PROJECT RISK MANAGEMENT QUESTIONS 1 Essay Example

Project Risk Management Questions

Student:

Question 1

Is ‘risk’ part of a wider concept? If so, what is it, and why is risk important to it? (Hint — think about ‘uncertainty’)

In every goal-oriented undertaking that an individual or an entity gets involved in, there is always a desired outcome and a path towards it. A clear plan of actions, resources and people is a basic requirement in planning a project [ CITATION Tre133 l 1033 ]. However, a project is exposed to a certain degree of risk that the plan might not actually work as envisioned. For instance, the resources may not be adequate, the actions might be misguided by inadequate information or people might actually not execute as directed. This implies that risk is part of a wider concept of planning a project, monitoring it, achieving a desired goal and evaluating the success or failure of the outcome to learn and improve [ CITATION New l 1033 ]. With this wider concept in mind, it is possible to understand what a project entails, what might affect it, how it can be controlled and what the expected outcome is.

As noted by Young (2013), every project must have a goal or a desired outcome for which resources, time are to be committed. If everything else in the environment was to be held constant, the desired outcome would be guaranteed. However, this is not always the case as factors in the environment are likely to interfere with one or more elements of a project. This means that it is possible that some uncertain or unpredictable factors in the environment could make it difficult or entirely impossible to achieve an ultimate goal. Such factors might increase the cost of implementing a project within the stipulated timeline. They might as well increase the time required to complete a project. They might as well bring about complexities and frustrations that affect the implementation of a plan. In addition, risks might compromise the quality of the outcome of a project [ CITATION New l 1033 ]. Clearly, the outcome of a project does not only depend on the inputs but also on the control or management of uncertain factors in the environment.

It is critically important to plan for uncertainties in every project. This ensures that the planners understand their goals, what might affect the pursuit of the goals either positively or negatively, and make plans towards accommodating or eliminating such risks. This ensures that the project is able to shield itself from unexpected shocks that might derail or halt the successful pursuit of a goal. Apparently, some risks cannot be prevented from occurring, however, it is possible to take measures that reduce their impact in a project or any undertaking. This saves costs, time and guarantees success to a certain practical degree [ CITATION New l 1033 ].

Question 2

If you were at the start of your project, how would you go about identifying possible risks?

Every project should be envisioned, planned and executed with the integration of risk planning in the entire process. In order to fully understand and mitigate risks, the first step involves identifying possible risks that may threaten a project or present unexpected opportunities. All risks related to a project are identified by engaging the expertise, experience and knowledge of every person in the project conception, implementation and evaluation stages [ CITATION New l 1033 ].

The first step of identifying risks is to outline the ultimate goal and the main objectives of a project. For instance, a project’s goal may be to introduce a new product line in a business product portfolio portfolio. Having established the objectives of a project, it is important to study the environment and establish the uncertain factors that may occur in future and have an effect on the project. Such factors will be analysed in relation to scope, time, quality and cost.

The identified factors will then be categorized into those that are relevant or less important to the project along the dimensions of their likelihood to occur and the probable impact. It is important to note the possibility of a risk arising might be so low such that a business might cautiously ignore it and prioritize its resources and attention towards risks that are highly likely to occur. Notably, some risks might also have insignificant impact on the organization while others might affect it substantially [ CITATION Die16 l 1033 ]. It is important to focus on the risks that might have the greatest negative impact on a business if not planned for.

The identified risks should be documented in a risk register that indicates all the probable risks along the dimensions of likelihood to occur and expect impact on the organization. Greater emphasis should be placed on the risks that are highly likely to occur and have a great impact on the project. The register should as well identify risks that have medium probability of occurrence and have minimal negative impact on the organization. Similarly, risks that are highly unlikely to occur and have less impact on the organization should be identified [ CITATION Die16 l 1033 ].

References