Project Risk Response Strategy

  • Risk: Cost
    • Risk Response Strategy: Mitigate

Mitigation is a risk response involving “lowering its probability or potential impact” (Kendrick, 2015, p. 196). Although mitigating actions cannot eliminate the risk, they can significantly reduce its negative influence. For example, it is possible to reduce the undesirable consequences of cost risks through careful planning of the project expenses and having a separate fund to use in case of financial circumstances beyond control. Mitigation as a cost risk response strategy can also reduce the possibility of the occurrence of financial problems during the construction project implementation. One of the ways to apply this strategy is the creation of a budget that covers the expenses of the business plan.

  • Risk: Time
    • Risk Response Strategy: Avoid

The strategy of avoidance means eliminating the risk (Kendrick, 2015). In case of time risk, probably the best strategy is to avoid it. Time-related issues in the process of construction projects can increase the occurrence of other existing risks. Thus, in case there are problems with time management of the project that lead to the schedule delay, cost risk increases because expects to receive the object on time and would not be satisfied with any delays and even sue the company. To apply the avoidance strategy to respond to the time risk, it is necessary to reveal the weak points of planning and provide more time for some stages initially.

  • Risk: Safety
    • Risk Response Strategy: Mitigate

Safety risks during construction projects cannot be eliminated. Thus, the most suitable strategy to respond to this risk is mitigation. Safety should be a primary concern of the construction project since many people are involved and the probability of this negative risk is very high. To reduce the probability of safety risk occurrence, it is crucial to inform the people involved about the safety measures. To minimize the severity of this risk when it occurs, it is necessary to provide employees with personal protective equipment and make sure they apply all safety measures during the process of construction.

  • Risk: Schedule
    • Risk Response Strategy: Avoid
  • Risk: Technical
    • Risk Response Strategy: Transfer

Technical risks that appear in the process of project implementation can be addressed through a strategy of the transfer. Transferring a risk presupposes the shift of responsibility to the other party. Technical risks for the construction project are difficult to avoid or predict because they depend on the condition of the equipment involved in the project. Thus, there are some ways to transfer the technical risks.

First of all, the responsibility can be shifted to the company that owns this equipment in case it was rented. If the equipment or machines were purchased for the project, a possible breakdown can be covered for the cost of insurance. However, in case it was damaged by the employees and their fault is proved, the technical risk will be transferred to the people found guilty in the incident. Avoidance can be one of the possible strategies to respond to schedule risk. According to Kendrick (2015), avoidance of risks “requires changing the project plan or approach to remove the root cause of the risk from your project” (p. 197).

In the case of schedule, it is advisable to evaluate the possible risks related to schedule delay and plan actions to avoid them. These actions should be completed before the launch of the construction project because schedule risks during its implementation can cause significant problems because of delays and related financial issues because of the necessity to extend deadlines for the project.

References

Kendrick, T. (2015). Identifying and managing project risk: Essential tools for failure-proofing your project (3rd ed.). New York, NY: AMACOM.