Arch 422 Module Week 8 9

3.
2 Risk management
(Week 8)
Professional Practice 3:
Global Practice in the 21st
Century 3
Prepared By: Ar. Jamaica Mae A. Andaya

3.2 Risk management
a. Managing Project Risk and Opportunities
b. Project Disputes
c. Firm Insurance
Professional Practice 3: Global Practice in the 21st Century 3

2nd-semester S.Y. 2023-2024
RISK MANAGEMENT1
Managing Project Risks and
Opportunities
1. MANAGEMENT OF 3. PROJECT OPERATIONS
PROJECT – Responsibility to ➢ ENGINEER
the following ➢ CONTRACTOR
➢ ENGINEERS ➢ SUPERVISORS
➢ CONTRACTORS
➢ LABORERS ➢ SITE MANAGER
➢ ETC. 4. PROJECT CONTROLS
2. PROJECT TEAM ➢ ARCHITECT
➢ DRAFTSMAN ➢ ENGINEER
➢ SUPERVISORS
➢ CHECKER/TIMER
➢ PURCHASER/

Risk management
Risk management is the identification,
evaluation, and prioritization of risks
(defined in ISO 31000 as the effect of
uncertainty on objectives) followed by
the coordinated and economical
application of resources to minimize,
monitor, and control the probability or
impact of unfortunate events or to
maximize the realization of
opportunities

Project risk management
The process of identifying,
analyzing, and responding to any
risk that arises over the life cycle of
a project to help the project remain
on track and meet its goal. Risk
management isn’t reactive only; it
should be part of the planning
process to figure out the risk that
might happen in the project and
how to control that risk if it in fact
occurs.
So, risk management, then, is the process of identifying,
categorizing, prioritizing, and planning for risks before
they become issues.

Positive Risk and Negative Risk
Not all risk is created equally. Risk can
be either positive or negative, though
most people assume risks are inherently
the latter. Where negative risk implies
something unwanted that has the
potential to irreparably damage a project,
positive risks are opportunities that can
affect the project in beneficial ways.

Negative risks are part of your risk
management plan, just as positive risks
should be, but the difference is in
approach. You manage and account for
known negative risks to neuter their
impact, but positive risks can also be
managed to take full advantage of them.

There are many examples of positive risks in projects:
you could complete the project early;
you could acquire more customers than you accounted for;
you could imagine how a delay in shipping might open up a potential window
for better marketing opportunities, etc.
It’s important to note, though, that these definitions are not etched in
stone. Positive risk can quickly turn to negative risk and vice versa, so
you must be sure to plan for all eventualities with your team.

How to Respond to Positive
Risk?

How to Respond to Positive Risk?
Like everything else on a project, you’re going to want to strategize
and have the mechanisms in place to reap the rewards that may be
seeded in positive risk. Use these three tips to guide your way:

The first thing you’ll want to know is if the risk is something

you can exploit. That means figuring out ways to increase the
likelihood of that risk occurring.

Next, you may want to share the risk. Sometimes you alone
are not equipped to take full advantage of the risk, and by
involving others you increase the opportunity of yielding the
most positive outcome from the risk.

Finally, there may be nothing to do at all, and that’s exactly

what you should do. Nothing. You can apply this to negative
risk as well, for not doing something is sometimes the best
thing you can do when confronted with a specific risk in the
context of your project.

Managing Risk throughout the
Organization
Can your organization also improve by adopting
risk management into its daily routine?

Managing Risk throughout the
Organization
Can your organization also improve by adopting
risk management into its daily routine?
Building a risk management protocol into your organization’s culture
by creating a consistent set of tools and templates, with training, can
reduce overhead over time. That way, each time you start a new
project, it won’t be like having to reinvent the wheel.

6 Steps in the Risk Management Process
How do you handle something as seemingly elusive as
project risk management? You make a risk management
plan. It’s all about the process. Turn disadvantages into an
advantage by following these six steps.

1. Identify the Risk
You can’t resolve a risk if you don’t know what it is. There are many
ways to identify risk.
One way is brainstorming with your team, colleagues or stakeholders.
Find the individuals with relevant experience and set up interviews so
you can gather the information you’ll need to both identify and
resolve the risks. Think of the many things that can go wrong.
Make sure the risks are rooted in the cause of a problem. Basically, drill
down to the root cause to see if the risk is one that will have the kind of
impact on your project that needs identifying.

2. Analyze the Risk
Analyzing risk is hard. There is never enough information you can
gather. So, how do you analyze risk in your project?
Through qualitative and quantitative risk analysis, you can determine
how the risk is going to impact your schedule and budget.

3. Prioritize Risks & Issues
Not all risks are created equally. You need to evaluate the risk to know
what resources you’re going to assemble towards resolving it when and
if it occurs.
Some risks are going to require immediate attention. These are the
risks that can derail your project. Failure isn’t an option. Other risks are
important, but perhaps do not threaten the success of your project.

4. Assign an Owner to the Risk
Who is the person who is responsible for that risk, identifying it when
and if it should occur and then leading the work towards resolving it.
That determination is up to you. There might be a team member who
is more skilled or experienced in the risk. Then that person should lead
the charge to resolve it.
Of course, it’s better to assign the task to the right person, but equally
important in making sure that every risk has a person responsible for
it.

5. Respond to the Risk
You’ve found a risk. All that planning you’ve done is going to be put
to use. First you need to know if this is a positive or negative risk. Is it
something you could exploit for the betterment of the project? If not
you need to deploy a risk mitigation strategy.
A risk mitigation strategy is simply a contingency plan to minimize
the impact of a project risk.

6. Monitor the Risk
You can’t just set forces against risk without tracking the progress of
that initiative. That’s where the monitoring comes in. Whoever owns
the risk will be responsible for tracking its progress towards resolution.
But you will need to stay updated to have an accurate picture of the
project’s overall progress to identify and monitor new risks.

You’ll want to set up a series of meetings to manage the risks.
Make sure you’ve already decided on the means of
communication to do this. It’s best to have various channels
dedicated to communication.
Whatever you choose to do, remember: always be transparent.

It’s best if everyone in the project knows what is going on, so
they know what to be on the lookout for and help manage
the process.

Gantt Chart for Risk Management

UNDERSTANDING MANAGEMENT
Management is defined as all the activities
and tasks undertaken for archiving goals
through continuous activities like; planning,
organizing, leading, and controlling.
Management is a process of planning,

decision making, organizing, leading,
motivation and controlling the human
resources, financial, physical, and
information resources of an organization to
reach its goals efficiently and effectively.
Risk management
SAFETY OFFICERS’ TRAINING
➢DOLE REQUIREMENT
- BY-LAWS OF THE LABOR CODE
➢MINIMUM WAGE LABOR
➢INSURANCES (Coverage)

LEVEL OF MANAGEMENT
3 LEVELS OF MANAGER
1. Senior Manager as member of a Board of Directors and a Chief
Executive Officer (CEO) or a President of an organization.
2. Middle Managers
3. Lower managers, such as supervisors and front-line team leaders.
In smaller organizations, an individual manager may have a much wider

scope. A single manager may perform several roleS or even all of the roles
commonly observed in a large organization.
Other Definitions :
➢According to Henri Fayol, "to manage is to forecast and to plan, to organize,
to command, to co-ordinate and to control.”
➢Fredmund Malik defines it as "the transformation of resources into utility.“
Management is included as one of the factors of production – along with
machines, materials, and money.
➢Ghislain Deslandes defines it as “a vulnerable force, under pressure to achieve
results and endowed with the triple power of constraint, imitation and
imagination,operating on subjective, interpersonal, institutional and
environmental levels”.
➢Peter Drucker (1909 –2005) saw the basic task of management as twofold:
marketing and innovation. Nevertheless, innovation is also linked to
marketing(product innovation is a central strategic marketing issue). Peter
Drucker identifies marketing as a key essence for business success, but
management and marketing are generally understood[by whom? as two
different branches of business administration knowledge.

MANAGEMENT
➢Management involves identifying the mission, objective, procedures,
rules, and manipulation of the human capital of an enterprise to
contribute to the success of the enterprise. This implies effective
communication: an enterprise environment (as opposed to a physical or
mechanical mechanism) implies human motivation and some sort of
successful progress or system outcome.
➢Management is equivalent to “business administration” and thus

excludes management in places outside commerce, for example
charities and the public sector.

MANAGEMENT FUNCTIONS
➢Every organization must “manage” its
work, people, processes, technology, etc.
to maximize effectiveness.
➢Mary Parker Follett (1868-1933)
considers management to consist of six
functions:
1. Forecasting
2. Planning
3. Organizing
4. Commanding
5. Coordinating
6. Controlling

MANAGEMENT FUNCTIONS
Planning: Deciding what needs to happen in the
future and generating action plans (deciding in
advance).
Organizing (or staffing): Making sure the human
and nonhuman resources are put into place.
Coordinating: Creating a structure through
which organization’s goals can be accomplished.
Commanding (or leading): Determining what
must be done in situation and getting people to
do it.
Controlling: Checking progress against plans

Basic roles of a Manager
Interpersonal: roles that
involve coordination and
interaction with employees,
Figureheads, and leaders.
Informational: roles that

involve handling, sharing,
and analyzing information
service center, disseminator
Decision: roles that require

decision-making
entrepreneur, negotiator,
allocator

Skills Management
Skills Management skills include:
✓Political: used to build a power base
and establish connections
✓Conceptual: used to analyze complex
situations
✓Interpersonal: used to communicate,
motivate, mentor delegate
✓Diagnostic: the ability to visualize
appropriate responses to the situation.
✓Leadership: ability to lead and to
provide guidance to a specific group
✓Technical: one's particular functional
area.
✓Behavioral: Perception towards others.
PROJECT DISPUTES
Most Construction projects end in disputes. This is why construction
disputes take more time and the efforts of the project management team to
resolve. If solutions such as negotiation do not work, then alternative
dispute resolution methods will be available before a litigation approach is
sought.

Construction projects involve many parties
other than the main parties to the contract.
The employer, Consultants, and Main
Contractor. Subcontractors and Suppliers
are the main parties involved in any
construction project.
It is therefore essential to manage all

parties to the contract with appropriate
project management solutions

PROJECT DISPUTES
Although the construction project is well planned, it can and in disputes
and issues. So, disagreements are common in construction projects.

5 COMMON CONSTRUCTION DISPUTES
1. Errors in Submitting a claim

2. Different Site Conditions
3. Construction Delay
4. Errors in Contract
5. Delay in Interim payments

1. Error in Submitting a claim
Change claims, time extension, prolongation claims. These claims

must be made following the contract.
Poorly drafted claims without proper supporting documents can
be grounds for disputes

2. Different Site Conditions
Bids are submitted based on current site conditions. That is why

bidders are encouraged to visit the site before submitting their
bid evaluation.
When the construction begins, the condition of the site can vary
due to site conditions, sub-surface conditions, and unexpected
structures and obstructions – conditions that can lead to conflicts.

3. Construction Delay
Most construction projects and later than planned. If the

contractor does not perform his duties following the project
program, this may cause a delay to the construction project. This
may lead to disputes and even liquidated damages being imposed
on the contractor if applicable.

Mistakes in the contract or mismanagement in the contract.

Errors in contracts including drawing are another cause of
disputes. But with the right documentation and verification
process these mistakes are easy to avoid.
The contract management process begins with the properly
drafted contract document, if there are errors in the contract
document, they can create grounds for disputes

The contractor must follow the standards and specifications

stipulated in the construction before the delivery, defects and
poor quality result in disputes between the parties.

5. Delay in Interim Payments
Not paying monthly invoices, the employer delays the payment at

the specified time. There is a situation that can create
disagreement between the parties and may lead to suspension of
work.

HOW TO AVOID CONSTRUCTION DISPUTES?
✓Good Project management

✓Good Contract Management
✓Effective negotiation
✓Proper documentation and record.

What is Insurance:
Definition, Benefits, and Types
https://paytm.com/blog/insurance/what-is-insurance-
definition-benefits-and-types/

Insurance is a legal agreement between two parties – the
insurer and the insured, also known as insurance coverage
or insurance policy. The insurer provides financial coverage
for the losses of the insured that s/he may bear under
certain circumstances.

Features of Insurance Coverage
Insurance coverage has the below-mentioned salient features:
1. It is a kind of risk management plan to use an insurance policy as
a hedge against an uncertain loss.
2. Insurance coverage does not mitigate the magnitude of loss one
may face. It only assures that the loss is shared and distributed
among multiple people
3. Various clients of an insurance company pool in their risks.
Hence, they pay the premiums together. So, when one or a few
incur a financial loss, the claimed money is given out of this
accumulated fund. This makes each client bear a nominal fee

Benefits of Insurance Coverage
An insurance policy performs various functions and comes with
multiple benefits. The basic functions of insurance coverage are:
1. Provides Protection
Insurance coverage does reduce the impact of loss that one bears in
perilous situations. It provides monetary reimbursement during
financial crises. It not only protects the insured from financial woes
but also helps in checking the mental stress arising out of it.

2. Provides Certainty
Insurance coverage provides a feeling of assurance to the

policyholders. The insured pays a small portion of the income for
this certainty that will help in the future.

3. Saving Habits
Insurance policies help inculcate saving habits among individuals.

Types of Insurance Coverage
Insurance policies can cover medical expenses, vehicle

damage, loss in business accidents while traveling, etc. Life
Insurance and General Insurance are the two major types of
insurance coverage.

3.3 Inter-Professional
Relationships
(Week 9)
Professional Practice 3:
Global Practice in the 21st
Century 3

3.3 Inter-Professional
Relationships
a. Inter-Firm Alliances
b. Design Team Arrangements


➢ Pertains to the collaboration of two architectural firms
participating on a particular project.
➢ For two firms considering an alliance, the greater the need for
ongoing task coordination and joint decision-making between
the partners in an alliance, the higher the anticipated level of
interdependence and coordination costs.

➢ Each form of alliance governance structure provides differing
degrees of control over and coordination of the activities in a
partnership.
➢ As a result, firms will seek the governance structures or alliances

that will provide the necessary ongoing over-sight and
coordination. The higher the interdependence among partners,
the greater the amount of information they must process while
the alliance is in progress.

Contractual relationships such as alliances can include several
hierarchical elements embedded in their structure, including
1. a command structure and authority systems to put it in place, as
well as systems for certifying which communications are
authoritative,
2. incentive systems that facilitate performance measurement and
link rewards to performance,
3. standard operating procedures that allow quick decisions to be
made by anticipating those decisions in advance

4. dispute resolution procedures that bypass courts and markets by by
specifying a hierarchy of entities or individuals to which appeals can
be made, and
5. non-market pricing systems, such as cost-plus systems, enable
greater precision in remuneration when changes in specification are
made.

4. dispute resolution procedures that bypass courts and markets by by
specifying a hierarchy of entities or individuals to which appeals can
be made, and
5. non-market pricing systems, such as cost-plus systems, enable
greater precision in remuneration when changes in specification are
made.


Most work done by architects is carried out in teams’ settings: project
teams, ownership teams, and special task teams in a firm. The quality of
the teamwork, including team communications, directly affects the
design work of individual architects. Despite the obvious importance of
developing competent, cooperative teamwork, many architecture teams
fall far short in their communications and performance. This topic
explores the roots of these problems and the nature of effective
teamwork. Included in the discussion are explanations of basic team
building, strategies, and skills that can help architecture teams performs
at higher levels of productivity and creativity.

Following are examples of the kinds of team settings in which architects and other
building design professionals often work.
➢ Project Teams.
Most projects involve a team of architects, engineers, contractors,subcontractors,
owners, and users. Effective teamwork on projects contributes to profitability
andquality, as well as greater ability to achieve the original design intent.
➢ Ownership teams.
Teams of principals and partners govern many architecture firms. Ownershipteams
can support positive organizational culture, information sharing between
departments,productivity, and financial performance.

➢ Studios, departments, and markets.
Many firms organize work by studio, department, or market teams that specialize in
a building type or client group. Good teamwork can improve the personnel
assignments, professional development and mentoring, and employee job satisfaction.
➢ Special projects.
Many firms use teams to tackle special projects such as marketing initiatives,
operational issues, and practice opportunities. Successful teamwork on such efforts
can improve the quality and value of project outcomes. Some architects thrive on
teamwork in their practice, while others struggle with it.
In particular, architects who prefer to work as “loners” can be both uncomfortable

and ineffective when it comes to working with a team.

Along with these important advantages of working in teams, groups and teams often face predictable
problems.
➢ Predictable slippage.
Many architecture project and ownership teams suffer from this problem. While all teams have the
potential for synergistic results, many actually suffer from performance slippage.These teams resemble
all-star teams that showcase strong individuals but fail to deliver a strong team performance.
➢ Individual negativity and passivity.
People change their behavior when they participate in a group, and the changes can be worrisome.
People tend to be more critical, negative, and passive in a group that when they communicate in a
one-on-one situation. This attitude can be seen in design reviews, which have the potential to provide
useful criticism but often become so negative that such content is lost.
➢ Individual focus.
Even when a team leader advocates teamwork, many group members are actually thinking, “How
does this affect me?” For example, principals in architecture ownership teams can struggle to balance
their individual interest with the good of the firm.
➢ Groupthink.
Many group suffer from conflict avoidance, premature agreement or short-term or far-from-optimal
thinking. Architecture project teams, for example, may conduct project status meetings that seem well
organized and smooth but actually fail to uncover and address glaring project problems.
➢ Questionable ethics.
Groups and teams of all kinds have the ability to coerce individuals-even individuals with strong
personalities-into “going along” with the group sentiment. This occurs in “oldboy” ownership teams
that systemically neglect problems in the organization of the firm, career development, and
advancement issues and mentoring of younger professionals. Even the most ethicalindividuals can (and
do) strong-arm the weak to get their way.
➢ Ineffective leadership.
Many of the potential problems noted previously stem from ineffective teamleadership. Strong
leadership requires skills for managing group discussions, addressing and controllinggroupthink, and
making passive participants more active.

End of Module
Week 8 & 9


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3.

Prepared By: Ar. Jamaica Mae A. Andaya

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

The first thing you’ll want to know is if the risk is something

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Finally, there may be nothing to do at all, and that’s exactly

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Whatever you choose to do, remember: always be transparent.

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Management is a process of planning,

Professional Practice 3: Global Practice in the 21st Century 3

In smaller organizations, an individual manager may have a much wider

Professional Practice 3: Global Practice in the 21st Century 3

➢Management is equivalent to “business administration” and thus

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

Informational: roles that

Decision: roles that require

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

It is therefore essential to manage all

Professional Practice 3: Global Practice in the 21st Century 3

Professional Practice 3: Global Practice in the 21st Century 3

1. Errors in Submitting a claim

Professional Practice 3: Global Practice in the 21st Century 3

1. Error in Submitting a claim

Change claims, time extension, prolongation claims. These claims

Professional Practice 3: Global Practice in the 21st Century 3

2. Different Site Conditions

Bids are submitted based on current site conditions. That is why

Professional Practice 3: Global Practice in the 21st Century 3

Most construction projects and later than planned. If the

Professional Practice 3: Global Practice in the 21st Century 3

Mistakes in the contract or mismanagement in the contract.

Professional Practice 3: Global Practice in the 21st Century 3

The contractor must follow the standards and specifications

Professional Practice 3: Global Practice in the 21st Century 3

5. Delay in Interim Payments