and acceptance of the project. In addition, the risk management in Vietnam’s construction industry now may be underestimated leading into some mistakes in construction’s period, unfortunate labor accidents that still happen every year.
Next, risk is common and unavoidable in all natural aspects of an economy and a society. Construction projects are started, executed in a complex environment of dynamic socioeconomic, and is influenced much by the weather resulting in the circumstances of high uncertainty and risk. Thus, the management of risk is an activity that cannot be ignored and must be associated with all activities of project management. Forecasting, identifying and finding solutions to minimize risks in construction’s projects will assist professional project management in anticipating, building a model, having a plan to control and deal with risks effectively when carrying out a construction contract in Vietnam. An efficient model to deal with multi-faceted risks will not only ensure completed work with the best quality and on schedule but also help executing project units to save the expense, make the profit. Due to these practical meanings, this research was implemented: to identify the unique or critical risks into 04 major groups (Economy, Politic, Law and Management); to evaluate, suggest the mitigating measure for each identified risks; to propose a risk management framework in Vietnam’s construction projects. A questionnaire survey, which consists of twenty-two risks that were found and divided into four groups appropriate to research’s objectives together with their corresponding mitigating measures, is conducted from December, 2010 to March, 2011. This questionnaire survey with the open-ended questions was sent 86 suitable people in many construction firms in Vietnam by several means, including face-to-face interviews. However, only fifty-eight are the proper responses, and the replied rate is only 67% which is evaluated a good result for this research. After collecting the data, Factor analysis and Multiple-regression technique in SPSS software were considered appropriate to these study’s objectives in analyzing data. Six new factors extracted from the factor analysis were representative of a set of original variables, and were inserted into the multiple regression technique for considering in terms of the level of influence on the project depending on a regression model found. At last, the hierarchical level of factors, the risk’s influence matrix (Alien Eyes’ model), and the matrix of implementation of mitigation measures were discovered to propose a risk management framework for Vietnam’s construction projects.
Subjects
risk management framework
construction’s projects
identified risk
mitigation measures
Vietnam
Type
thesis
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