Risk management in the construction environment: the effects of decision making and communication

English: A number of factors contribute to cost overruns, time complications, specification details, and weak communication. Some are within the control of the project team, but most of them are not. These complications lead to additional costs and loss of productivity on construction sites due to time loss. Optimism bias, inability to produce on certain levels, lack of experience and knowledge, inability to understand the seriousness of executing risk management duties as well as strategic misrepresentation are identified as the main causes. In the ideal world every project will make its estimated profit, the client will be satisfied with the product and the professional teams on the client’s side and the contractor’s side will have made all the correct decisions as originally planned at the pre-contract meetings. Every single decision made by a member of the project team (including contractors and consultants), from the principal agent to the labourer on site, has an effect on the results of a project. The concepts of decision making, teamwork and communication play a significant role in the construction industry and are dominant in this study. The construction industry is in a more challenging environment than before. Client expectations have increased and clients want quality products and services that use new advanced resources and equipment at lower cost and that need to be done in less time – which eventually leads to risk. Risk management is a relatively new addition to the wider concept of commercial and trade authority. Risk management may be seen as an ignored part in the planning and completion of building projects, but its significance and effect in the construction industry cannot be stressed enough. This study aims to create awareness of risk by all parties involved and to show that better planning will limit or mitigate the source of risk on a project. Furthermore, effective risk management will only be possible with efficient communication. With communication and awareness, there will be better quality and control of the project. Lastly, the study aims to educate future generations regarding the importance of risk.