CHAPTER TWO

2.0 Literature Review

The need for project to be completed on time, cost and quality cannot be over emphasised as it brings satisfaction to all the stakeholders particular to the project. On the other hand, the failure of project; not completed on schedule will be will result in a dissatisfaction among the entire stakeholders. However, the non-completion of projects on schedule can be attributed to the deficiency and sometimes non-concrete involvement of the project stakeholders as well as poor adoption to project risk management processes throughout the project lifecycle. This is mostly the problem in Nigeria and with contribution of other factors; the country is described by Adenikinju, (2005) as having the characteristics of developing countries when compared to developed international countries like the UK and the USA. This is due to the slow development process in the different project sectors and particularly the construction project sector and the association of un-resolved risk through out the construction project life cycle. PMI (2004) argues that the consistent and proactive risk management process being carried out throughout the project lifecycle by the organisation handling the construction project will result in the successful completion of the project on schedule. And also with a strong visionary statement of Nigeria as documented in chapter one can be better achieved when the risks hindering the desired achievement is identified proactively and removed or managed. Therefore, the literature review will in a sequential order highlight topics from already written literatures as it related to the project topic. The topic areas will be supported with criticisms and discussions to support the project objective.

2.1 Scope of this section

The scope of this report section will be focussed on reviewing topic areas concerning the project topic so as to extract the main causes of construction project risk imposed by the project stakeholders of a project.

2.2 Scope exclusion of this section

This section will not vividly explain the overall topics to be highlighted but, will strategically discuss each topic towards answering the demands of this report topic and this can be done by extract the relevant contributions that will support the project objective.

2.3 Stakeholders

The topic ‘stakeholders’ will be treated first in this literature review reasons being that this report focuses on project stakeholders as the main contributory factor to project risk. According to Gray and Larson (2006) stakeholders are individuals or organization that are actually involved on projects and their interest can be negatively or positively been affected due to the project execution/completion. However, in the context of this report, stakeholders will not be treated as being affected by the project but, their contributions to the project which results in project risk.

Stakeholders in project are subdivided into two: Primary and Secondary stakeholders. Primary stakeholders in a project are those people or groups that are concerned with the internal aspect of a project; having direct strategies and operational roles in the project. While secondary stakeholders are the people or group who are external to the project; having no strong and formal interest on what is going on in the project (Cleland and Ireland, 2007). In the context of this report, the stakeholders to be treated will be primary stakeholders due to the fact that they are more involved in the operational and executing aspect of a project. In a project lifecycle, Gray and Larson (2006) stated that the executing phase of a project requires more work to be carried out (see figure below). Therefore, according to this report it therefore means that project risks exerted by project stakeholders are more in the executing phase of the project life cycle

Project context consists of internal and external environment that affects project positively or negatively (DeCarlo,2004) which implies that project risk is subdivided into internal and external risks as explained diagrammatically in the risk break down structure by El-Sayegy(2007) below

Fig. 2: Risk Breakdown structure (Adapted from El-Sayegh, S.M.2007.: Risk assessment and allocation to the UAE construction industry. P. 433).

However, this report will be focused on the internal risks being exhibited by mainly the five stakeholders shown in the diagram above.

2.4 Concept of project risk

Risk in the dictionary sense of meaning is a hindrance to the successful completion of any activity on schedule. The concept of risk is viewed by different authors but the meaning depends on the context it is being viewed from or applied in. However, from literature review, it is noticed that risk is viewed mostly from two major views: risks from the project or working activity and risk from as a result of the people handling the project activity. This was explained by different authors such Haddow and Bullock (2008) defining risk from the internal or project activity point of view as the probability and frequency of an hazard occurring and Pinto (2007) defining risk as any possible event which can negatively affect the viability of a project. But, it the context of this report, risk will be viewed from the ‘people influenced’ point of view but not risks resulting from hazardous project environmental conditions. APMBOK (2006) argued that project risks are uncertain events which when occurs will either have positive or a negative consequence on the project objective.

However, the perception of risk has always been viewed from the negative point of view as explained by Pinto(2007) above but, this report will further point that risk is not always negative in the sense that: the presence of risk in a project can in some case signify that there is ‘great treasure to be mined’ from the project when completed but when not effectively managed , will lead to the non-completion of project on schedule or project deliverable not meeting or exceeding client’s requirement. Therefore , though risk will in some ways hinder the completion of the project on schedule it should also be viewed as a bridge which when crossed will lead a given project expectation to its desired goal. But particularly to the Nig