Risk Assessment in Construction Projects: Integrating Five Dimensions of Risk

Abstract

Managing risks is an essential yet complex task for project managers. The ranking of risks is important because it would be impossible to deal with every potential risk at every stage of the project. Having assigned risk factor values to each risk, the project team can create contingency plans to reduce project risk for the jobs with the highest risk factors. Traditional probability-impact techniques often fail for multifaceted modern projects, necessitating new approaches incorporating more risk dimensions. This research aims to develop a mathematical model that introduces a new risk rating factor, integrating all five dimensions of risks (probability, impact, strategic impact, manageability, and connectivity). The research methodology involved risk identification through comprehensive literature review, followed by two surveys to assess the new risk dimensions. Data analysis included using Relative Importance Index (RII), Analytic Hierarchy Process (AHP) and DEMATEL. Despite the focus on impact and probability, this study reveals manageability, strategic impact, and connectivity as vital additional dimensions. The first survey reinforced this, with over 70% applying impact and probability, though with sizable consideration of manageability and strategic impact too, confirming growing desire for multidimensional assessment. After initial 4-dimensional assessment, the top ten risks were re-analysed using an expanded 5-dimensional approach. This revealed inadequate or poor project planning, scheduling, and budgeting; project-funding problems; and poor workmanship and construction errors leading to rework as the top three risks. Comparative analysis reveals differences in risk rankings when transitioning from 2-dimensional to 5-dimensional assessment. Certain risks remain high priorities across dimensions. However, the perceived importance of other risks shifted notably. This demonstrates the merits of expanding beyond traditional parameters to identify risks that limited assessment could miss. A pioneering 5-dimensional risk model called the Multidimensional Risk Index (MRI) was developed to enable robust assessment. It introduces a unified rating synthesizing all five dimensions. This significantly advances methodology for multi-dynamic projects and is essential for accurate and efficient decision-making.