Risk in Costruction Industry: The Management and Financial Impact

The present dissertation studies financial impacts of risks in the construction industry, providing one of possible ways of the risks expression and monitoring, through which they can be efficiently managed. Theoretical assumptions and selected methodology provided basis for an overall analysis of the Czech Republic construction market, identifying possible external risks sources including their processing and description. The present dissertation aims at finding major risks and assessing their financial impacts that pose threats to companies active in the construction sector, indeed a specific sector for doing business. These risks have been compiled in a Risk Catalogue intended as a guide for selected risks management. To elaborate on the risks identified, two specific companies have were selected, having provided their data (financial reports, accounts statements, number of projects contracted including their volume and type, personnel information, etc.), as well as key indicators they have been using. The dissertation outcome presents construction sector analysis and Risk Register compilation. The work clearly defines the procedure of the Register compilation, possibly to be used by construction companies with respect to recurrent activities and the risks involved. The Catalogue sorts risks in categories and defines their possible occurrence as well as their financial impact on the company. Furthermore, it presents their possible management, i.e. how they can be minimized or even eliminated, as well as necessary costs involved. Indeed, the costs have to be considered in the sense of financial impacts so that it does not result in covering risks with rather low financial impact