Preview

Managing Risk: Improving the Business Process

Good Essays
Open Document
Open Document
673 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Managing Risk: Improving the Business Process
Chapter 7 – Managing Risk
Posted on October 6, 2013 by Eko Budiono Tedjo • Posted in Uncategorized • Tagged Budget, Change control, Contingency plan, Project management, Project manager, Risk, WBS, Work breakdown structure • Leave a comment

Rate This

Question 1

1. Project risks can/cannot be eliminated if the project is carefully planned. Explain.

Project risks cannot be eliminated. It is impossible to be aware of all things that might happen when a project is being implemented. Undesirable events identified before the project begins can be transferred, retained/reduced, or shared. Contingency plans with trigger points and responsibility should be established before the project begins.

2. The chances of risk events occurring and their respective costs increasing change over the project life cycle. What is the significance of this phenomenon to a project manager?

The chances of risk events and estimated costs changing over the project life cycle are high. These events will impact project change control mechanisms. Moreover, such changes could be significant enough to require changes in scope. The project manager must ensure that these changes are recorded and kept updated. Otherwise the integrity of the project control system will quickly deteriorate and become useless as a management tool.

3. What is the difference between avoiding a risk and accepting a risk?

Avoiding a risk is changing the project plan in advance so as to eliminate specific risks from occurring while accepting a risk means no preventive action is taken; contingency plans may be used if the risk materializes.

4. What is the difference between mitigating a risk and contingency planning?

Mitigating a risk refers to taking action to either reduce the likelihood that a risk (bad event) will happen and/or reduce the impact the risk has on the project. Contingency planning is developing a response if the risk occurs. Mitigating is
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Better Essays

    Mgmt404 Project Plan
    • 1494 Words
    • 6 Pages

    Mgmt404 Project Plan

    I have made a list of all areas that might cause project delays or failure with their respective outcomes (see numerical list below). The five risks I have chosen…

    • 1494 Words
    • 6 Pages
    Better Essays
    Read More
  • Powerful Essays

    Bus 519 Assignment 3 Final Paper.
    • 1800 Words
    • 8 Pages

    Bus 519 Assignment 3 Final Paper.

    Risk breakdown structure is the hierarchically organized depiction of the identified project risks arranged by risk category (PMI PMBOK). The RBS will prove extremely valuable to better grasp when a project needs to receive special scrutiny, in other words, when risk might happen. The RBS can help the project manager and the risk manager to better understand a recurring risks and concentrations of risks that could lead to issues that affect the status of the project. Following the concept of the Work breakdown Structures (WBS), the Risk Breakdown Structure provides a means for the project manager and risk manager to structure the risks being addressed or tracked.…

    • 1800 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Good Essays

    Unit 6 Assignment 2
    • 878 Words
    • 4 Pages

    Unit 6 Assignment 2

    A closer look to the literature or project risk management standards will make the reader understand that depending on the author of the methodology, the name or the order of these sub-processes is different. Thus, risk identification and risk quantification are sometimes taken together and are called risk assessment or risk analysis; the risk response plan is sometimes met under the name of risk mitigation plan; the risk response plan and the risk control plan are sometimes taken together under the name of risk management plan.…

    • 878 Words
    • 4 Pages
    Good Essays
    Read More
  • Better Essays

    Risk management for Supplier Global Expansion Plan
    • 1150 Words
    • 6 Pages

    Risk management for Supplier Global Expansion Plan

    Risk or threat is common and found in various fields of daily life and business. This concept of risk is found in various stages of development and execution of a project. Risks in a project can mean there is a chance that the project will result in total failure, increase of project costs, and an extension in project duration which means a great deal of setbacks for the company. The process of risk management is composed of identifying, assessing, mitigating, and managing the risks of the project. It is risk management that drives the decisions that may affect the development of the business capability and also the management of the project. . Issues differ from risks, as risks relate to the events that could be revealed or emerge and end up affecting the project's scope, budget, business performance, management objectives and schedule. Risks are measured in accordance to their most probable chance or chances of occurrence and the way that they can impact the program (Hillson & Simon, 2007). Risk can be defined as any kind of trepidation that could significantly impact the capability of the project to meet its scope, budget, change management, business performance objectives, and schedule.…

    • 1150 Words
    • 6 Pages
    Better Essays
    Read More
  • Good Essays

    Case 1.2 Ores Bound Bridge Case Summary
    • 1178 Words
    • 5 Pages

    Case 1.2 Ores Bound Bridge Case Summary

    Why? Risk Management should be an integrated part of the business which the Project Management team surely demonstrated by holding Risk Management to the highest regard from inception to closing. It was clearly a part of every decision made in the project. We learned that risk management should be a ongoing process that is revisited throughout the project and the team followed that protocol to the “T” an example of this at the beginning when the focus was on technical and cost optimization the risks were revisited and focus shifted to schedule along with the risk management processes that had already been established. We see the use of the contingency plans were geared at avoiding or mitigating any identified risks yet supported the project’s main objectives. In addition they were revisited in order to ensure the project stayed on…

    • 1178 Words
    • 5 Pages
    Good Essays
    Read More
  • Powerful Essays

    Risk Analysis Case Study Synaptic
    • 1379 Words
    • 6 Pages

    Risk Analysis Case Study Synaptic

    References: Kendrick, T. (2009). Identifying and managing project risk. (2nd ed., pp.2-89). New York: AMACOM.…

    • 1379 Words
    • 6 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    It Hardware Replacement Project
    • 321 Words
    • 2 Pages

    It Hardware Replacement Project

    Resources: Ch. 11 of Essentials of Management Information Systems. See pages 386 to 394 for information on Project Management. This section covers everything you need to know in this assignment. The assignment must follow APA formatting and use proper citations and references. Include citations of the textbook within the paper in addition to providing a reference page…

    • 321 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Better Essays

    CMGT 411 Week 4 Risk Management
    • 1195 Words
    • 5 Pages

    CMGT 411 Week 4 Risk Management

    Working to understand the risks a project may endure along with the cost associated is critical in every project management plan. Understanding potential risks based on the project type, resources needed, timeline and budget still leaves gaps that creates uncertainty for actually predicating the outcome of the project. There is not a true way to predict when and where a project risk will occur but designing a plan to properly address and manage those risks will increase confidence while eliminating the element of surprise.…

    • 1195 Words
    • 5 Pages
    Better Essays
    Read More
  • Powerful Essays

    Risk Management Plan
    • 2116 Words
    • 9 Pages

    Risk Management Plan

    The Project Management Team will need a proactive approach in the management of risks and related uncertainty. Management of risks for this project will follow a continuous risk management model, refined as the PLC develops. Involvement of support from the business, technical, executive, and external partners is crucial to having a viable risk management process. Tasks will be evaluated and identified for the mitigation of risks; uncertainty of organizational environmental factors will be included in the evaluation of impact and probability, as appropriate. This will ensure that tracking of progress, or lack thereof, occurs and necessary resources are identified for corrective/mitigating actions planned.…

    • 2116 Words
    • 9 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Manage Risk
    • 6382 Words
    • 19 Pages

    Manage Risk

    If an organization does not have a risk plan is likely that any risk occurring with negative consequences occur organization. If the organization has a risk prevention plan is very likely that the risk does not occur and the organization and its workers could produce know how to deal with the negative consequences of that risk to minimize that consequences.…

    • 6382 Words
    • 19 Pages
    Powerful Essays
    Read More
  • Satisfactory Essays

    Risk Assessment
    • 241 Words
    • 1 Page

    Risk Assessment

    Risks can damage projects. They can also increase project costs by setting projects back. By having risk management plans in place, project management teams can be prepared to deal with risks if they occur and attempt to mitigate the risks before they can damage the project (Kyra Sheahan, 2014). Looking at this case, The project risk with the highest impact is putting the project on pause in order to review the project scope, which might in turn lead to cancelling the project. Going over budget, over time, design and technological constraints are also risks to the project but with lesser severity and will on the long run lead to cancelling the project if not mitigated. From the case the project already has a cost estimate of $1,250,000 over the planned budget making the risk of going over budget very likely to occur. It is essential that the top management put all into consideration while giving either time or cost preference over the other risks in order to avoid the cancellation of the project. See appendix for contingency plans that have been put in place to help with any issues encountered through the cause of this project.…

    • 241 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Good Essays

    riskmanagementplan
    • 987 Words
    • 4 Pages

    riskmanagementplan

    The Risk Management Plan describes how risk management will be structured and performed on the project to ensure risk are being managed and controlled at acceptable levels. Risk in a project environment cannot be totally eliminated. The objective of a risk management process is to minimize the impact of unplanned incidents on the project by identifying and addressing potential risks before significant negative consequences occur.…

    • 987 Words
    • 4 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Managing Project Risk and Opportunities
    • 492 Words
    • 2 Pages

    Managing Project Risk and Opportunities

    Risk management is a part of the project management processes. The nature of project management means the processes may be used throughout the project life cycle. For example executing a risk response triggers to identify the risks process to evaluate the impact (PMbok, 2008). The process of a risk management plan is to identify the risk, analyze those risks and monitor and control those risks. The objective is to decrease the probability of a negative event and make sure that they don’t wreak havoc on a program or project. We need to be proactive in our approach to risk…

    • 492 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Satisfactory Essays

    Project Management Assignment
    • 3476 Words
    • 14 Pages

    Project Management Assignment

    Avoiding risk can change the project plan to eliminate the risk or condition such as adopting proven technology instead of experimental technology can eliminate technical failure.…

    • 3476 Words
    • 14 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Sme's Risk Management Abstract
    • 1698 Words
    • 7 Pages

    Sme's Risk Management Abstract

    I understand the nature of plagiarism, and I am aware of the University’s policy on this. I certify that this dissertation reports and results original work by me during my University project.…

    • 1698 Words
    • 7 Pages
    Good Essays
    Read More

Related Topics