Abstract
“Risk comes from not knowing what one is doing” is the what everyone believes in, and when it comes to business organisations, it is inevitable. In this modern set up, every organisation has to be vigilante towards the unforeseen risk factors and uncertain situation they tend to face as organisations grow. The landscapes of risks globally have become quite dynamic, making them hard to predict and identify, which calls for a reform in the risk management toolkit of every organisation so as to not just assess risk beforehand but also to mitigate it in time. The authors in the present study construct critical investigative insights regarding how these risk assessment tools (qualitative, quantitative, and hybrid) are effective in enhancing organisational effectiveness in view of their perceived benefits.
TopConstruction Industry
The construction industry is one of the prime indicators of development and is a booming industry when it comes to attracting foreign direct investments and funding from international agencies. Indian construction industry constitutes a central part of the economy, as it accounts for almost 11% of India’s GDP. As per the Indian Brand Equity Foundation (IBEF) the construction industry is attributed to a significant part of its development activities where it constitutes 40%-50% of India’s capital expenditure on projects in various sectors such as highways, roads, railways, energy, airports, irrigation, etc. The Construction industry in India is expected to grow at 5.6% during 2016-20, compared to 2.9% during 2011-15.
The construction market in India is also expected to grow as the third-largest globally by 2025 and its revenue is estimated to reach $5 billion by the year 2020. The construction sector is also assigned with the responsibilityof propelling India’s to become a hub of construction & development projects and eventually shape up the creation of world-class infrastructure within the country.With future opportunities and challenges that India is supposed to face in upcoming years, risk management becomes an important tool within the construction industry to analyze and manage risks within the projects which pose a threat to risk managers. In general construction projects are perceived to carry significant inherent risks as it involves different contracting parties, such as owners, designers, contractors, subcontractors, suppliers, etc. (PMI 2013). This phenomenon of the construction industry often affects project time, cost and quality.
In general construction projects operate in complex and dynamic environments with high uncertainty and risk, which are further entangled with time, cost and quality constraints. It is also vulnerable to the numerous risk scenarios that often jeopardize organizational effectiveness, which accentuates the need for effective risk assessment. Risk assessment is a means to identify various risk scenarios in a project and manage them in time. Thus risk assessment is defined as a bundle of techniques that aims to identify and estimate risks inherent to men and materials within the project (Jayasudha&Vidivelli, 2016).
Key Terms in this Chapter
Risk Management: Risk management has been defined as the systematic implementation of management policies and practices for the purpose of establishing the perspectives of risk scenarios. Further it is a process of identifying, analyzing, evaluating, treating, monitoring, communicating and reviewing risk.
Innovativeness: Innovation in an enterprise can be defined as an economic decision made in order to carry out tasks related to taking advantage of the software/tool in a most creative and inventive way to prevent threats from materializing. Innovativeness is strategic in nature which establishes a competitive position for the company in all aspects of its activities.
Credibility: Credibility is regarded as the key feature of any system and speaking of credibility within risk assessment tools, credibility is analogous competence and trustworthiness. A tool being credible should possess the following: a) competence in identifying risk, b) trustworthiness to deal with ubiquitous risk factors and finally dynamic enough to deal with diverse risk scenarios within the business environment.
Security: Security as a perceived benefit of risk assessment tools encompasses a broad set of strategies aiming to prevent, discover and respond to threats pertinent to all assets. It further involves the protection of personnel, hardware, software, networks and data from physical actions, intrusions and other events that could possibly damage an organization. These include natural disasters, fire, theft and terrorism, among others.
Functionality: Functionality as a perceived benefit within a tool is related to various aspects of user friendly interface, features, maintainability, reliability, information presentation and classification, and eventually threat forecasting and navigation.
Perceived Benefits: Perceived benefits are beliefs about the positive outcomes associated with behavior in response to a real or perceived threat.
Organisational Effectiveness: Organizational effectiveness encapsulates organizational performance through the numerous internal performance outcomes that are normally associated with more efficient or effective operations.
Responsiveness: Responsiveness refers to the ability of a system to understand and carry out its tasks in a timely manner. A responsiveness application/aspect of a tool refers to the way it reacts quickly and effectively to a wide range of risk scenarios within business activities as they occur.