Corrective Action and Monitoring

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Section 4 – Corrective Action and Monitoring 4.1 Risk Tolerance In the construction industry, stakeholders like investors must consider the risk tolerance and how much loss they can accept.

Depending on how many risks they are willing to take, risk tolerance can be divided into three categories: aggressive, moderate, and conservative. It may be challenging to adopt safety and enhance safety performance due to differences in worker risk tolerance.

The extent to which risk tolerance for construction safety varies across large geographic regions is uncertain ( Salas et al.,2020). Accidental, unanticipated environmental pollution significantly impacts the project, and specific environmental risk surpasses society’s standard. Considerations for Determining Risk Tolerance 1) Taking risks – This has to do with the capacity for risk-taking.

Depending on how many

projects stakeholders, especially the management, are willing to risk, they can be classified as either risk-taker, risk-averse, or risk-neutral. For example, in construction, risk-taker are prepared to invest more than the typical return, and risk avoiders, if they are prepared to invest less than the typical return, are risk-neutral if they merely want to invest for the average return.

2) Organizational objectives – Goals provide the target toward which an organization directs its resources from a risk-tolerance perspective. Different goals result in different levels of risk tolerance.

3) The capacity to manage risks is the organization’s capacity for controlling its risk exposures within the parameters of acceptable risk tolerance.

The project manager has the role of checking the possible consequences and likelihood, if the company has enough capable, experienced, and qualified employees to manage risks, and if the culture and structure of the company’s risk management department help or hinder risk management.

Factors Affecting Risk Tolerance 1. Timeline -Construction projects always have a more excellent timeline than other projects. In general, greater risk can be taken if there is more time. 2. Goals- For every project, the goal is to achieve the objective within a specified time and specific budget. 3.

People -Human capital is crucial to project success and plays a significant role in a construction project. A workforce that is more abundant, knowledgeable, competent, and technological trends to take more significant risks 4. Investors’ level of comfort- the degree to which an investor feels at ease taking risks is closely correlated with their risk tolerance. 4.2 Risk Mitigation

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Construction companies can utilize risk mitigation to prepare for probable risks and lessen their effects. This project will employ risk mitigation, similar to risk reduction, in that it will take steps to decrease the adverse effects of environmental and safety hazards. There are four strategies to manage risk.

First, Avoid risk; if the project team can stop the risk from happening, it should eliminate or at least lessen it. It entails doing something to ensure that your project suffers the least amount of harm feasible. Transfer: The project may pay a third-party entity to take a risk. It might be an effective risk management strategy. The most typical method is insurance.

Third, accept: Project team must accept the risk if they cannot eliminate, reduce, or transfer it. However, they should consider their options and be aware of the potential consequences. A risk trigger indicates that risk has struck or is about to.

Risk assessment may reveal triggers, which can be evaluated as the project progresses. The project team will put a risk response into place once the risk triggers. The project team must recognize and record risks early in Finding Risk triggers. Along with identifying risks, the project team will ascertain several critical data points, such as the likelihood of its occurrence at any point during the project, the severity of its effects, the timing for the risk, and how the team will respond to it. The project team must also choose the catalysts for risk evaluation.

4.3 Corrective Risk Management Strategy This project will use the strategic planning process, which will be an ongoing process in which the organization will choose to adopt specific strategies, develop an action plan, and evaluate its progress, growth, and accomplishment. The approach for taking corrective action is to determine and remove the root of problems to eliminate their repetition. The corrective action process involves realizing and characterizing a problem, identifying its root cause, and taking initiatives to curb it from happening.

The PM will perform a post-mortem analysis to help manage organizational knowledge. Postmortem analysis will allow the team members to learn new skills and expand their experiences, which benefits current and upcoming projects. 4.4 Corrective Action Plan Process for Corrective Action in Steps:

1. Identify the problems. According to Liu et al. (2015, p.565), the significant risk was cultural. The minor common risks include safety risk, duration risk, Land acquisition risk, and change in drawing risk and environmental.

2. Establish the scope. Project managers need to understand the scope of a project to know how much time, money, or workforce went into it.

3. Containment Measures: the root cause of cultural risk was a result of the four projects ( AP, AC, BS, BC) being in different countries. Risks were perceived differently by the same contractor under different host cultures (Liu 2015 et al., p. 572). The appropriate measure to take will be for management to encourage workplace diversity

4. Prepare corrective measures. The project team will develop practical, measurable solutions that concentrate on the fundamental cause and have timelines that the project team can meet.

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5. Put the corrective action into action. The project team implements the corrective actions in this step.

6. The final step is checking and monitoring to see if the plan was successful. The project team should determine the progress, update the team on the modifications, record the process and finish it with a debrief.

The Corrective documentation will be available to others since the corrective action plans offer the organization a remedial plan making it crucial. It offers a procedure for carrying out corrective action that starts with research and ends with a review. Organizations that employ this kind of planning have a framework to manage and develop their solutions.

The following are some advantages of utilizing corrective action plans: enhancing workflows or techniques, Streamlining the process, Gaining effectiveness, and efficiently locating inexpensive means of mistake correction.

Reference

Liu, J., Meng, F., & Fellows, R. (2015). An exploratory study of understanding project risk

management from the perspective of national culture. International Journal of Project

Management, 33(3), 564–575.

Salas, R., Hallowell, M., Balaji, R., & Bhandari, S. (2020). Safety risk tolerance in the construction industry: a cross-cultural analysis. Journal of construction engineering and management, 146(4), 04020022.