Risk Management in Project Management

This document discusses the importance of risk management in project management. It explores the risks faced in the supply chain and financial sector. It also covers the concept of risk tolerance and the risk management process. Additionally, it provides guidance on preparing a risk management plan for a hydro-electric project.

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Risk Management in Project Management
Name
Lecturer
Course
Date

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Risk Management in Project Management
A. Students are required to reflect on their learning based on the presentations of other students.
(Attached are the presentations of other students, please note that the hydroelectric presentation
in mine, so no need to use it)
During this semester, I got an opportunity to attend different courses each of which left a
positive mark in me. Meaning, the courses equipped with knowledge which have not only
enriched my understanding, but will continue to help me to be an informed and responsive
learner and professional. This course, in particular, was an invaluable one. I not only got to listen
to the lectures, but got to acquire a wide range of ideas from my peers. In this reflection, I would
like to talk about the lessons learnt from the presentations that my colleagues had given out.
In my reflection, I only focus on three presentations. In the first presentation, the major
theme of discussion was the risk management in the supply chain. Here, the student provided a
comprehensive and critical analysis of the risks encountered in the supply chain. According to
the research, supply chain involves a large number of stakeholders each of which operate in
different contexts. This exposes them to a number of risks such as poor inventory management,
unethical business practices, and many more. These, according to the student, are the risks that
hinder the effective implementation of the supply chain (Uta, Helen & Martin 2003). The second
and third students gave moving presentations on the risk management process in the financial
sector. According to their research, the banking sector also has many risks that face it (Badewi
2016). These include the compliance risks, credit risks, operation risks, and market risks. Each of
these risks mater a lot because they determine the success or failure of a business.

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The other important lesson that I learnt from these presentations is that the risks that the
business face differ from one sector to the other. The supply chain is a process through which the
organizations acquire the inputs and supplies that they use in the production process. It faces
unique kind of risks such as the partnering with the business entities that are not committed
towards the observation of business ethics (Larson & Gray 2017). This might not be pleasing
because it might damage the reputation of the organization. The supply chain also faces the risks
of poor inventory management that might occur due to poor time management. The financial
sector, on the other hand, faces different kinds of risks. The ANZ Bank, for instance, has been
facing the risks such as operation risks, credit risks, government policy regulation risks,
economic risks, and market risks. Such risks might contribute to credit defaults, writing-off of
debts, increased costs of operations, ad poor management.
The other important concept that I learnt from the three presentations is that risk tolerance
is an idea that must be factored in the risk management process. Before I attended this course, I
had no idea on what risk appetite is. Now, thanks to the course, I understand that risk appetite is
a degree of acceptable risks. Meaning, even if risk is presumed to be bad, there are certain levels
of risks that an organization can tolerate and accept because it cannot cause much harm
(Fernandes, Hurst, Antony, Turrioni & Silva 2019). It is an important thing to do because it can
enable the businesses to understand the magnitude of the impacts of risks before taking the
necessary measures to deal with the situation. It is, therefore, the responsibility of everyone to
ensure that risk appetite is applied whenever necessary to do so.
Last, but by no means the last, the three presentations changed my understanding on the
risk management process. Although each of them was focusing on different contexts, there is a
common agreement that risk management is a process that is done by following a well-outlined

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procedure (Carvalho & Rabechini Junior 2015). The outline of the risk management process
includes the activities like risk identification, risk analysis, risk response, risk assessment, and
risk evaluation. Each of these stages should be executed as indicated here. Therefore, for the
management to succeed in the mitigation of risks, it must take the necessary measures to ensure
that these activities are done in the right manner. Enough time and resources should be availed
and used to do so (Hopkinson 2017). At the same time, all the concerned stakeholders should be
involved in the process since each of them has an important contribution to make towards the
management of risks (de Carvalho, Patah & de Souza Bido 2015). If I get an opportunity to be
part of the risk management process, I will ensure that I manage the process as outlined in these
presentations.
B. In Session 1, students were required to prepare a brief risk management plan for an
organisation (I prepared the hydroelectric presentation) . Students will now be required to
prepare a risk management plan for the same organisation, commenting on the differences
between what you prepared in Session 1 and what you prepared now. This difference is a
measure of your learning throughout the unit.,
During the first session of this course, the learners got an opportunity to prepare a brief
risk management plan for an organization of their choice. Since the choice of the organization
was bestowed on us, I decided to settle on an organization that specializes in the production of
hydro-electric power (Kliem & Ludin 2019). As a student, I acknowledge that the management
of a hydro-electric project can be a challenging undertaking that requires lots of commitments. It
also involves many risks that are faced in the process of production.

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According to my research, I found out that a hydro-electric project involves the financial
risks (such as increased costs of operations, fluctuating inflation rates, high taxation rates, and
losses); construction risks (such as unavailability of labor, materials shortage, low equipment
qualities, and delay in the acquisition of prerequisite licenses and permits); environmental risks
(such as natural disasters); socio-political risks (such as political stability, legislations, and
ethical business environment); managerial risks (such as leadership changes, and team
management); physical risks (such as vandalism of equipment, theft of equipment, and
occupational risks); legal risks (such as breach of contract and compromised litigation
procedures); and technical risks (such as resource unavailability, change in scope, and design
constraints) (Carvalho, & Rabechini Junior 2015). These are some of the risks that such as a
project must encounter.
In my earlier session, I had identified a risk management plan that, in my opinion, can be
of great help in the management of the identified risks. I strongly believe that a hydro-electric
project is quite sensitive and require a well-organized plan to manage all the risks for it to be
viable. According to my research, an effective risk management for this project should entail the
following activities: risk identification, risk analysis, risk response, risk monitoring, risk
assessment and evaluation (Larson & Gray 2017). Each of these activities must be done because
they mater a lot and can help the management to understand the nature of risks, analyze the
magnitude of their implications, and come up with appropriate measures to deal with them in the
best way possible. However, if I got another opportunity to redesign this plan, I would make a
few changes to it.
In my new plan, I would ensure that I include the following activities in my risk plan:
risk identification, risk analysis, risk response, risk monitoring, risk assessment and evaluation.

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However, the only changes that I will make are to redesign the program and reschedule it. I will
have to create enough time to ensure that each of these activities is executed as outlined in the
plan. Time is a useful resource that must be taken seriously because it means a lot to such a
project (Kerzner & Kerzner 2017). The other change that I will make is to seek for the
participation of many stakeholders. I will take the necessary measures to ensure that all the
concerned stakeholders are involved in the risk planning and management process right from the
beginning up to the very end.

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References
Badewi, A., 2016. The impact of project management (PM) and benefits management (BM)
practices on project success: Towards developing a project benefits governance
framework. International Journal of Project Management, 34(4), pp.761-778.
Carvalho, M.M.D. & Rabechini Junior, R., 2015. Impact of risk management on project
performance: the importance of soft skills. International Journal of Production Research,
53(2), pp.321-340.
de Carvalho, M.M., Patah, L.A. & de Souza Bido, D., 2015. Project management and its effects
on project success: Cross-country and cross-industry comparisons. International Journal
of Project Management, 33(7), pp.1509-1522.
Fernandes, M.M., Hurst, J., Antony, J., Turrioni, J.B. & Silva, M.B., 2019. 18 Steps to Six
Sigma Project Success. Quality Progress, 52(2), pp.16-23.
Hopkinson, M., 2017. The project risk maturity model: Measuring and improving risk
management capability. Routledge.
Kerzner, H. & Kerzner, H.R., 2017. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons.
Kliem, R.L. & Ludin, I.S., 2019. Reducing project risk. Routledge.
Larson, E. W., & Gray, C. F. 2017. Project management: The managerial process. McGraw-Hill

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Education.
Uta, J., Helen, P. & Martin, C. 2003. ‘Supply chain risk management: outlining an agenda for
future research’, International Journal of Logistics: Research and Applications, 6:4, 197-
210.