Tools and Techniques in Risk Identification: A Research within SMEs in the UK Construction Industry

Abstract

Risk identification plays a key role in the success of managing risk. Failure in the identification of risks can cause inadequacy in the whole process of risk management which led to non-achievement of organisational objectives. Tools and techniques facilitate the process of identification, and need to be adopted on the basis of firms' characteristics. The difficulty to recognise applicable tools and techniques within organisations is investigated as one of the key barriers that obstruct practise of risk management. This study discusses the efficacy of different tools and techniques of risk identification within Small and Medium Enterprises (SMEs) in the UK construction industry. Results from a questionnaire survey shows the challenges faced by SMEs in undertaking risk identification and highlights the most common techniques adopted among 453 organisations. Documentation review, expert judgment, checklist analysis and information gathering are seen as the most important techniques within risk identification; which are practised for their valuable results, uncomplicated processes and easy to understand structure. Conversely, the group-based techniques like brainstorming and Delphi techniques because of SMEs' inadequate level of knowledge and resources are less practised.

An Investigation into the Effects of Risks and Risk Management of Bioenergy Projects

“…Of the 54 participants who responded to this question, 9.02% reported to use expert interviews to identify risks. This is in contrast to earlier findings by Rostami [26], who found that expert judgement is the second most used risk identification technique in the construction phase of projects with a 71% usage rate.…”

“…Some respondents indicated that cause and effect diagrams (7.52%) is used in their organizations. A minority of participants (6.77%) uses database or company documentation review method, which differ from Rostami [26] result were 75% of the respondents considered this technique as their most preferred tool for identifying risk. (6.01%) uses risk headings to identify risk in their projects.…”

“…Expert interviews This is considered the simplest form of risk identification were a series of questions are presented to industry experts to obtain their opinion in connection to potential risks [21]. This technique is widely used in different stages of the projects, and may be used to cover both internal and external risks [26]. It can be unstructured, semi structured, or structured [27].…”

Approaches to Risk Identification in Public–Private Partnership Projects: Malaysian Private Partners’ Overview

“…For risk analysis, tools such as sensitivity analysis, probabilistic analysis, influence diagrams, and decision trees, as well as Delphi techniques, are commonly applied by construction practitioners (Chapman 2001;Zwikael and Ahn 2011;Adedokun et al 2013). Rostami (2016) discovered that the construction industry in the United Kingdom relies on the knowledge and experience of individuals for risk management.…”

Effect of Employees’ Understanding on Risk Management Process on Risk Management: A Case Study in a Non-profit Organisation

“…Risk identification is important as it can assist an organisation to identify the best and most important input data; to have a better understanding on process and to identify the risks. Ultimately, risk identification provides information for decision-makers (Rostami, 2016). Therefore, this study develops the following research hypothesis: H1: Employees' understanding of risk identification process significantly influences their knowledge on risk management.…”