Survey of Risk Management in Major U.K. Companies

Abstract

Risk management consists of five stages, which are essential to the success of a major project. These five stages are identification, analysis, evaluation, response, and monitoring. The variations in using such risk management practices are considerable and are dependent on numerous factors such as the industry sector. This dependency is investigated and presented in this paper. Over 100 companies within the construction industry and oil and gas operators in the United Kingdom were surveyed through questionnaires that elicited information on the size and range of activities of the company, the techniques of risk analysis currently being used, the company's policy on responding to risk, as well as identifying specific risks encountered during any particular project. This paper highlights the vital conclusions accumulated from an analysis of the responses to the various sections of the questionnaire. The main conclusions from this paper are as follows: Personal and corporate experience and engineering judgment are the most successful qualitative techniques; expected monetary value, expected net present value, sensitivity analysis, and decision analysis are the principal quantitative techniques; and risk reduction (through staff training and education and the improvement of working conditions) is the most popular method of responding to risk.