External and internal risks

Architectural construction is an extremely risky industry because each construction plan is unique and brings its own special challenges and opportunities. Controlling architectural construction may be tricky because internal and external risks can derail and disrupt the whole project.  However, regarding to where this locate, it can be managed with correct plan and implementation. Some external and internal risk sources inherent in these types of projects, which are categorized to operation, contraction, finance and environment (Dzhandzhugazova, Zaitseva, Larionova, 2015). Internal risks come from within the institution and arise through usual operation. Internal risks are mostly predictable, and therefore can be avoided or controlled. On the other hand, external risks are from the outside of the project group and its host organizations’ control. For this reason, external risks are commonly tougher to forecast and control (Al-Sabah, Menassa, & Hanna, 2014).

Our university construction locate in one developing country (Iran). It is obvious that external and internal risks in some developing countries are totally deferent with developed countries like Canada. Therefore, it will mention to some architectural construction risks in Iran.

External Risks

Economy (inflation): Inflation or instability in foreign exchange especially in Iran has a very significant role in economic risk. Inflation is external risk because it come from external project team and it is extremely difficult to foreseen what will happen for the prices of building needed materials such as Cement, Brick and Iron  in one construction project even for one week later, which in our project is building MBA university (Ansah, & Sorooshian, 2017).

Environmental risks: In Iran environmental risks which are consist of air pollution, seasonal effects and natural disasters can be problematic if managers are not familiar with local conditions. Regarding to climate of Iran, during cold seasons, especially winter this external risk makes stop the building and delay delivering the project, which lead to loss. This is because worker cannot work in this situation and water of come building materials such as cement will freeze (Jozi, Shafiee, MoradiMajd, & Saffarian, 2012).

Socio-political risks: According to sanctions in Iran that were imposed by United State, another external risk is import and customs limitations and equipment disposing difficulties which are some of the socio- political risks (Jozi, Shafiee, MoradiMajd, & Saffarian, 2012).

Internal Risks

Talent related risks: One of usual management risk that occurs during implementation of construction is ambiguous efficiency of resources. In other words, during one construction project, several groups and teams such as architectures, civil engineers, electronic engineers and workers will work. If one of these teams do not have sufficient skills and talent, it can result in disastrous losses for managers and stakeholders. This risky situation mostly happen in Iran because people or groups who do not have appropriate construction ability and literacy can easily take license by bribes (Hashemi, 2009).  Schedule: In construction project time is literally money. One weak scheduling, small miscommunication or one inaccuracy report can directly impact the budget and can delay architectural projects for weeks and months. In Iran the time is the last priority for construction teams and they really do not pay attention correct report. They just try how they can receive more funds from total budget. Design: Management of design during construction improves the probability of risk. In Iran sometimes the whole project will be under pressure for various reasons such as work disputes, design changes, labor productivity, haste in the price offer process, time interruptions due to redesign of maps, and poor quality of work due to time constraints. In this situation, the project team has to accept an unfinished design for building to start on time. The construction team takes this risk to the rest design of building catch up. Finance: In Iran, financial problems in one construction project are from inappropriate coordination and planning, which lead to underestimation of budget as well financial corruption and fraud in big construction projects are really common in this country. In this condition, managers cannot be able to pay for workers, staff and on account purchased equipment (Hashemi, 2009).  Construction plans: in Iran inaccuracy in design, failure to provide structural maps with relevant details, non-compliance of structural and architectural plans and lack of compulsion to control structural plans in the licensing authority and in general the presentation of copied maps are the crucial points that seem to increase the volume of destruction. Materials: Lack of use of standard materials, the most important of them are non-standard and unlicensed concrete or beams and imported rebar without quality and without standard. Modern technology: The lack of use of modern technologies, light and dry materials such as knauf, and the insistence on the use of traditional materials that were visible in the earthquake as debris and the destruction of the outer shell of buildings, were evident (Hashemi, 2009).

 

References -Dzhandzhugazova, E. A., Zaitseva, N. A., Larionova, A. A., & Petrovskaya, M. V. (2015). Chaplyuk, VZ Methodological aspects of strategic management of financial risks during construction of hotel business objects. Asian Social Science, 11(20), 229-234. -Al-Sabah, R., Menassa, C. C., & Hanna, A. (2014). Evaluating impact of construction risks in the Arabian Gulf Region from perspective of multinational architecture, engineering and construction firms. Construction management and economics, 32(4), 382-402. Jozi, S. A., Shafiee, M., MoradiMajd, N., & Saffarian, S. (2012). An integrated Shannon’s Entropy–TOPSIS methodology for environmental risk assessment of Helleh protected area in Iran. Environmental monitoring and assessment184(11), 6913-6922. Hashemi, A. (2009). Construction Technology Transfer: An assessment of the relevance of Modern Methods of Construction to housing shortages in Iran (Doctoral dissertation, Cardiff University (United Kingdom).

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