Incorporating complexity into risk management: an integrated risk assessment process for mega construction projects

2020-11
Erol, H. Hüseyin
Complexity and risk are inherent components of mega construction projects due to their unique characteristics. However, existing project management practices fail to incorporate complexity-based thinking into risk management. The lack of integration between complexity and other risk-related concepts leads to unrealistic risk assessments, ineffective management strategies, and poor project performance, which decrease the belief in risk management as a value-adding process in projects. In order to fill this gap, this research aims to unveil the relationship between complexity and risk in mega construction projects and propose a holistic approach that can help to manage the project risk and complexity. For this purpose, a mixed-methods research approach was adopted to analyze the data acquired through interviews with 18 participants from 11 mega construction projects carried out by the Turkish contractors. While the quantitative analysis uncovered the relationship between complexity and risk in numerical terms, the qualitative analysis provided further evidence about the nature of this relationship by exposing their links. By combining the findings of both analyses, the Integrated Risk Assessment Process (IRAP), which includes the concepts of risk, uncertainty, complexity, and management strategies, was proposed. Then, IRAP was operationalized by linking these concepts via an Analytic Network Process (ANP) model. The weights of the parameters in the ANP model were determined by a two-round Delphi study conducted with the domain experts. The data obtained using an interactive data collection tool in the first round were consolidated through an expert panel in the second round. Following the finalization of the model, validation studies were conducted to test both the risk quantification performance of the ANP model by comparing the results with the findings from 11 mega construction projects and the applicability of IRAP in practice with a demonstrative case study. The results revealed the potential of IRAP and the ANP-based quantitative model in terms of managing and monitoring the risks in mega construction projects. Therefore, the proposed risk assessment approach is expected to contribute both to the literature by explaining the links between risk, uncertainty, complexity, and management strategies and to the practitioners by supporting risk-informed decision-making process in mega construction projects. Although IRAP has been developed considering the dynamics of mega construction projects, it can also be implemented in other project-based industries to incorporate complexity into the risk management process.
Citation Formats
H. H. Erol, “Incorporating complexity into risk management: an integrated risk assessment process for mega construction projects,” Ph.D. - Doctoral Program, Middle East Technical University, 2020.