Introduction
Risk management is vital tool to keep business liberalization on a positive notion. The management will produce efficient technology based revolution and will intensify global market pressures within the retail sector industry. Managing risks will outcome into commerce and trade flexibility and will enable business enterprises to comprehensively develop their own ideal market strategies. In addition, risk management functions will be expected to complement the value of retail market administration and execution strategies (Bhimani, 2009; Collier et al., 2007). The management of risks in the retail sector will serve a good purpose in support of the critical aspect in retail operations and decision pathways. Risk assessment for contractors will be in crucial state and it needs proper resource allocation of the contractor's strategic views and principles within the retail business and globalization (El-Hawary et al., 2007).
Discussion
The contractors and his team should plan carefully its risk management as there needs to adapt appropriate contingency plan within its core policies for the retail construction to strengthen the business processes. The contractors also will have to gain a stable rank in the market and achieve its mission to become a leader in distributing services and products thereto. The contractors should and must integrate and cover facilities, key employees, data, contracts as well as research and development grounds (Avery and Lynch, 2004). Thus, the mitigation of risks by the contractors should be undertaken well into the corners of control and monitoring strategies where the latter must be maximized to the positive level. The contractors will need also contingency planning in order for the business to safeguard their hard earned profits and protect their shareholder value and worth. The risk team as well should make sure that they are on the right truck in keeping a sound and an effective project team. The contractor also must make sure that the business operations are not out in the global market continuum (Avery and Lynch, 2004).
In addition, contractors must assess the risks for impact and likelihood of the overall project coverage. In this way, management will be properly prioritized and communicated, enabling appropriate strategic actions to be taken well. There will be a need to identify risk participants in the risk assessment process, including risk team experts, project team owners, executive risk team management and construction field personnels (Blakley, Geer and McDermott, 2002). The contractors of the retail project must and should be generating proper solutions and execute effective control systems to gradually avoid imperative risks in the retail industry. There has to be assessment of risk significance to be able to compliment the construction ways and planning zones (Avery and Lynch, 2004). There is a need to create scales to assess the magnitude should the risk occur. There are several qualitative and quantitative techniques to assess significance like in form of ordinal measurement, which qualitatively assigns numbers corresponding to a specific situation, is most commonly used (Groves, 2003).
The risk management is to be present within the internal and external base of the business so that the process of risk management must be sustainable and long term. This will provide contractors with desirable abilities to identify, assess, measure, monitor and report any seen and unforeseen business as well as market risks. This poses a determination of management degree to which the project construction risks are completely mitigated. This has been in accordance with established risk responses that affecting other retail risks in the long run (Avery and Lynch, 2004). The primary safety information must be gathered purposely. This will have to connect and be associated with the contractor base and its risk management philosophies. This will open up commitment to competence, the contractor's style of control, as well as project responsibilities for effective and appropriate risk control thereof (Begley and Boyd, 2002)
The contractors will have to implement such effective risk monitoring process involves several components, including internal audit projects, external auditing and ongoing internal monitoring of key performance indicators. It is important to remember that internal audit projects are driven by the identified risks and the required level of assurance that the board/management would like to have in place. The ongoing risk monitoring needs to be instilled in the organization. Risk management may not be reactive but, an active discipline that includes identifying and managing risk through insuring risk avoidance and control of the risk within the construction field (Liebenberg and Hoyt, 2003; Avery and Lynch, 2004).
Recommendations
The contractor oriented risks may affect vital factors such as location examination, building maintenance, desirable specifications in construction site checking and monitoring. This can be found all over the construction environment, project management zones and agreed pathways of the construction plan. Without knowledge on risk management, contractors will be bombarded with a lot of hazards that may overlap the safety precautions needed in the construction of the retail building. This will also affect the levels of building maintenance, repairs and how the retail owners will respond into the overall site safety of the building. Risk management is necessary, this will allow the contractors of the retail building to be more aware and careful of the constraints, issues and problems that may happen in the retail sites and buildings in the coming future.
The contractors will be avoiding the sad effects of failed construction management by addressing proper activities in order to stay away from the pains of hazards and risks in construction. The retail construction contractors may ideally and effectively connect and link to the following steps for keeping risks inside the box:
- The contractor will need to carefully specify the construction product objectives and its underlying plans including contract scope, construction budget, project scheduling and maintenance, setting up requirements for actual building construction and hiring and selecting project workers such as team leaders, architects and engineers.
- The contractor will need to maximize construction efficiency and its allowable resources of finance, budget allocation. This can be associated with risk control for effective construction labor procurement, heavy equipment and other useful materials for actualizing the plan of construction. This is of course agreed by all parties involved such as the client, engineers, project team and group of auditors, lawyers and other contracting parties and contractors if necessarily needed.
- To cut off risks in construction, the contractors will have to execute, carry out as well as implementing various site operations of the available areas. This will be realized through proper project coordination of the management team as well as control of the construction planning such as in connections to retail designs, finance estimations and careful signing of construction grounded contracts and the entire application of risk assessment in construction start up.
- The contractors will have to foresee upcoming developments of construction projects and contract agreements of involved parties. This will only take place if the contractor is using effective project/clientele communication mechanisms for updating the construction schedules and its intermittent developments or changes in the long run.
In addition, the contractors that will be assigned for retail construction may strongly encounter and face some of the most vital risks in the process of project dealings with the client, the engineers and other manpower involved. This risks can include contract risks as well as risks in finances. These risks well need to be properly managed or resolve in order to avoid other risks that contractors may encounter along the way.
Contract Risk – This is a type of risk that contractors may face like say for example, the contract of the construction is somewhat unfair. This is because the Hong Kong construction industry face a lot of issues like, the industry is supported only by a few retailer or developer and such nominations are only a few. Thus lead management and its time frame is too short. This may cause a serious warning. The contractor will now have to carefully mitigate this type of risk in proper use of materials and resources. The contractor team should be effective in their skills and performance and must have a correct knowledge in the overall process of construction so that contracts will come into the table and the clients will trust them and will give them a good contract or project base.
Financial risk – This is a more serious type of risk for without enough finances, the contractor will fail to realize and implement a certain project in retail industry. This risk involves unpaid contractors and that clients will have to pay their contractors so that the latter can start planning, organizing and hire effective construction team and leaders to do the job on time and on the right track. The contractor may ask for full or partial payments, this is for claiming of progress. Thus, necessary practice is required totally and that the contractor needs to bear the money for the project. In order to avoid this risk, the contractor will need to set up an immediate meeting with the client and the contractor then can arrange and tell his financial projections of the project and in mitigating this risk, the contractor will have to be in the command post and must provide the latest updates for this.
There can be also lack of adequate information and construction experience of the contractors team. The ignoring of these risks puts the contractor in irresponsible status and expect that unrealistic decisions will outcome. On the other hand, identifying and assessing new risks and their relationships is a very complicated, time-consuming and expensive process. This process is almost impossible for the majority of projects, especially when there are inadequate amounts of information and time. When such a complex scenario is faced, identifying and controlling these vital risk factors in overseas projects becomes extremely important. Risk assessment will need to combine risk probability analysis with risk impact assessment. Vital risk response techniques for contractor projects are ideally recognized.
The contractors then will have an obligation to ensure that the large scale projects are in legal contract and that ample money is present to realize the overall construction needs of the client and the rest of the project team. However, contractors are subject to more risk than other parties because of their role complexities. This is through coordinating a wide range of interrelated skills in the field of construction. Thus, development risks, market risks could be shared effectively between the contractors of retail projects.
Conclusion
There must be risk management plan for contractors to adequately resolve troubles in the project process if something happens without intentions or planning. The risk management plan must be actively used during tough times in the overall construction (Tippet, 2003). Therefore, risk management control is fairly vital in contracting of the construction project. The contractors will have to ensure that the industry knew certain liabilities and responsibilities under each project base and contract ways. This will truly meet the construction standards and quality in the process of application and learning.
REFERENCES
Avery, K. and Lynch, G., 2004. How to Improve Your IT Security Policy: A Six Sigma Approach." CXO Media Inc. 2002
Begley, T. and Boyd, D., 2002. Moving Corporate Culture Beyond the Executive Suite. Corporate Governance
Bhimani, A., 2009. Risk management, corporate governance and management accounting: emerging inter-dependencies, Management Accounting Research, Vol. 20 No. 1, pp. 2-5
Blakley, B., Geer, D. and McDermott, E., 2002. IT Security is IT Risk Management. NSPW'01. September 2002
Collier, P.M., Berry, A.J. and Burke, G., 2007. Risk and Management Accounting: Best Practice Guidelines for Enterprise-wide Internal Control Procedures, CIMA Publishing, Oxford.
El-Hawary, D., Grais, W. and Iqbal, Z., 2007. Diversity in the regulation of Islamic financial institutions, The Quarterly Review of Economics and Finance, Vol. 46 No. 5, pp. 778-800.
Groves, S., 2003. The Unlikely Heroes of Cyber Security. The Information Management Journal 37. May/June 2003
Liebenberg, A. and Hoyt, R., 2003. The Determinants of Enterprise Risk Management: Evidence from the Appointment of Chief Risk Officer. Risk Management and Insurance Review 6. Spring 2003
Tippet, P., 2003. Security in Enterprise Systems. The ISSA Journal. August 2003.
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