Which Risk Management Is Most Crucial for Controlling Project Cost?

Wooyong Jung, Seung H. Han

Research output: Contribution to journalArticle

6 Citations (Scopus)

Abstract

Risk identification, assessment, and mitigation have been widely used for effective risk management in international construction projects. However, contractors sometimes cannot know what risk exists, and even when they identify the risk, they sometimes do not know the impact on project cost or how well it can be mitigated after award. Thus, this study analyzes 20,008 risk data points, which are composed of checked risk before bid, actual risk after award, and residual risk after mitigation, and shows that 15% of unidentified risks before a bid actually happen as risks after award, 33% of identified risks are underassessed, and 62% of actual risks are not mitigated after award. This study examines the influence of risk identification performance on assessment and mitigation performance and which risk management phase impacts cost performance more. This study also shows risk factors that are not well identified, assessed, and mitigated. These results help in managing practical risk control and identify which risk control should be studied further.

Original languageEnglish
Article number04017029
JournalJournal of Management in Engineering
Volume33
Issue number5
DOIs
Publication statusPublished - 2017 Sep 1

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Risk management
Costs
Contractors

All Science Journal Classification (ASJC) codes

  • Industrial relations
  • Engineering(all)
  • Strategy and Management
  • Management Science and Operations Research

Cite this

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Which Risk Management Is Most Crucial for Controlling Project Cost? / Jung, Wooyong; Han, Seung H.

In: Journal of Management in Engineering, Vol. 33, No. 5, 04017029, 01.09.2017.

Research output: Contribution to journalArticle

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