Emirates Journal for Engineering Research, 10 (1), 41-47 (2005) (Regular Paper) 41 RISK ANALYSIS FOR THE MAJOR FACTORS AFFECTING THE CONSTRUCTION INDUSTRY IN JORDAN G. Y. Abbasi 1 , M. S. Abdel-Jaber 2 and A. Abu-Khadejeh 3 1 Industrial Engineering Department, Faculty of Engineering & Technology, University of Jordan, Amman, Jordan E-mail: abbasi@ju.edu.jo 2 Civil Engineering Department, Faculty of Engineering, Applied Science University, Amman, Jordan E-mail: mabdeljaber@hotmail.com 3 Tenders & Purchasing Department, Applied Science University, Amman, Jordan. (Received November 2004 and accepted March 2005) ﺿﻤﻦ واﻟﻤﺼﻨﻔﺔ اﻷردﻧﻴﺔ اﻹﻧﺸﺎءات ﺻﻨﺎﻋﺔ ﺷﺮآﺎت ﻋﻠﻰ ﺗﺆﺛﺮ اﻟﺘﻲ اﻟﺮﺋﻴﺴﻴﺔ اﻟﻤﺨﺎﻃﺮ ﻋﻮاﻣﻞ اﻟﺪراﺳﺔ اﺳﺘﻘﺼﺖ اﻟﻤﺸﺎرﻳﻊ ﻣﻌﻈﻢ اﻟﺸﺮآﺎت هﺬﻩ ﺗﻨﻔﺬ ﺣﻴﺚ ﻓﺌﺎت، ﺛﻼث أﻋﻠﻰ. اﻟﻤﺎﻟﻴﺔ، اﻹدارﻳﺔ، اﻟﻤﺸﺎآﻞ ﺗﻘﺼﻲ و ﺗﺒﻮﻳﺐ ﺗﻢ وﻗﺪ واﻟ اﻟﺒﺸﺮﻳﺔ، اﻟﻘﻮى اﻟﻤﻮارد، ﻔﻨﻴﺔ. اﻷول اﻟﺜﻼث؛ اﻟﻌﻠﻴﺎ اﻟﻔﺌﺎت ﻓﻲ اﻹﻧﺸﺎءات ﻗﻄﺎع ﻟﺸﺮآﺎت اﺳﺘﺒﻴﺎﻧﻴﻦ إﺟﺮاء ﺗﻢ اﻟﻤﺨ ﻋﻮاﻣﻞ ﻟﺘﻘﻴﻴﻢ اﻟﺤﻠﻮل أﻓﻀﻞ ﻹﻗﺘﺮاح واﻟﺜﺎﻧﻲ ﺎﻃﺮ و اﻟﺜﻼث اﻟﺸﺮآﺎت ﻓﺌﺎت ﻣﻦ ﻓﺌﺔ آﻞ ﻣﻊ اﻟﺪراﺳﺔ ﺗﻌﺎﻣﻠﺖ ﻟﻘﺪ اﻟﻤﺨ ﻟﻜﻞ اﻗﺘﺮاﺣﻬﺎ ﺗﻢ اﻟﺘﻲ واﻟﻌﺎﻣﺔ اﻟﺨﺎﺻﺔ اﻟﻤﻼﺣﻈﺎت ﺗﺤﻠﻴﻞ ﺧﻼل ﻣﻦ ﺑﺎﺳﺘﻘﻼﻟﻴﺔ اﻟﻤﺒﻮﺑﺔ ﺎﻃﺮ. ﻋﻼﻣﺔ اﺳﺘﻨﺘﺎج ﺗﻢ ﻟﻠﻤﺨ اﻟﺤﻠﻮل إﻗﺘﺮاح ﺛﻢ وﻣﻦ ﻣﺨﺎﻃﺮة ﻟﻜﻞ اﻷﻋﻠﻰ اﻟﺘﺮﺗﻴﺐ ذات اﻟﺮﺋﻴﺴﻴﺔ ﺎﻃﺮ و اﻟﻘﻀﺎﻳﺎ ﺑﻌﺾ أن اﻟﺘﺤﻠﻴﻞ أﻇﻬﺮ ﻗ اﻟﻤﻬﻤﻠﺔ اﻟﻤﺸﺮوع ﻟﻨﺠﺎح هﺎﻣﺔ ﻋﻮاﻣﻞ ﺗﻜﻮن ﺪ، اﻟﻤﺎﻟ اﻟﺪﻋﻢ ﻟﻜﻞ اﻟﺮﺋﻴﺴﻲ اﻟﻘﻠﻖ آﺎن ﻲ ﻣﻤﺎ اﻟﺸﺮآﺎت أن ﻋﻠﻰ ﻳﺪل ﻋﺎ ﺑﺪرﺟﺔ ﻳﻌﺘﻤﺪ اﻟﻤﺸﺮوع ﻧﺠﺎح اﻟﺪﻓﻌﺎت ﺗﻘﺪم ﻋﻠﻰ ﻟﻴﺔ. This study investigated the major risk factors influencing the upper three classes of the Jordanian construction industry companies undertaking the majority of the projects. Administrative, financial, resources, manpower, and technical problems were investigated. Two questionnaires were conducted for the three construction company classes; one to evaluate risk factors and the other to suggest solutions. The study dealt with each company class independently, analysing the individual and general comments that were suggested for each risk category. A score for each risk was derived. Appropriate solutions for the highest ranked major risks were suggested. Statistical analysis was carried out using SPSS. Analysis revealed that some of the negligible issues could be key project success factors. Financial support was the major concern for all companies indicating that project progress is highly dependent on progress of payments. 1. INTRODUCTION Many risks are associated with construction. The effect of any of these risks can be expressed in terms for monetary loss, property damage, personal injury or a combination. It is important to identify each risk, and find its appropriate solution. Some risks cannot be controlled, such as those due to political factors or the fluctuating exchange rates 1 . In very large projects new risks emerge, adding more consideration to the project size. The liabilities need to be shared in order to encourage the proper implementation, and prompt an economic completion of construction projects. Some risks cannot be predicted as they possess some characteristic unapparent to the construction industry 2 . Risk can be defined as the possibility of loss, injury, disadvantage, or destruction. This definition may cover all types of risks such as technical, cost, and schedule risks. There is also the consideration that acquisition risks such as health, safety, weather, insurance, finance, environment, and policies, are part of and often mingled with other venues of risks 3 . In general, risk management is a practice with processes and methods for managing risks in a project 4 . One of the more useful constructs of risk management is that a risk as a possibility consists of a likelihood and of consequences. This definition is derived from the elementary mathematical concept of expectation of an event. Expectation for some event is defined as the product of its probability of occurrence and its value if it occurs. The probability of occurrence depends on the managers' attitude towards risk, so managers can take risk into account when selecting projects 5 . Risk assessment is an important task if decision- makers are provided with a reasonable method of assessing the potential gains and losses associated with any particular course of action. The risks may be unacceptable, in which case the course of action can either be rejected or a method can be found by which the risks are improved. On the other hand, the risks may be acceptable and the course of action can be pursued with or without any further improvement in the risks. When a method is devised to assess the probability and potential severity of perceived risks,