Sustainability of Construction Companies under Construction Uncertainty and Risks

Abstract

Abstract Modern competitive conditions, economic crisis phenomena and an overall decline in business activity significantly influence the self-regulation of a construction company. This paper is aimed at the following: an author’s definition of the building system stability as the ability to function effectively under changing competitive market environment conditions and the construction volume (load) uncertainty (production and technology, supply and sales, financial sustainability, etc.) The paper presents a simulation of the construction company stability by choosing mutually related rational indicator prediction values - construction indicators regarding the risks of achieving its activity goals meeting the requirements to acceptable process variability. To assess and manage the construction company stability, a classification of risks is given. An algorithm was developed for a set of management decisions to minimize the consequences of external risks. The author’s research findings suggest the following conclusions: - Various types of external risks are the most likely and significant possible damage on construction companies. - At the construction planning stage, to minimize the possible consequences of external risks and uncertainty, organizational and technical measures should be developed. - The main organizational and technical measures to quickly respond to reducing (losing) the stability of construction companies, minimizing the consequences of external risks and construction production uncertainty with regard to the Pareto principle should consist in the practical implementation of a set of measures to align the changed production load with the parameters of the construction company’s production potential - first of all, the specialization level and production capacity.