Key Organizational Risk Factors; A Case Study of Hydroelectric Power Projects, Myanmar

KEY ORGANIZATIONAL RISK FACTORS: A CASE STUDY OF HYDROELECTRIC POWER PROJECTS IN MYANMAR

by

Aung Myo Hein

A thesis submitted in partial fulfillment of the requirement for the Degree of Master of Engineering in Construction Engineering and Infrastructure Management

Examination Committee :

Dr. Chotchai Charoenngam (Chairperson) Dr. B.H.W. Hadikusumo Dr. Noppadol Phien-wej

Nationality: Previous Degree:

Myanmar Bachelor of Civil Engineering Yangon Technology University Myanmar AIT Fellowship

Scholarship Donor:

Asian Institute of Technology School of Engineering and Technology Bangkok, Thailand May, 2009

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ACKNOWLEDGEMENTS First of all, I express my wholehearted gratitude to my beloved parent who supported financially and encouraged mentally during study in AIT. They ever give forgiveness and show their kindness whenever I fell down. To begin with, I would like to express my sincere gratitude to Dr. Chotchai Charoenngam, the intellectual giant as my admire thesis advisor who trained me to become as a warrior. I would like to thank him for the guidance, patient, promoting development comments and all unforgettable memorial events for the accomplishment of this study. I am grateful for working with the brilliant adviser who assembled my mind how to struggle the challenges without being scared. I would like to express my gratefulness to thesis examination committee members as well as academic adviser, Dr. Bonaventura H.W. Hadikusumo who encouraged and gave valuable advice during academic study and Dr. Noppadol Phien-wej who provided substantial study support in the early stages of the study. Their guidance, helpful recommendation and valuable comments made the study to be brighter and were of great contribution to the study. Grateful acknowledgements are extends to Minister of Electric Power-1 (Myanmar) who gives me opportunity to study in DHPIs projects, top managements of Department of Hydropower Implementation (DHPI), senior management and all participants who shared their valuable time from Construction Division (2) and (3). Their sincere cooperation and attention lead to the successful surveys. My great thankfulness belongs to all dear CEIM friends especially Karma G., Thotsaphol R., and Panwimon J., for their warmly assistance and patient on me. In conclusion, I would like to say many thanks to all peoples who help me partially to complete this study. I will never ever forget your help and our friendship will continue as long as my breathing.

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ABSTRACT Organizational risk, generally defined as the risk that the organizational configuration of a company does not support the achievement of its strategy, therefore becomes vital to manage for companies in the post-industrial era. The study focused on the internal key risks factors of construction project organization and how the organizational risk factors cause the problems and deficiency of construction lead to project delay. Then the objectives of study is to identify key organizational risk factors which cause deficiency of project and the rationale of organizational risk factors to project risk which create the negative outcomes of the project. Eventually, recommendation for the improvement of organizational risk management that is appropriate for construction project organization is followed. Multiple cases study approach (two construction divisions) is conducted in order to have robust results of the study. Opening process of study is risk factors identification which consists of initial factors and verification of the factors. Then, data collection is followed by interviewing practitioners in the projects with verified checklist, collecting project documents and site observation. Data analysis is conducted by description of differences risk factors between construction divisions and explanation of overall risk factors of both cases study towards the gathered information. Research findings confirm that different risk factors are influenced in both construction divisions and overall top rank risk factors are embedded in nine internal organizational networks which are necessary to control for improvement of project organizations. These top risk factors are 1) Technology constraints, 2) Time constraint resource scheduling, 3) Inaccurate information, 4) Technical Incompetency, 5) Lack of skilled workforce, 6) Delay major equipment, 7) Insufficient human resource, 8) Resource constraint project scheduling, 9) Sub-quality resource, 10) Lack of regular meeting and 11) Mistrust between parties. The proposed guideline of organizational risk management assists the top management of DHPI in order to make precise decision for managing risks in organization. Multi-dimensional causes, effects, rationale of organizational risk factors to project risks and recommendation for manageable factors mentioned above were discussed in this study.

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TABLE OF CONTENTS CHAPTER TITLE Title Page Acknowledgement Abstract Table of Contents List of Figures List of Tables Abbreviation 1 INTRODUCTION 1.1 Background 1.2 Climate of Myanma Hydropower Development 1.3 Problem Statement 1.4 Objectives of Study 1.5 Scope of Works 2 LITERATURE REVIEW 2.1 Risk and Construction 2.2 Organizational Risk 2.3 Managing Risk in Organization 2.3.1 2.3.2 2.3.3 Communication and Coordination Inter-firm cooperation Cross-functional team 6 7 9 10 12 12 13 14 15 15 17 18 19 20 21 22 23 23 23 24 24 1 1 4 5 5 PAGE i ii iii iv vii ix x

2.4 Practical Limitation of Risk Management 2.4.1 2.4.2 2.4.3 Risk Identification Assessing Impacts of Risk Events and Evaluation Process Risk Response Planning

2.5 Risks Interlocked Networks of Project Organization 2.6 Internal Organizational Networks 2.6.1 2.6.2 2.6.3 2.6.4 2.6.5 2.6.6 2.6.7 2.6.8 2.6.9 Social Network Knowledge Network Information Network Resource Network Resource Usage Requirements Inter-operability and Co-usage requirements Assignment Network Knowledge Requirements Resource Requirementsiv

2.6.10 Precedence and Dependencies 2.7 Summary 3 RESEARCH METHODOLOGY 3.1 Introduction 3.1.1 3.1.2 3.1.3 Selection of Research Method Research Approach Research Methodology Framework

24 24

26 26 27 28 31 32 34 35 35 35 35 36 38

3.2 Risk Factors Identification 3.2.1 Interviewing and Verification of Initial Risk Factors

3.3 Data Collection 3.3.1 3.3.2 3.3.3 3.3.4 Question Design Pilot Test Project Selection for Case Studies Interview Plan

3.4 Data Analysis and Validation 3.5 Case Study Report 4 CASES STUDY ANALYSIS 4.1 Organizational risk management 4.1.1 Risks in Internal Organizational Networks

39 40 42 42 44 44 45 47 48 49 52 53 56 59 61 63 65 68

4.2 Organization Background 4.2.1 4.2.2 4.2.3 Construction Division (A) Construction Division (B) Case Study Overview

4.3 Practical Risk Management in Organization 4.4 Differences Risk Factors between Cases Study 4.4.1 4.4.2 4.4.3 4.4.4 4.4.5 4.4.6 4.4.7 4.4.8 4.4.9 4.4.10 Social Network Knowledge Network Information Network Resource Network Resource Usage Requirements Inter-operability and Co-usage requirements Assignment Network Resource Requirements Precedence and Dependencies Summaryv

4.5 Overall Ranking of Key Organizational Risk Factors 4.5.1 4.5.2 4.5.3 4.5.4 4.5.5 4.5.6 4.5.7 4.5.8 4.5.9 4.5.10 4.5.11 4.5.12 Technology Constraint Time Constraint Resource Scheduling Inaccurate Information Technical Incompetency Lack of Skilled Workforce Delay Major Equipment Insufficient Human Resource Resource Constraint Project Scheduling Sub-quality Resource Lack of Regular Meeting Mistrust between Parties Guideline of Organizational Risk Management

71 73 74 75 76 77 78 79 81 81 82 83 86 86 88

4.6 Activation the Logic Model of Organizational Risk Management 4.7 Recommendation for improvement of DHPIs Projects Efficiency 5 CONCLUSION AND RECOMMENDATIONS 5.1 Introduction 5.2 Research Findings 5.3 Difference Top Rank Risk Factors in Con (A) and (B) 5.4 Overall Risk Factors in Internal Organizational Networks of DHPI 5.5 Recommendation for Organizational Risk Management in DHPI 5.6 Recommendation for Further Study 6 REFERENCES APPENDIX (A) Checklists APPENDIX (B) Analysis results of Checklists APPENDIX (C) Cases Study

89 89 89 90 91 91 92 96102 109

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LIST OF FIGURES FIGURE 1.1 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 3.1 3.2 3.3 3.4 3.5 3.6 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 TITLE PAGE

Major elements in organization 4 Probable outcome of construction project 6 Characteristic of risks in construction 7 Direct and indirect of organizational risks 8 Risk Management process 10 13 Comparison of traditional and modern functional model Risk identification process 15 Strategies to cope with risk 16 Organization risk analyzer 18 28 Research approach Research Methodology Framework 30 Organization risk analyzer 31 Verification risk factors and questionnaire process 33 Verified organizational risk factors 34 Data analysis procedure 37 Location of cases study 43 Limitation of accountability and decision making process 47 Senior Management progress and coordination meeting, Con (A) 51 Weekly Project Meeting, Con (A) 51 Quality control of input Materials in Con (A) 55 Technical incompetency of organization, Con (B) 57 Implemented projects of organization in five decades 59 Percentage of project received required resources in quarterly 60 A part of gantry crane transportation to project 61 Maximum installed capacity in each decade 62 Delay resource of Con (B-1), Kun Project 65 Percentage of organization supported resource in 1st quarter to Con (A) 67 Percentage of organization supported resources in first three quarter to Con (B-1), Kun Project 67 Percentage of organization supported resources in first three quarter to Con (B-2), Phyu Project 68 Logic model of organizational factors and project risk in precedence and dependencies 73 Logic model of organizational factors and project risk in inter Operability and co-usage requirement 74 Logic model of organizational factors and project risk in information network 75 Logic model of organizational factors and project risk in knowledge usage requirement 76 Logic model of organizational factors and project risk in resource usage requirement 78

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FIGURE 4.20 4.21 4.22 4.23 4.24 4.25 4.26 4.27 4.28 4.29

TITLE

PAGE 78 79 80 80 81 82 83 85 86 87

Logic model of organizational factors and project risk in resource requirement Permanent employees of Yeywa Hydroelectric Power Project In May, 2008, Construction Division (A) Experience and education background of employees in organization Logic model of organizational risk factors and project risk in assignment network Logic model of organizational risk factors and project risk in precedence and dependencies Logic model of organizational risk factors and project risk in resource network Logic model of organizational risk factors and project risk in knowledge network Logic model of organizational risk factors and project risk in social network Guideline of organizational risk management Interrelation of risk factors in project organization

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LIST OF TABLES TABLE 1.1 1.2 2.1 3.1 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 TITLE PAGE 2 3 22 36 39 40 42 43 44 45 48 50 52 54 56 59 61 63 63 65 70 71 84 88

Hydropower potential in Myanmar Implemented and commission hydroelectric Power Project of DHPI Sequence of risk due to lack of information Cases study interviewees list Internal network of construction organization Risk factors influencing in network of organization Profile of Organization, DHPI Profile of Construction Division (A) Profile of Construction Division (B) Practical overview of risk management checklist in project organization Data analysis results of social network in Con (A) and (B) Data analysis results of knowledge network in Con (A) and (B) Data analysis results of information network in Con (A) and (B) Data analysis results of resource network in Con (A) and (B) Data analysis results of resource usage requirement in Con (A) and (B) Data analysis results of inter-operability and co-usage requirement in Con (A) and (B) Data analysis results of assignment network in Con (A) and (B) Permanent employees in Con (A) Data analysis results of resource requirement in Con (A) and (B) Data analysis results of precedence and dependencies in Con (A) and (B) Comparison of top ranks key risk factors in Con (A) and (B) Analysis of overall organizational factors influencing project Different parties in Con (A) with their responsibilities Recommendation for improvement of project efficiency

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ABBREVIATION MOEP (1) DHPI CPE NEPS CGGC CNEEC CCYW CHMC Con (A) Con (B) Con (B-1) Con (B-2) DG DDG PD DPD AD SO JEPIC POW Ministry of Electric Power (1), Myanma Department of Hydropower Implementation Colenco Power Engineering Co.ltd (Switzerland) China Gezhouba Water & Power Group Co.,Ltd China National Electric Equipment Corporation Joint Venture Consortium of CITIC Technology Co.Ltd and Sino Hydro Corporation Limited China National Heavy Machinery Corporation Construction Division (A), Yeywa Hydroelectric Power Project Construction Division (B), Kun and Phyu Hydroelectric Power Project Kun Hydroelectric Power Project Phyu Hydroelectric Power Project Director General Deputy Director General Project Director Deputy Project Director Assistant Director Staff Officer Japanese Electric Power Information Center Plan of Work

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CHAPTER 1 INTRODUCTION 1.1 Background In a society, an organization is a social arrangement which pursues collective goals controlling its own performance and has a boundary separating it from its environment. It is difficult to achieve the faultless success by individual effort. To attain the victory from different perceptive for individually or organizationally, all the people must struggle, work, share and understand as well as trust together. Thus collective efforts can accomplish the mission. In the competitive business industry, every organization finds itself in a state of continuous risk. Risk taking is necessary for all construction organization. If one doesnt think big, one loses the capacity to think big. If one does not try the untried, soon the untried becomes frightening and mysterious (Mark, 1993). The risk management of construction organization involves indirect and direct risks. Construction projects are one-off endeavors with many unique features such as long period, complicated processes, abominable environment, financial intensity and dynamic organization structure and such organizational and technological complexity generates enormous risks (Zou et al, 2007). Since the nature of the construction industry is competitive, dynamic, and all projects are unique, the contractors have seriously developed the effective risk management system that they apply when dealing with risks during the life cycle of the project. The more we discover about the nature and level of risk we face, the better we are able to prepare for it (Flanagan and Norman, 1993). Risk events are concatenation, so one problem link to another which may cause to another and so on. Consequently, a major damage is occurred due to a small problem. If the organization fails to access the risk management, the organization will encounter the various sequences of risks directly or indirectly and then it will have adverse effect. 1.2 Climate of Myanma hydropower development Nowadays, according to Myanma Government strategies, the construction hydropower developments in Myanmar is one of the priority for social and economic development and which are developed under the Department of Hydropower Implementation (DHPI), a branch of Ministry of Electric Power (1), (MOEP 1), Myanmar. Because of topography and tropical monsoon climate, Myanmar possess abundant hydropower potential of about 39,720 MW of which about 25,000 MW is of large scale and remaining is of medium and small scale. Due to topography, rainfall and drainage pattern Kayin, Shan and Kayah States on tremendous potential. The table 1.1 shows the hydropower potential of Myanmar (Greater Mekong subregion, Regional power trade coordination committee (RPTCC) meeting, 2008).

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Table 1.1: Hydropower potential in MyanmarUnder 1 MW No. of State and Division Project . Kachin State Chin State Shan State Sagaing State Mandalay Division Magway Division Rakhine State Kayah State Bago Division Kayin State Mon State Taninthayi Division Total Total number of Projects Total Capacity (MW) 17 11 35 5 3 1 6 2 4 3 5 9 101 Total Capacity (MW) 5.33 3.48 10.64 0.806 0.65 0.1 1.915 0.158 1.89 0.864 1.248 1.706 28.787 1 MW to 10 MW No. of Project . 14 2 24 3 2 2 1 2 50 Total Capacity (MW) 48.18 2.8 63.9 13.3 6.25 11 3 19.5 167.93 Above 10 MW No. of Project . 6 1 11 6 9 2 4 4 7 4 2 2 58 Total Capacity (MW) 1852 200 4161 2889 3475 93 804.5 3740 391 16268 254.5 440 34568 Grand Total No. of Project . 37 14 70 14 14 5 10 6 11 8 7 13 209 Total Capacity (MW) 1905.02 206.28 4235.603 2903.106 3481.9 104.1 806.415 3740.158 392.89 16271.864 255.748 461.206 34764.29 209 34764.29

Sr. No. 1 2 3 4 5 6 7 8 9 10 11 12

Myanmar is cooperating with four Asian neighboring countries of Thailand, China, Bangladesh and South Korea in hydropower development, initiating major hydropower projects in recent years (English.people.com.cn, June 6, 2007). India has joined two Myanmar's hydropower projects under a memorandum of understanding (MoU), 2008. (Xinhua). In addition to the projects with the Asian nations, Myanmar is currently giving priority to implementing some six hydropower projects scattered in the country's Shan and Kachin states to increase electricity production and solve the country's power shortage. According to the government's National Investment Commission, the electric power sector dominated foreign investment in Myanmar with 6.311 billion U.S. dollars as of the end of January this year, 2007 (Xinhua). As long as the infrastructure projects like hydropower are high investment, longtime period and complexity, the various kinds of risk are embedding in each phrase of project such as the budget deficit, technical risk, political risk and resource shortages, and etc. encounter during the project life cycle. In case, the maturity of organization is one of the barriers that have come in the way of project implementation. 1. Poor Project Management 2. Lack of Updating of Technical Development 3. Dearth of Competent Indigenous Construction Agencies 4. Lack of Adequate Experienced Construction Manpower (Technical and Managerial) Table 1.2 illustrated the implemented and commission hydropower project of DHPI. Total thirteen hydroelectric power projects were constructed by organization in the past. According

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to a executive said, most implemented project were time overrun.. Alternatively, as for a country, the frequency of developments is low and its necessary to promote the rate of developments. Table 1.2: implemented and commission hydropower project of DHPI No. Commission Hydroelectric Installed Construction Duration Project Capacity Period 1. Be Lu Chaung (2) 168MW 1960-1974 14 2. Kin Tar 56 MW 1981-1986 6 3. Se daw gyi 25MW 1984-1989 6 4. Be Lu Chaung (1) 28MW 1987-1992 6 5. Zaw Gyi (1) 18MW 1993-1995 3 6. Zaung Tu 20MW 1994-2000 7 7. Zaw Gyi (2) 12MW 1995-1998 4 8. Pa Ti 2MW 1996-1997 2 9. Mone 75MW 1997-2004 8 10. Paung Laung 280MW 1997-2005 9 11. Thaphanseik 30MW 1999-2002 4 12. Ye New 25MW 20__-2006 13. Kabaung 30MW 20__-2008 Due to the above reasons, it is necessary to identify the regarding risks for the continuous projects development of organization. Risk management must be a fully integrated part of planning and executing any operation, executing any operation routinely applied by management, not a way of reacting when some unforeseen problem occurs (Mille and Lessard, 2001). According to the SWOT analysis and based on the knowledge accumulated in organizational risk research, generally the construction organization risk is ubiquitous which arises from both internal and external sources. For instances; market, business, political risks are external risks whereas internal risks are organization behavior, communication, competency of human resource and so on. To a large degree, risk is tied to information and knowledge. The better information and knowledge we have, more comfortable we are. Nevertheless, the study only focuses on the internal key risks factors of Project Organization then how the organization risk factors cause the problems and deficiency of construction lead to project delay. To understand organizational risk management clearly, the internal risk factors are identified and analyzed through the meta-metric (Carley and Reminga, 2004). By examining the networks of relations nodes entities in meta-metric, the major factors and their mutual connection is explored and can assess the impact of factors in the project. Generally, these four primary components are related to each others and play as a distinctive way for different purposes during the life cycle of the project. The following figure 1.1 illustrates the general features of the major elements which embedded in the construction organizations.

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Figure 1.1: Major elements in organization 1.3 Problem statement An organization is an amalgamation of relationship, power, authority, roles, activities, and communications. A truly complex framework encompasses people, knowledge, resources and tasks/projects. When we look into it, there have different people with different social, culture and heritage are participating in the constructed project and which is vulnerable to various disputes. Since the organization consists of people with different social and cultural background and different level of knowledge, the skill and expertise of people have been unrecognized and unappreciated. Moreover, it is difficult to synchronize, integrate and connect among different type of knowledge inside the organization. Therefore, it is necessary for organization to set up the proper mechanism of risk management in order to have efficiency of project. According to initial site observation, it is obviously that the practical risk management of organization is poor in project although organization implemented many projects. Therefore, many risks causing construction defect are expected on the efficiency of the project. As aforesaid, most projects of organization were delay so identification the risk factors causing problems is being a crucial which fulfill the deficiency of project development. To great understanding of the organizational risk management, it is required to discover the embedded risk factors causing problem during construction stage. Continuously, it is interesting to realize the interrelation of risks how cause construction delay. Besides once, it is required to highlight the exposure of key risk factors to top management in order to make accurate decision for better improvement of the constructed project.

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1.4 Objectives of the study As the nature of construction organization is the project-oriented organization, the structure reforming of the project is the essential tools for the project success. To arrange the systematic structure, the management must identify the various factors of interlocked networks of the organization and the probability of risks occurrence in the project level then mitigate these. The major objectives of this study are as follow. To identify the risk factors embedded in internal networks of project organization so that systematic approach of the risk factors can be defined. To investigate the rational of organizational risk factors to project risk in hydroelectric power project base on the approach developed. To purpose the recommendation for organizational risk management that is appropriate for construction project organization.

1.5 Scope of the study The study focuses particularly on the internal organizational risk management which is one of the crucial key successes for construction project. The initial stage of this study is identifying the organizational risk factors which influence to the constructed project. The respondents of the study will be the medium and senior management of stateowned company which construct hydroelectric power project. Description of the impact of the organizational risk factors which cause inefficiency of project during construction stage. The study scope will cover construction project oriented organization which act as a main contractor in the infrastructure project.

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CHAPTER 2 LITERATURE REVIEW 2.1 Risk and Construction Risk in a construction project is unavoidable and affects productivity, performance, quality and budget significantly by considering the complex, dynamic and challenging nature of construction projects, however, risk can be minimized, control, transferred, shared or insured. Proper risk management has the potential to reduce the effects of unexpected events. Risk is the possibility that events, their resulting impacts and dynamic interactions may run out differently than anticipated (Miller and Lessard, 2001). Project risk is an uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective. A risk may have one or more causes and, if it occurs, one or more impacts (PMBOK Guide). Constructions custom is more risky than a routine, repetitive business because of long time period, nature of complexity, high level difference of management and employees and modern technology appliance. There are many definitions of risk that vary by specific application and situational context. Risk is defined a state of uncertainty where some of the possibilities involve a loss, catastrophe, or other undesirable outcome (Hubbard, 2007).Construction projects are high-stakes games characterized by substantial irreversible commitments, skewed reward structures in case of success and high probabilities of failure. Figure 2.1 illustrates the probability of project success and outcome of general risks categories in construction firm.

Figure 2.1: Probable outcome of Construction Project Source: http://www.atocrates.com/Atocrates/ProjectOffices.aspx Combining the holistic approach of general system theory with the discipline of a work breakdown structure as a framework, (Flanagan and Norman, 1993) suggested three way of

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classifying risk by identifying the consequence, type and impact of risk. Risk events do not need to have catastrophic consequences, but the commutative consequences add up and can eventually lead to dire results. One common consequence of coping with many small risk events is that if lead to inefficiency of operations. If risk events are not handled properly, we may find that we are continuously redoing things that werent handle properly the first time. Ultimately, this increase the cost of doing business, slow operations, and lead to customer disaffection. The figure 2.2 presents the categories of risks in construction industry.

Figure 2.2: Characteristic of risks in construction 2.2 Organizational risk Every organization is running within the market. There may have many numbers of projects which generate profit for the organization. Organization risk and project risk are intrinsically linked because the organization bears ultimately the potentially losses of the risk events. Organization Risk such as cost, time and scope objectives that are internally inconsistent, lack of prioritization of projects, inadequacy or interruption of funding, and resource conflicts with other projects in the organization (PMBOK, 2000). Organizational risk, broadly defined as the risk that the organizational configuration of a company does not support the achievement of its strategy, therefore becomes vital to manage for companies in the post-industrial era (Jeppesen, 2007). As mentioned previously, organizational risk are multi-dimensional and thus need to be unbundled for clear understanding of causes, outcomes and drivers. In general, the risk management can be divided in to number of risk categories in the constructed project. According to Shrivastava et al., (1988); cited in Smallman, (1996), Human, organizational and technological (HOT) risks, which are frequently directly responsible for crises; and Regulatory, infrastructural and political (RIP) risks, which act as crisis accelerators, and so may be considered as indirect risks. The figure 2.3 presents direct and indirect of organization risk

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Human

Regulatory

Organization

ORGANIZATION

Infrastructure

Technology

Political

Direct Risks

Indirect Risks

Figure 2.3: Direct and Indirect of Organizational Risks Source: Risk and organization behavior (Smallman, 1996) The following are various direct organizational risks which link to the life cycle of the project emerge overtime. All the risks combine together and create turbulence of project. 1. Residual risk 2. Communication risk 3. Critical employee risk 4. Personal interacting risks 5. Performance risk 6. Resource allocation risk 7. Operation failure risk 8. Supplier provisioning risk 9. Construction defect 10. Internal capability Generally, there are three nature risks in large engineering projects; market-related risks, completion risks and institutional risks. Major concerning about the organization is to have expected return for the investment. In order to optimize the expected return, projects must complete within a deadline and definable costs and standards. Construction schedules are affected by uncertainties in weather, productivity, design, scope, site conditions, material delivery time, equipment efficiency, etc (Flanagan and Norman, 1993). Therefore, the

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organization needs to have mitigation for the all risks as well as uncertainty. If the organization fails to take it, the counter sequence will come as potential losses on the organization. As mentioned previously, although the nature of the construction project are high risk, companies and governments are investing in ambitious and demanding large scale construction projects more than ever especially in developing countries. These developments are typically valued in the hundreds-of-millions of dollars (often in the billions), with 5-10 year lifecycles, and attract a high level of public and political interest due to their size, visibility and economic and social impact (Moavenzadeh, 2006). According to Miller et al, 2001, risk can be classified into different type of projects. For example, off-shore platform has technical risks but low institutional risks because of far away from the public attention. Hydroelectric-power projects are moderately difficult insofar as engineering is concerned but they pose high social acceptability because of the environmental impact. Nuclear-power plant project tend to be high technical risk but still higher social and institutional risks. Road and tunnel systems are very risky when user fees are applied, social acceptability difficulties bound. Finally, in urban transport projects are high technical risks as they involve underground geological work so they are necessary to deal with market, social, and institutional risk. 2.3 Managing risk in organization Risk management is a stepwise procedure consisting of risk identification, risk classification, risk analysis and risk response tasks (Flanagan and Norman, 1993). Organizational survival in todays world is achieved by pursuing opportunity within this spectrum of uncertainty and projects are typically launched to take advantage of these opportunities. Thus, the whole point of undertaking a project is to achieve or establish something new, to venture, to take chances, so risk has always been an intrinsic part of project is to achieve or establish something new, to venture, to take chances, so risk has always been an intrinsic part of project work. However, in todays market, with heavy competition, advanced technology and tough economic conditions, risk taking has assumed significantly greater proportions. No one can deny the importance of risk management on modern day projects. Different approaches have been developed by many researchers over the years for project risks, for example project selection, as well as micro-level risks, such as scheduling risks. Risk management, according to the PMBOK (2003), consists of five phases starting with planning and finishing off with monitoring. This process is repeated as cycles throughout the duration of the project. The following figure 2.4 shows the systematic risk management procedure.

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Figure 2.4: Risk management process Each of these processes is further sub-divided into sub-process with PMBOK (2000) clearly showing the inputs, tools and techniques and outputs for each. The fore researcher did many various investigations for the risk regarding financing, contractual, operation risk and insurable risks. It seems to neglect how the organizational risk factors influence the project operation during construction stage. This paper addresses the risk factors specifically focusing in interlocked networks of project organization. To achieve organizations long-term objectives, clearing the residual risks is really important. The managing pressures for enhanced risk assessment and reporting on internal control have increased around the world. The reasoncorporate accounting failures, frauds, internal control violations, and governance failures have been seen in companies and countries that thought they were immune to these events. These risks relate not only to reporting and compliance; they also include strategic and operations risks. Although risk assessment processes generally have improved, inadequate risk reporting in some organizations has led to a failure to fully integrate identified risks into strategic and operational decisions. When planning a merger or an acquisition, for example, how confident can one be about the expected gains without carefully considering all potential risks, including their assessed magnitude and probability of occurrence? Thus, decision-makers need to understand the various organizational risks, to minimize the production cost and unproductive time that can cause significant organizational risks. To increase productive time, managers need good risk reporting systems to integrate risk evaluation into review of performance. Improved organizational risk assessment and internal risk reporting is critical also for senior management and boards of directors, who are responsible for carefully establishing and reviewing corporate processes for identifying, assessing and managing risk. The following are the principle of managing risk in organization. 2.3.1 Communication and Coordination Effective communication and coordination of project team members is a vital role to achieve efficiency of construction project. Lack of communication and coordination support heavily to happen project failures and conflicts and to the dissatisfaction of project team members. Industrial owner studies of failures, near failures and problems with newly constructed projects indicate that at least 25 recent of those failures resulted from poor communication or

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lack of coordination among the project team (Hensey, 1987 cited in quality in constructed project, 1988). Communication Plan The purpose of a project communication plan is to express what, who, how and when information will be transmitted to project stakeholders so schedules, issues and action items can be tracked (Gray and Larson, 2008). The plan of communication is needed to be done by the project manager and project team member since before the project implemented. It may have some change during the implementation to have effective communication. There are four steps of identification make satisfy the communication which are as follow (PMBOK, 2003). 1. 2. 3. 4. Communication planning Information distributing Performance reporting Manage stakeholders

Establishing a proper communication plan can have advantages of project manager to control the flow of information instead of responding to information requests. Moreover it reduces the ambiguous and unnecessary interruptions of project team member, and it can provide management greater autonomy. Coordination Coordination of team members is occurred when multiple actors pursue goals together, they have to do things to organize themselves that a single actor pursuing the same goals would not have to do. It is the act of coordinating, making different people or things work together for a goal or effect. According to the Grant and Baden-Fuller, 1995, these coordination mechanisms include: 1) Rules and directives, 2) Sequencing Routines, 3)Group problem solving and decision making. The effectiveness of coordination mechanisms depends on the existence of common knowledge, including the existence of common language and other forms of symbolic communication (e.g. statistics), the commonality of specialized knowledge, shared meaning, and the recognition of individual knowledge domains (Grant, 1996). Decentralizes design responsibility and increases the potential problems and the need for effective coordination between the different types of systems. The knowledge contained by the coordination tool is the most critical factor for its effectiveness. Internal and external knowledge sharing will be positively related to performance (Cummings, 2001).This knowledge is represented as characteristics of objects and applied to identify several types of problems with preliminary designs and possibly give advice regarding solutions that satisfy the multiple constraints. It also allows the tool to identify detailed criteria that the coordinated construction specific design must satisfy. The knowledge that the tool applies to identify and assist in resolving problems in coordination includes design requirements, construction requirements, and knowledge related to the

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remainder of the facility lifecycle. Although the most visible parts of coordination focus on the geometry and functionality of the systems, perhaps the greatest value added by the process relates to construction, operation, and maintenance of the systems. However, Coordination has many advantages as an analytic concept here. For example, (a) it gives a powerful analytic grip by immediately implying components such as goals and multiple agents, and (b) it encompasses an intellectually coherent set of phenomena. 2.3.2 Inter-firm cooperation Inter-firm collaboration involves explicit initiatives to enhance competitiveness through organization cooperation. Organization may collaborate with one another and with other organizations to integrate in learning production, design and technology deployment of shared areas of shared needs and opportunities. Views on the role of inter-firm collaboration differ significantly on the issue of whether such collaborations should be used to enhance existing knowledge/capabilities of each partner (convergent development) (Beamish, 1997) or to allow access to complementary capabilities of others while focusing on exploitation of existing capabilities within each firm (Dyer and Singh, 1998). Uniqueness of the human asset is high and the value to the firm is high, the firm should develop this asset internally, building a longterm relationship based on mutual commitment (e.g. Intel engineers). 2.3.3 Cross-functional team It is a group of employees from various functional areas of the organization research, engineering, marketing, finance, human resources, and operations, for example who are all focused on a specific objective and are responsible to work as a team to improve coordination and innovation across divisions and resolve mutual problems (Ford and Randolph, 1992).To face today's complex challenges, organization needs to incorporate a wide range of styles, skills, and perspectives. Cross-functional teams are regarded as a means to manage social collaboration and concept creation. Purpose of establishing the cross-functional team in project organization: Design and develop new project; Chose and implement new technologies throughout organization; To improve the service-profit chain, and To control product costs To use the resources effectively To accomplish the objectives efficiently The following figure 2.5 shows the comparison of traditional and modern functional model of project management.

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Figure 2.5: Comparison of traditional and modern functional model 2.4 Practical limitation of risk Management The process of risk Management does not aim to eliminate all risks but to identify appropriate strategies to assist project stakeholder to manage them (Perry and Hayes, 1985). Risk management is defined as a systematic controlling procedure for predicted risks to be faced in an investment or project of organization. Risk management is the systematic process of planning for, identifying, analyzing, responding to, and monitoring project risk (Project risk management hand book, 2007). It involves processes, tools and techniques that will help the project manager maximize the probability and results of positive event and minimize the probability and consequences of adverse event as indicated and appropriate within the context of risk to the overall project objectives of cost, time, scope and quality. According to Murch (2000), several factors can influence the success of risk management as follow. Senior managements expectations about risk - do they understand the value of risk management and, if not, how can they be persuaded? The corporate culture and attitudes toward accountability - is there a culture that can accept the need for accountability? The background, skills, and experience of the project teams - management of risks should be an important skill for all project teams.

Project risk management is an uncertain event or condition that, if it occurs, has a positive or a negative effect on at least one project objective. A risk may have one or more causes and, if it occurs, one or more impacts (PMOBOK, third edition). Project risk management is most effective when first performed early in the life of the project and is a continuing responsibility throughout the projects life cycle. Moreover, risk management encourages the project team to take appropriate measures to:

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Minimize adverse impacts to project scope, cost, and schedule (and quality, as a result). Maximize opportunities to improve the projects objectives with lower cost, shorter schedules, enhanced scope and higher quality. Minimize management by crisis.

Alternatively, sometimes risk management is a temptation to dismiss a risk because we cannot do anything about it anyway. There are no viable mitigation strategies for some exception risks for instances, currency exchange rates, and terrorist attack (9/11) result in an estimated $31.7 billion loss. 2.4.1 Risk Identification

Risk identification is the first step in the risk assessment process. Careful determination of risk, along with analysis and control of the hazards they create results in a plan of action that anticipates difficulties that might arise under varying conditions, and predetermines ways of dealing with there difficulties (Miller and Lessard, 2001). The purpose is to surface risk events as early as possible, thereby reducing or eliminating surprises. As a consequence of risk identification, risk analysts can develop a good sense of possible source of problems (or opportunities) that will affect their organizations projects and operations (Frame, 2003). The organizational risk can be identified by different way. (1) Checklists (2) Brainstorming sessions (3) Issues logs (4) Behavioral models (5) Diagramming techniques (6) Flowcharting project and process models (7) Regular meeting (8) Documentation review (9) Interviewing (10) SWOT analysis (11) External audit Risk identification is a repetitive process because new risks may become known as the project progresses through its life cycle and previously-identified risks may drop out (Project risk management hand book, 2nd edition). Its important to specify the risk correctly. For instance, a risk has a cause and if it occurs and impact on a project objective. Simple and effective risk responses can often be developed and even implemented as soon as the risk is identified. There are many different tools and techniques for practical risk identification as mentioned previously. The figure 2.6 shows the simple risk identification for the project management.

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Figure 2.6: Risk identification process Source: (PMBOK, Second Edition) 2.4.2 Assessing impacts of risk events and evaluation process

The risk analysis and evaluation process is the vital link between systematic identification of risks and rational management of the significant ones. It forms the organization for decision making between different management strategies. The attempt to assay the consequences of aking the occurrence of risk events is called risk impact analysis. As a matter of convenience, risk impact analysis split into two parts qualitative and quantitative analysis. Qualitative risk analysi analysis is the process of assessing the impact and likelihood of identified risks (PMBOK, 2nd edition). It includes methods for prioritizing the identified risks for further action, such as quantitative risk analysis or risk response planning (Project risk management hand book, uantitative 2007). The method intends to examine the impacts of risk events primarily through the application of a logical reasoning process. By finding out the high-priority risks, organizations priority risks can improve the projects performance effectively. Moreover, it is one way to determine the importance of addressing specific risks and guiding risk responses. Generally, the quantitative analysis follows qualitative analysis but sometime it use together. Due to the time and cost constraint, most researchers could not use these together. The qualitative risk analysis is a way of numerically estimating the probability that a project will meet its cost and time objectives. Quantitative analysis is based on a simultaneous evaluation analysis of the impact of all identified and quantified risks. Although there are many tools and technique for the method, Monte Carlo simulation is common run for quantitative risk quan analysis based on the cost complexity or high profile of the project (Project risk management Project hand book, 2007). 2.4.3 Risk response planning

Risk response planning is the process of developing options, and determining actions to enhance opportunities and reduce threats to the projects objectives ((Project risk management

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hand book, 2007). In case, risk identification allows to determine what good and bad things might encounter when undertaking and effort to do something. Risk impact analysis, both qualitative and quantitative provides understanding the impact and consequences of the occurrence of the identified good and bad things. The question; what can be done to deal with the qualified risk events? Risk response planning is concerned with how best to handle risk events that can arise (Frame, 2003). Project Management is the most widely found because for failure to meet project objects and goals within todays project management bodies of knowledge, risk management techniques are evolving as a key tool to maximize achievement of the stakeholder goals (Nielsen, 2006). Generally there have four approaches to mitigate the risks in large engineering projects which those managerial strategies to cope with risks are as follow (Miller and Lessard, 2001). (1) (2) (3) (4) Shape and mitigate Shift and allocate Influence and transform institutions and Diversify through portfolios.

Broad/systemic

Diversify Portfolios of project

Embrace residual risks of ownership

Influence and transform Institutions: rules and regulations Indirect Direct shaping

Type of risks Specific to Project

Direct allocation and mitigation of controllable project

Shifting of indeterminate risks to co-specialized firms

Extent of control over risks

Figure 2.7: Strategies to cope with risks Source: Miller and Lessard, 2001

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2.5 Risks in interlocked networks of project organization An organization can be modeled and characterized as a set of interlocked networks connecting entities such as people, knowledge resources, tasks and groups (Carley and Reminga, 2004). The Metamatric shows ten significant controllable networks to improve efficiency of the organization by setting up the accurate preplanning. Risk management is a process of harnessing information to help people make informed decision (Frame, 2003). If information is lacking, this restricts the amount of effective risk management that can be carried out. The collective power of team members is the critical success factor of the construction project. The effectiveness of coordination mechanisms depends on the existence of common knowledge, including the existence of common language and other forms of symbolic communication (e.g. statistics), the commonality of specialized knowledge, shared meaning, and the recognition of individual knowledge domains (Grant, 1996). Lack of coordination among the cross-functionality which is the bottle neck of the information coordination and knowledge sharing cause the delay in task performing and decision making. The general resourceconstrained project scheduling problem (RCPSP) arises when a set of interrelated activities (precedence relations) is given and when activity can be performed in one of the several ways (modes) (Chelaka L. et.al., 2000). If the required resources are not available on time, the management could not set up the logical dependencies and resources for alternative activities of links. Alternatively, if the workforce could not utilize the existing resource effectively, the performance risk will be occurred in the project. All the above factors are the priority to consider for the efficiency of the project organization. If the organization fails to take these risks properly, the project will move slowly while the organization has to struggle the troubles. Finally, the unity of stakeholders will be broken and the organization will meet unexpected situation. The following figure 2.8 is the organizational risk analyzer including internal organizational networks.

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Figure 2.8: Organization risk analyzer Source: Carley and Reminga (2004) 2.6 Internal organizational networks Organization risk analyzer consists of ten internal organizational networks for organizational risk management. These are 1) Social network, 2) Knowledge network, 3) Information networks, 4) Resource network, 5) Resource usage requirement, 6) Inter-operability and Cousage requirements, 7) Assignment network, 8) Knowledge requirement, 9) Resource requirement and 10) Precedence and dependencies. As mentioned in previous chapter, major four elements play in organization as a vital role in the organization to achieve long-term organization objectives. These can make the either potential loss or gain as well reputation of the organization. In the top management strategies, mitigation the risks is a priority of organization to drive safely in the modern market economy. However, controlling the critical risk factors which is occurred due to the inter relationship among the elements is one of the ways to mitigate the probable risks occurrence. This way enables the organization to run the continuous projects efficiently. The following section will explain deeply about the preferable to control the internal organizational networks in organization.

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2.6.1 Social Network Social network in construction organization is examined how functional department and different interact with each other, characterizing many formal or informal connections in order to have effective communication and coordination. Social network define as social relationship in which the members are the individual actors within networks and ties are the relationships between the actors. The power of social network is assumed by the individual actors whether they are friendly or unfriendly, smart or dumb, etc because 70 to 80% learning may be from informal communication (Davenport and Prusak, 1998). Therefore, informal communication is priority for knowledge sharing and continuous learning for the team members. According to the literature, upgrading knowledge networks is truly depended upon the social relationship inside organization. Communication is the process by which the information is exchanged and understood by two or more people, usually with the intent to motivate and influence behavior (Daft, 2006). These networks provided ways for organization to gather information, deter competition, and even collude in setting policies and strategies. Alternatively, social networks allow members to organize around a persons relationships or interests rather that just focused on objectives. People that know each other (or want to meet each other) will connect by a variety of common interests. These are great tools to get people of like interest to connect to each other and share information. Social network theory is the view that the structure of social relations in which actors are embedded affects their behavior. These effects are assumed to operate at the individual, organizational and even national level (Mizruchi & Marquis, 2005). People are working together to achieve of the organization objective which become their individual objective beyond. To achieve the individual objective, first of all, all must perform with their ultimate effort to complete their respective specific objectives then which becomes the objective of organization target. In order to accomplish organization mission, the project, top management must understand the important of social network how work it is because everything is done by people. Therefore, the basic understanding of personal communication becomes the major concerning for the social network because of the better communication, the better crossfunctionality. Effective cross-functionality is very important for all kind of organization because it plays as a major role of the knowledge sharing and the flowing information. Moreover, members of cross-functional groups also have more opportunities than members of functionally homogeneous groups because each has ties to people in different domains (Ancona and Caldwell, 1992). A primary advantage of the cross-functional structure is that it solves an information processing problem (Davis & Lawrence, 1977; Galbraith, 1971). It creates lateral communications channels not available in the classical bureaucratic form of organization. If the cross-functionality is not working properly, the information will not flow easy and decision making will be slow. At the same time the personal interaction will go down. Consequently, the employee can not use their knowledge to utilize the resource which is defined as performance risk. Besides, no good communication channels are happened due to hierarchy structure which causes the negative effective to the governance structure. According to Daft (2006), centralization and decentralization pertain to the hierarchical level at which

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decision are made. In case we need to consider whether the organization structure is too much centralize or decentralize not. Each of the parties in construction- owner, designer, contractor (or construction manager), and labor- has a distinct culture and way of measuring the success or failure of a construction project (Oglesby et al., 1989).The cultural problem is one of the sources to damage the personal communication channel. Alternatively, Ego is very influence to the personal interaction. Sometime people frustrate because of working environment. There was a dispute between the parties or individually in the construction project and the dispute and some other factors were considerable mistrust between parties and lack of constructive communication about sensitive. Krackhardt (1992) showed that a unionization attempt failed because the key actors union members had a poor understanding of the actual friendship network. If there doesnt have understanding within team members, they become pessimistic to each other sooner as a result their performance is going down because they try to compete in incorrect way. Even a superbly designed work group will not be successful if members cannot create a common, understanding of both the organizational context and the task itself through communication about their work (Steines, 1972). After all the above mentions factors combine together, various disputes will emerge in the project and the negative result is appeared finally from the project. To avoid these situations, all team members must have good communication channels formally or informally. Therefore, the regular meetings and orientation must have for all specific tasks and projects which are very important in order to improve communication and consistence information flowing among project team members. 2.6.2 Knowledge network

It is transferring the individual knowledge from one to another in the project team by defining as the provision or receipt of task information, knowhow, and feedback regarding a product or procedure. The purpose of knowledge sharing is to maximize the knowledge, skills and abilities of the employees. Knowledge sharing is necessary among group members for executing their work effectively. Along with helping to create a common understanding of the work being done, internal knowledge sharing can also increase the awareness of who knows what in the group (Moreland and Myaskovsky, 2000). As work group members share what they know with one another over the course of a project, they should become more efficient at solving problems and allocating responsibilities for the task. However, knowledge sharing is affected by the distance among the members of team because of the reducing time of social or informal communication. According to Cummings (2001), geographic distribution increases, internal knowledge sharing will decrease as well as cross-functionality decreases, internal knowledge sharing will decrease. By the knowledge sharing, within cross-functional groups may access information and resources that being in different geographic locations and representing different functional areas provides.

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The dynamic theory of organizational knowledge creation relies heavily on the idea that an organization's primary role is the integration and explication of tacit knowledge on all organizational levels (Levina, 1999). The main function of organizations in amplifying the knowledge is created by individuals and crystallizing it as a part of the knowledge network of organization. There are four types of interaction to upgrade the organization knowledge network: Socialization (tacit to tacit), Explication (tacit to explicit), and Combination (explicit to explicit), and Internalization (explicit to tacit).The knowledge conversion occurs through the spiral of organizational knowledge creation, encompassing different organizational levels: 1. Sharing of tacit knowledge by a group of individuals 2. Conversion of tacit knowledge in teams into concepts and metaphors 3. Combination of team-based concepts with existing data and external knowledge 4. Articulation and development of concepts until they emerge into a concrete form 5. Dissemination of new knowledge to others within organization Organizational Behavior and Human Decision Processes (Argote et al., 2000) have featured knowledge sharing as a form of task communication in groups and organizations. The barrier of knowledge sharing in organization is peoples boundary spanners. Generally, people do not like to mix with different group and different nature. Therefore, they try to avoid from them as much as they can. If they are being separately longer, their habit becomes their attitude which make boundary to themselves from the group. The transfer of knowledge within the same function (horizontally) is realized by boundary spanners in the organizational level. At the same time, a vertical transfer of knowledge among different organizational functions relies on the use of higher-order organizing principles, sharing of accounting data, and through formal and informal structures (Levina, 1999). Current theory is that knowledge resides in people as well as in products or procedures of the corporation, and this knowledge can be imitated, copied, or transferred through communication (Zander and Kogut, 1995). Knowledge sharing is not constrained to exchanges within and across employees of a company, but can occur between employees and customers, other organizations, or firms in entirely different industries (Hippel, 1988). 2.6.3 Information network

Information network is defined as the transferring required information from one point to another and exchange knowledge by internalization or technology acquisition. It is connections among types of knowledge, metal model. In general, the concept of information is closely related to notions of constraint, communication, control, data, form, instruction, knowledge, meaning, mental stimulus, pattern, perception, and representation. The information of the construction project can specify feasibility studies, drawings, approvals, schedules, specifications, standards, method of works and other documents. According to the International Project Collaboration (White Paper), Collaboration between organizations is at the core of successful of project delivery and depends largely upon the efficient and accurate exchange of drawings documents and correspondence between team members. On the other hand, as projects grow in size and complexity information coordination becomes as critical success factor (Facility Management Magazine Australia, 2006). There is no collaboration within organization mean without the efficient, accurate exchange and

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management of information. In case, managing information can be significant and can potentially support the project success. In construction period, transmitting information within an organization based on informal contacts between managers within an enterprise and on distributed information systems. The effect of not having a sufficient system in place for managing information can be significant, and can potentially derail a project (International Project Collaboration, white paper), the following table 2.1 highlights how this can impact to the project in term of time, cost and quality. Table 2.1: Sequence of risk due to lack of information

Source: International Project Collaboration (white paper), Aconex Due to the risks outlined above, there is a need for large-scale international developments to implement a third-party platform for managing information that allows collaboration between multiple, dispersed team members. 2.6.4 Resource network

It means the continuous resource available for concurrent activities in the construction project. It should be kept in mind that a company is an organization that supports the many projects undertaken by the company, generally in different geographical locations and administered by quite autonomous project managers but relying heavily on the support of the head office. Many problems with real-life projects arise when activities require resources that are available only in limited quantities and the demands of concurrent activities cannot be satisfied (Woodworth and Shanahan, 1998 cited in Abeyasinghe, 2000). Not receiving the require resource on time in order to start the altering the companion of activities is major enemy of the construction project. Lack of require resources lead to construction delay directly. The required for each activity may be allocated individually or may come from other activities that share the same resources (Zhang and Li, 2003). Schedulable activities at a time are combined based on the available resource quantities and all combinations are evaluated according to their impacts on project duration. In case, therefore vendor competence and resource shortage are major hindrances for the procurement to the parallel activities of the project.

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2.6.5

Resource usage requirement

Resource usage requirement is defined combination of personal knowledge of employee and supporting construction facilities to employees in order to optimize the existing resource usage. Technical competency refers to the physical assets of a company such as machinery and equipment and the extent of technical knowhow available that is necessary to undertake specific projects. Improved information flow and flexibility of responses by team members in a matrix can allow resources to be quickly and easily disengaged from unproductive uses and applied to new opportunities as they are discovered (Davis Lawrence et al., 1977). Nevertheless, utilization the resource is depended upon not only the employee competency on specific resource usage but also communication channels and knowledge sharing within the project members. Therefore, the project team members have good communication, and coordination to optimize the available resource usage by preplanning. However, sometime the nature of knowledge (high-technology appliance) and sub-quality of resources play just as the barrier for optimizing resource usage practically. 2.6.6 Inter-operability and co-usage requirement

It means that connections among resources and substitutions to integrate the proper project schedule during execution period. Time constrained resource scheduling in which the time constraints are fixed and seek to resolve capacity overloads by manipulating the timing of activities within their total float, and without affecting the initial project completion time (Matthews, 1994). Resource scheduling problem is depended upon the type of construction project. For example, hydropower project located in the remote area so geological barrier is the main constraint of resource allocation such as mobilization of heavy equipments, resource shortage for high technology equipment such as tunneling machine. Therefore, preplanning resource allocation is necessary to prevent the schedule delay. 2.6.7 Assignment Network

Assignment network is examined assigning tasks to employees inside project and transferring employees within according to the job requirement. There are many factors influence the job assigning in the construction project such as insufficient workforce, job satisfaction, functional workload. Different attitude and behavior make people not to satisfy their new place. Moreover, perceptions of work situations and environments which hinder desire out comes will lead to dissatisfaction with certain aspect of the job (Judge et al., 1995). On the other hand, assigning the incompetency of critical employee in the project make conflict in project due to lack of communication and coordination. 2.6.8 Knowledge Requirements

The knowledge requirements mean the combination of individual competency and supporting relevant document in task performing. The knowledge for the task means shop drawings, schedules, specifications, method of works, standards, procedures and other relevant documents for the constructive design. Providing the right information to the right people at 23

the right time, and helping people create knowledge and share and act upon information in ways will measurably improve the performance of organization itself and its partners. Frequent information exchange or task communication seems crucial for getting work accomplished in many groups and helping them performs well (Allen et al., 1977). 2.6.9 Resource Requirements

Resource requirements means organization supporting the require resource to project to perform the task effectively. Construction managers need to develop activities schedule (Plan of Work) for directing and controlling resources of workers, machines, and materials in a coordinated and time-efficient fashion in order to deliver a project within the limited funding and time available (Halpin and Woodhead, 1998, cited in Lu et al., 2007). Personal compulsory skill of each employee (watch over resource and knowledge) which is required to look over the demand of next task and systematic report to the management is important for the resource scheduling. 2.6.10 Precedence and dependencies It is defined as generation, verification and modification of construction project schedule networks in PERT/CPM (Project Evaluation and Review Technique/Critical Path Method) chart in order to complete within estimated project period. Conventional critical path method (CPM) and program evaluation and review technique (PERT) scheduling procedures start with an assumption of unlimited availability of resources for each project activity (Cooke B and Williams P, 1998). In the real-life project, resource, technology and information are the principle constraints of the task precedence and dependencies. Logical dependencies and resources (e.g., workforce, construction materials and equipments) required when scheduling activities in a construction project. Resource-constrained project scheduling accepts the priority of fixed resource availability and permit not only sequencing and float time to be altered (Matthews, 1994). Generally, this kind of problem occurs when a set of interrelated activities (precedence relations) is given and when each activity can be performed in one of the several ways. The early and late dates calculated with the critical path algorithm are based on the duration of the activities in the project and the relationships or technologies constraints between them (Chelaka L et al., 2000). It is noteworthy that the scheduling logic of deterministic CPM which is necessary to define by activity times, precedence relationships, resource requirements and availabilities. 2.7 Summary System accident is born from the confusion and interrelationships inherent in complex organizations and mechanism. They have been termed normal accidents because they are the unavoidable that comes with running improper systems. Most of the construction project delay because of lack of communication and coordination inside the project organization. Cross-functional teams are regarded as a means to manage social collaboration and concept

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creation. Since different people come from the unlike background, cultural and countries make distinct decisions which cause various disputes in social network. If the conflict cannot solve in the initial stage, it will become the critical risks of the organization. Frequently, consequence of dealing with many small risk events leads to inefficiency of project. If there has no effective action taken in order to mitigate the risk events, we may find that we are continuously redoing things that increase the cost of doing business, slow operations, and lead to customer disaffection which threat to efficiency of the project. As a result, the organization face the commutative consequences add up and can ultimately lead to terrible results. Therefore, top management has to concern about the organizational risk factors which make inefficiency of project.

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CHAPTER 3 RESEARCH METHODOLOGY 3.1 Introduction The research methodology is the guideline which tells a detailed plan or explanation in setting standards for collecting and analyzed in systematic way. It is important to comprehend because the methodology framework which is the backbone of the research studies. Therefore, it has to be explained what appropriate method will be used and why this method is chosen in order to obtain the research objectives. Furthermore, it prevents the prospected and unforeseen problems during the study period. This Chapter shows all of the thesis process in identifying the key risks. However there are three main implementation steps suggested by Ashley and Bonner (1987). It includes three main parts: 1) Information gathering, 2) Organizational risk identification, 3) Qualitative impact assessment. With respect to aforesaid implementation steps, the methodology of thesis is relied on an information gathering composing of reading from relevant literature, interviewing and questionnaire will be discussed. However, the concept of risk identification and analysis will be sued to obtain subjective information. Influence diagram and knowledge map technique will be used as research approach to communicate knowledge among people and to gather or coordinate the fragment pieces of information that are relevant to the event in question. 3.1.1 Selection of Research Method According to Yin (1994), the selection of research strategy depends on three condition consist of (a) the type of research question posed, (b) the extent of control an investigator as over actual behavioral events, and (c) the degree of focus on contemporary as opposed to historical events. In order to obtain the research objectives, there has five major research strategies in the social sciences are experiments, surveys, archival, analysis, histories, and case studies. The strategy chosen to conduct the research is multiple cases study for it is answering what and how research question, no control is required over behavioral events and focusing on contemporary events. The evidence from multiple cases is often considered more compelling and the overall study is therefore regarded as being more robust (Herriott and Firestone, 1983, cited in Yin, 2004). This study involves the solicitation of information from the individuals using questionnaires and interview (structure/unstructured). Thus it is categorized as self report research (Gay, 1990). Besides, this study requires the investigation of the current risk events, rational of risk factor and events, practical limitation of risk management so that case study is the most suitable method to carry out. This strategy gratifies constraints of time, cost and requirements of in depth understanding of the problems. A key strength of the case study method involves using multiple sources and techniques in the data gathering process (Soy, 1997). Furthermore, a case study is an exploration of a bounded system or a case over time

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through detailed, in-depth data collection involving multiple sources of information rich in context (Creswell, 1998). 3.1.2 Research Approach

Research approach is a modeling process. It is the fundamental process in this study. The approach of research consists of six stages of cognitive knowledge. Each part has its own value during the process. The purpose of it is to fill gaps between what is currently and what could be in the future by changing the heuristics over time through various types of knowledge that can be acquired: knowledge, comprehension, application, analysis, synthesis, and evaluation (Arciszewski and Rossman, 1992). Research approach is needed to set up a better job in solving problems. Following research approach will enable researcher to experience specific problem solving technique. It allows researcher to carry out the study from the wide perspective down into detail aspect. The first three processes are proposed to achieve descriptive knowledge which is about identifying general (conscious) heuristics. It helps the researcher to be familiar with the overall general information regarding risk events particularly in hydroelectric power implementation. Analysis process allows the researcher to attain in depth facts and information of the elements in rational of risk factors and their impact hydroelectric power project. The knowledge being acquired here is procedural knowledge which is about identifying routine procedures/ tasks. Structured and unstructured interview, process tracing and simulations are suggested to gain this kind of knowledge. Synthesis and Evaluation processes make use the gathered information, organizing the facts and components in the previous processes to be able to combine all the elements and produce explanations to acquaint the phenomena and to construct judgments based on standards application. Moreover, comments and recommendations will be made. By following these two respective processes, the researcher is able to gather semantic and episodic knowledge. Semantic knowledge is to identify concatenation of risk events. Task analysis and process tracing are suggested to gain this knowledge. Research approach is the effective way to achieve the objectives of the study. It allows systematic approach in order to ensure smooth process, indicate the important aspects, and avoid missing critical data. Additionally, the overall processes support the development of the appropriate recommendations for improvement for each phenomenon revealed. Figure 3.1 shows the process of research for the study.

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Site Observation

Literature Review

KnowledgeKnowledge Description

Comprehension

Organizational Risk Management

Professional Interview ApplicationPractitioner s interviewsVerified factors and Framework for questionnaire design

Procedural Knowledge Semantic and Episodic Knowledge

Analysis

Case Study Practice in real-life Hydropower Projects (Myanmar)

Synthesis Evaluation

Information Comparison

Case Study Results Research Objectives

Figure 3.1: Research approach 3.1.3 Research Methodology Framework

This study is consisted of four main parts: 1) factors identification, 2) data collection, 3) data analysis and 5) conclusion and recommendation. The first part is the factors identification which is being carried out by literature reviews for preliminary factors and verification. Highly concentrated literature review provides the conceptual approach for organizational risk factors in general and the operational elements as the initial risk factors. Verification includes two integral parts: application and analysis. Project organization has own characteristics which distinguish it from parent organization. The knowledge, facts, and information found in literature review then have to be applied into the specific hydroelectric power project. The identification approach and initial risk factors are then being edited and added to adjust to the characteristics of hydropower project. However, the edited risk factors and framework has to be confirmed against the professionals. In this study, case study strategy as one of the qualitative research techniques is utilized to gain the data. Therefore, the first step is to design the question for case study based on the approach edited in the previous process. Utilization of edited approach and factors to design the questions is found to give specific and effective questions in order to gather the require information precisely. The interviews are conducted in 3 places which are Heard Quarter of Department of Hydropower Implementation (DHPI), Yeywa HPP (Construction Division-2)

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and Khun and Phyu HPP (Construction Division-3). Criteria for judging the quality of research design are as followed: 1. Construct validity: determining correct operational measures for the concept being studied by using the evidence from medium to top management people of two hydroelectric power projects regarding organizational risk factors during construction stages. 2. Internal validity by explaining the analysis of data collected from both projects by applying illustrated research approach; what are the organizational risk factors and how it influencing the efficiency of project. 3. External validity: The research design is doing for the same nature of the projects such as hydroelectric power project which are located in the same country and participants in projects are local, European and Chinese so the expected result will appear from both projects in generally. 4. Reliability: The similar results will be come out if the later investigator followed the same procedures and conducted the same case study all over again due to the appropriate research approach. Data analysis from the case study enables the researcher to gain in-depth understanding of influencing factors and interrelationship of risk factors included in internal organizational networks. Each answer for the question between two specific hydroelectric power projects in the case study protocol is examined and compared by pattern matching technique. Then the exploration of overall risk factors is carried by using cross-case synthesis technique. The result is then being thoroughly incorporated to achieve the objectives of the study. The conclusion and recommendation will mention in the final stage which is then given against the dilemma and phenomena found from case studies. The methodology process of the study is in Figure 3.2.

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Figure 3.2: Research Methodology Framework

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3.2 Risk Factors identification Improper arrangement of the organizations structure makes various series of problems affecting on the project-organization. The Meta-Matrix, organization risk analyzer (Carley and Reminga, 2004) is a theoretical framework for representing the various network relations of an organizational system. By using Meta-Matrix as an analyzer can find out the organizational risk factors affecting on the project-organization in term of risks. Moreover, this framework is important to this study because it allows for the definition key risk factors and analysis of the rationale organizational factors to project risks of the study. In the Meta-Matrix framework, organizations are defined by a set of networks under four classifications: personnel, knowledge, resource and tasks/projects. The following figure 3.3 shows the organization risk analyzer which include internal organizational networks.

Figure 3.3: Organization risk analyzer Source: Carley and Reminga (2004)

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3.2.1

Interviewing and verification of initial risk factors

Meta-Matrix network analysis can capture higher levels of complexity and provide specific reason of the problem at different levels of analysis in organization. Expanding the analysis to higher organizational levels will provide increasing benefit to existing. At this step, an interviewing is suggested to obtain subjective factors. This process involves an investigation with all possible potential sources of project risks and their consequences. In addition, their causal interrelationships between each different risk are discussed. The interviewing material includes the characteristics of practical risk management and methodology for collecting data. Objectives of interviewing are to identify the possible risk factors and sub-factors and practical risk management process of DHPI. Major input risk factors are come out from the literature review and professional interviews. Verification of risks factors In this step, selected professionals advice for the required studies materials identifies major gaps in the knowledge base and the simple questionnaire. Then the practical risk factors are judged in hydropower project and the organizational risk management process will be highlight. The objectives of factors validation include the following (Badiru, 1992 cited in Puthamont, 2006): completeness, efficiency, validity, consistency, clarity. This judgment is based on whether all sub-areas have been included, and in the correct proportions. The real practices, phenomena, and important factors are the complementary result from the verification process. Professional interview Since professional interviews are important role on determining the objective achievement of the research, theoretically there are several criteria to be fulfilled by the professionals to be selected. The interviewing is especially for the proper practice of factors applying to the real project. The structured interview was being for the initial factors identification for the research design and questionnaire are discussed with the experienced before going to practice in the cases study. Selected experienced professional is an Assistant Supreme Engineer (Deputy Project Director) of Planning and Work Department in order to make sure the organizational risk factors. The selected professional has 20 years experience in planning and works of DHPI hydroelectric power projects. The interviewee is closer friendship with the researcher and eager interesting in the current study. In the interviews, the researcher discuss about subjective factors related to organizational factors which obtained from the literature review, books and other sources. Finalization the framework of study is made sure by the Project Director of Con (A) after the second interview based on the rational understanding of subjected organizational factors of project organization. The figure 3.4 presents the process of verification risk factors for questionnaire in order to practice in project.

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Figure 3.4: Verification risk factors and questionnaire process : The verification risk factors in project organization is important for the study because the rationale of organizational risk factor to project risk is necessary to find out for the cases study interviews and checklist in order to gather the concrete results of the analysis. Therefore, first results practitioner of verification initial risk factors was from organizational level and then 2nd in practitioners of interviews for verified questionnaires based on verified risk factors was views project director of construction division (2). The following figure 3.5 shows the verified organizational risk factors for the interview and checklist.

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Figure 3.5: Verified organizational risk factors 3.3 Data Collection As most qualitative case studies, this study combined different data collection methods, such as archives, interviews, questionnaires, and direct observations at formal and informal meetings (Eisenhardt 1989). The primary source of information was interviews with individual interviewees from two construction divisions (3 projects). Selected interviewees were selected by randomly for personal interviews from different part of project such as Dam portion, tunneling, powerhouse construction and electromechanical portion. The data is gathered through in depth question following the factors and their relationship identified in the previous process to ensure complete information and details as well as point out the necessary and critical factors. There are many steps to collect data, as follows: 1. Selecting the projects by using the researchers network. Since in depth question interview regarding practical risk management for case studies is very sensitive 2. The researcher applies to the top management for the permission of making interview with employees and site observations in order to avoid the unforeseen barriers in the projects. 3. Contacting the selected respondents either by telephone or official mail to make further appointment as well on site. 4. Staying on sites and conducting the personal interviews and discussions.

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3.3.1

Checklist Design

There are two kind of checklist for comprehend practical risk management of organization and for identify the possible risks considered by professionals from the initial interviewing. What is needed now is to determine their degree of impact to the efficiency of project qualitatively asking in checklist which risk factors already identified are most important in hydropower projects by practicing in real cases. There are 2 types of question include in interview with practitioner in the project. These are 1. Why is the risk happened in the project regarding organization? 2. How does it impact to the project efficiency which leads to delay? 3.3.2 Pilot test

It is an initial run of a study (e.g. an experiment, survey, or interview) for the purpose of verifying that the test itself is well-formulated. The pilot test is conducted for checking the degree of accuracy and reliability of gathered information through interviews, interviewing skills and contents of questionnaire to make possible corrections and preparation for personal interviews. Two pilot tests did to an assistant supreme engineer and a staff officer in order to check the degree of accuracy and reliability of gathered information through interviews, interviewing skills and contents of questionnaire to make possible corrections and preparation for personal interview before practiced in real cases study. 3.3.3 Project selection for case studies

The selected hydropower projects are undertaken by DHP those which are in Yeywa, 790MW (Mandalay Division) and Kun (60 MW) and Phyu (40 MW), Bago Division in Myanmar. Yeywa project is under construction division (2) and the rest projects are under construction division (3). Although the size of projects is quite different, the characteristic is similar to each other due to the kind of hydroelectric power project. Furthermore, they are similarities to technology appliance, climate and participants to ensure similar problem encountered. 3.3.4 Interview Plan

Data collection is carried out in three place 1) Headquarter