Project Management: Strategies for Risk Management

Running head: PROJECT MANAGEMENT
PROJECT Management
Name of the Student
Name of the University
Author Note

1PROJECT MANAGEMENT
Table of Contents
Major risk of the project:............................................................................................................2
Variation in Milestones..........................................................................................................2
Budget Restrictions................................................................................................................2
Delivery of resources.............................................................................................................2
Stakeholders Satisfaction.......................................................................................................3
Setbacks: unexpected events..................................................................................................3
Risk assessment form:................................................................................................................3
Risk response matrix:.................................................................................................................6
References:.................................................................................................................................9

2PROJECT MANAGEMENT
Question 1:
Contingency is the amount of the contract value that is set aside to deal with the
variation or the unpredictable change in the scope of the project. It might be initiated either
from the contractor side or from the owner side as well (Reijonen et al. 2015). The contractor
considers this for estimation of the contract value and the owner considers this as a risk
management tool to deal with the financial risk of the project.
No project is perfect and it need to deal with the project related risk for which both
the owner and the contractor are accountable. One of the major risk of any project is financial
risk and contingency is regarded as one of the effective strategies of the risk management
plan (Bocken and Short 2016). However any unspent contingency or reserve might encourage
unethical practises at time, especially in cost management and reporting.
First of all the owner might not include the contingency or reserve in the actual cost
management plan and due to this, this cost might be hidden from stakeholders and the project
sponsors (Laukkanen 2015). Now based on the motive of the project owner there might be
some associated action. The owner might not credit this amount to the project fund and
consider it for personal financial gain.
Secondly this might also happen that the contingency is showed in the actual cost
management plan and it is clear to every stakeholder and the plan is transparent to all
(Porterfield 2015). Now if the amount is not spent, the project owner in association with the
contractor might report to the project sponsors that the contingency that has been planned has
been spent accordingly in the project and might include that in the project closure report too.
The owner might also report that the amount or reserve has been spent as the contractor was
not able to comply with the project scope and change was needed for that (Porterfield 2015).