An effective risk management process encourages the construction company to identify and quantify risks and to consider risk containment and risk reduction policies. Construction companies that manage risk effectively and efficiently enjoy better decision making, financial savings, greater productivity, and improved success rates of new projects.
Risk management in the construction project management context is a comprehensive and systematic way of identifying, analyzing and responding to risks to achieve the project objectives. The research results show that in the adoption of risk management practices, Lithuanian construction companies significantly differ from construction companies in other foreign countries. To management the risk effectively and efficiently, the contractor must understand risk responsibilities, risk event conditions, risk preference, and risk management capabilities.
The lack of experience makes it very difficult to change Lithuanian contractors' attitude towards risk management. Nevertheless, they need to include risk as an integral part of their project management. In our view, the use of risk management in the Lithuanian construction industry is low to moderate, with little differences between the types, sizes and risk tolerance of the organizations, and experience and risk tolerance of the individual respondents.
Qualitative methods of risk assessment are used in construction companies most frequently, ahead of quantitative methods. In construction project risk management, risks may be compared by placing them on a matrix of risk impact against a probability. Mitigation options are then derived from predefined limits to ensure the risk tolerance and appetite of the construction company.
The risk management framework for construction projects can be improved by combining qualitative and quantitative methodologies of risk analysis.