**2. Classification of risks**

Classification and definition of risks is furnished in **Table 2**.


**185**

**Sl. no**

*Process of Risk Management*

*DOI: http://dx.doi.org/10.5772/intechopen.80804*

**3. Introduction to risk management**

hence, the necessity of risk management [5].

**Definition of risk management**

2 **Nadeem Ehsan et al., 2012**

5 **www.vp-projects.kau.edu.sa**

of risk 3 **Bahamid et al., 2017**

1 **https://en.wikipedia.org/wiki/Risk\_management**

Definitions of risk management are presented in **Table 3**.

Risk Management is the identification, evaluation, and prioritization of risks followed by coordinated and an economical application of resources to minimise, monitor, and control the probability or

Risk Management in a project involves the identification of influencing factors which could have negative impact on the the cost, schedule and quality objectives of the project and quantification of impact of potential risk and implementation of mitigation measures to minimise the potential impact

Risk Management is defined as organized and comprehensive method tailored towards " organizing",

Risk Management in construction consists of planning, monitoring and implemeting the measures needed to prevent exposure to risk. To do this, it is necessary to identify the hazards, assess the extent

Risk management is a systematic method of identifying, analysing, treating and monitoring the risks that are all involved in any activity/ process and is a systematic method that minimises the risks which

impact of unfortunate events [6] or to maximize the realization of opportunities.

"identifying" and "responding" to risk factors in order to achieve project goals.

of risks, provision of measures to control the risks and to manage residual risk

4 **www.stakeholdermap.com/risk/risk-management-construction**

may be an impediment to attainment of objectives

**4. Definitions of risk management**

Risk management is a planned and a structured process aimed at helping the project team make the right decision at the right time to identify, classify, quantify the risks and then to manage and control them. The aim is to ensure the best value for the project in terms of cost, time and quality by balancing the input to manage

Risk management is a continuous process which is to be implemented in any project from inception to completion. However, in order to realise its full potential, risk management should be implemented at the earliest stage of a project, i.e. feasibility design and construction. Risk is an uncertain event or condition that, if occurs, has a positive or negative effect on a project's objectives. Components of risk are the probability of the occurrence of an event and the impact of the occurrence of that event. There are many sources of uncertainty in construction projects, which include the performance of construction parties, resources availability, contractual relations, etc. because of which, construction projects face problems that cause delay in the project completion time. Success of a project is measured by its ability to get completed within the budgeted cost and time. These goals are interrelated where each parameter has an impact when other parameters get affected. An accurate cost estimating and scheduling should be performed in order to meet the overall budget and time deadline of a project. As such, risk management becomes an integral part of construction management which intends to identify and manage potential and unforeseen risks during the period of implementation of the project;

the risks with the benefits from such act. It is just a cost benefit analysis.

#### **Table 2.**

*Classification of risks and their definitions.*

*Perspectives on Risk, Assessment and Management Paradigms*

**3** Association of Project Management Body

**5** www.business.dictionary.com/definition/

of Knowledge [1]

risk.html

**Source Definition**

**Sl. no**

**184**

**Table 2.**

**Risk Definitions**

**2. Classification of risks**

**Table 1.** *Definitions of risk.*

*Classification of risks and their definitions.*

Pure risk A risk which has chance of loss or no loss. *Example*. A building may get affected by fire or not. These are best covered by insurance Speculative risk Involves chance of gain/loss. *Example*. A builder may take a risk by promoting a

Fundamental risk These are external to a project and which, if they materialise, would be on a large

Particular risk These are project specific risks and are identified within the parameters of a project

project, but it may bring him gain/loss.

Classification and definition of risks is furnished in **Table 2**.

**8** Philosophy of Risk [3] Risk has been interpreted as

insurable.

safety risks, legal risks, etc. *Source: Project Risk Management, D Van Well-Stam et al., Kogan Page Publications, 2003.*

new venture depending upon the prevailing conditions in the vicinity of proposed

Project Risk is an uncertain event or condition, that, if it occurs, has a positive/negative effect on project objectives. A risk has a cause and if it occurs, a

and its consequences on project objectives

be avoided through preemptive action.

risk related to uncertainty of outcome.

results from a particular challenge."

A probability or threat of damage, injury, liability, loss, or any other negative occurrence that is caused by external or internal vulnerabilities and that may

other adverse consequences" and the definition of risk is "exposed to danger." However, taking risk can also result in positive outcome. A third possibility is

event occurs during a stated period of time, or

Risk = hazard × exposure where Hazard is defined as the way in which a thing or situation can cause harm and exposure as the extent to which the likely recipient of the harm can be influenced by the

consequence.

**4** British Standard BS IEC 62198:2001 Combination of probability of an event occurring

**6** Fundamentals of Risk Management [9] "A chance or possibility of danger, loss, injury or

**7** Adams [8] Risk is the probability "that a particular adverse

hazard

scale and cannot be prevented. These risks are associated with major natural, economic, political or social changes and generate large scale losses. Examples are: Floods, earthquakes, fluctuation of exchange rates, etc. This risk may or may not be

and can be controlled during the implementation of a project, e.g. quality risks,
