Risk Management in Enterprise Projects Research 2022

Running head: RISK MANAGEMENT IN ENTERPRISE PROJECTS
RISK MANAGEMENT IN ENTERPRISE PROJECTS
Name of the student
Name of the university
Author note

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Abstract
The research will aim at developing a view on the differences between the risk management
approaches of the federal and the private enterprises on the basis of the nature of the risks and the
resource based capabilities of the organizations. The risk management activities of an
organization are directed towards minimizing the impact of the uncertain events on the overall
activities of the organization. In this connection, the systematic application of the risk
management framework would allow the organization in increasing the efficiency of the business
processes as per the common goals of the business. Therefore, the purpose of the research will be
to demonstrate an effective understanding of the need for risk management and the differences
between the approaches of risk mitigation that are considered by the federal and the private
concerns.

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Literature review
Introduction
Risk management plays an integral role in projects while contributing towards different
developments in the enterprises. Risk management includes different systematic activities that
are facilitated by the organizations with the purpose of identifying, analyzing and mitigating the
uncertainties that are encountered by projects. In this connection almost every enterprise, both
public and private, takes the initiative of developing effective risk management programs with
the purpose of improving the capabilities of the venture. According to Force (2018), risk
management processes that are implemented for projects are different for public and private
enterprises. Project managers take an initiative of identifying different uncertainties with the
purpose of maintaining continuity of their operations of the project. Bullock, Greer and O’Toole
(2019) observed that the risks pose a disruptive value to the projects while interrupting the flow
of operations. In this connection, the project managers take the initiative of developing effective
risk management activities with the purpose of minimizing the impact of the risks that are being
faced by the project while empowering the uninterrupted flow of operations.
Approach of risk management among the federal and private enterprises
The nature of the projects and the capability of the management teams in identifying
analysing and mitigating the risks specifically define the risk management procedures that might
be undertaken by the organizations. da Silva Etges et al., (2018) opined that there are different
standards and procedures for defining the risk management practices in organizations depending
on the type of risks. In most cases, the organizations take the initiative of holding consultation
with external experts with the objective of improving their performance as per the risk

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management practices. Friday et al. (2018) observed that the consultation related activities play
an important role in the project risk management and mitigation activities. However, Tupa,
Simota and Steiner (2017) observed that most of the private sector organizations take support
from the external consultancies with the purpose of identifying and prioritizing the complex
risks. Therefore, the identification, reporting, analysis, consultation, mitigation and controlling
activities are the major activities that are undertaken by the organizations while mitigating a risk
as per the project objectives.
On the other hand, Bodnar et al. (2019) stated that the public or federal organizations take
the initiative of adhering to the Entrepreneurial risk management activities or the standard
ISO31000:2018 with the purpose of developing an effective framework for mitigating the risks.
The major point of difference between the risks management activities of the federal and the
private organizations are reliant on funding and the chronology of the activities. According to
Muriana and Vizzini (2017), all the risk management processes that are initiated by the
organizations are specifically based on three steps of risk identification, analysis and mitigation.
The identification phase specifically aims towards recognizing the risk event in the projects and
are reported by the stakeholders that are experiencing the same to the organization’s operational
head (Bodnar et al. 2019). In this connection, the different risks that are reported in a private
organization are specifically done through the active involvement of the supervisors from the
different departments in identifying and reporting the risks. According to Callahan, C and
Soileau (2017), the active engagement of the supervisors from the different departments of a
project in identifying the risks supports an organization in increasing the efficiency of the risk
identification process. Therefore, the expertise, skills and experience of the supervisors in the

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different departments of work in the project enables an organization in improving their
understanding of the risk context.
Identification of risks in federal and private enterprises
The federal organizations take the initiative of developing an assessment of the
environments and the manner in which the same might affect the rate of operations of the
venture. Choi, Chan and Yue (2016) stated that the assessment of the environments in which an
organization operates specifically enables the same in developing a comprehensive
understanding of the different uncertainties that might be faced by the same while operating as
per the common goals of the venture. Moreover, Demek et al., (2018) observed that a careful
study of the business environment enables an organization in improving the strategic decisions
that are essential for mitigating any sort of uncertainties. The identification of the uncertainties
enables an organization in developing effective strategies for mitigating the risks out of the
projects. In the projects that are undertaken by the private organizations, funding and schedule
are the major risk factors that might affect the capability of the organizations in influencing the
positive outcome of the projects.
The identification of the uncertainties specifically enables the organizations in developing
an idea on the resource and capabilities while allocating the resources as per the project needs.
On the other hand, the public sector organizations or federal organizations specifically encounter
concerns related to absence of collaboration and communication between the different
departments. According to Xia et al. (2018), the identification of different risks that might be
encountered by the organizations while developing a project is an important aspect that
contributes towards the success factors of the project. In most of the case, it has been found that
the absence of risk identification capability of an organization through a pre-developed and

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systematic framework has incapacitated the businesses in maintaining the effectiveness of the
business operations while operating as per the common goals of the venture. According to
Fraser, J. R., & Simkins (2016), the application of the risk management framework or processes
that are outlined in ISO 31000:2018 have specifically supported in developing systematic
activities as per the common goals of the businesses. Therefore, the identification of the risks is
different within private and federal entities. However, it has been observed that most of the
activities that are undertaken by the private and the federal bodies for developing an
understanding of the risks that are similar in different aspects.
Analysis of the risks in federal and private sectors
The analysis or evaluation of the risks on the basis of their likelihood, impact or
consequence is the major activity that is undertaken by an organization as a part of their risk
management initiatives. According to Lechner and Gatzert (2018), the assessment of the risks
on the basis of their impact or consequences allows an organization in minimizing the risk
content while operating as per the common goals of the venture. Likewise, de Oliveira et al.
(2017) observed that the effective risk management constructs in an organization is specifically
reliant on the relentless understanding and prioritizing of risks. The prioritization of the risks in
an organizational setting enables in developing a systematic approach towards strategizing,
allocating resources and working towards mitigating the uncertainty. In this connection,
consultation with the chief stakeholders on the basis of effective reporting is an important
activity that is planned by the organizations.
In a private organization most of the activities that are undertaken by the organization are
based on the effective functioning of the different systems in accordance with the common goals
of the venture. Khan et al. (2016) stated that the assessment of the risks on the basis of

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quantitative and qualitative measures is an important aspects that is being prescribed through the
enterprise risk management systems. In this connection, the federal organization takes the
initiative of consulting with different government agencies and departments with the purpose of
developing efficient risk handling based operations. However, in most of the cases, it has been
observed that the absence of proactive communication between the agencies and departments in
the government organization affected the capability of the businesses in empowering the
effectiveness of the risk management frameworks as prescribed in ISO 31000:2018. The projects
that are developed by the federal or public organizations are specifically reliant on the welfare of
the people in which risk aversion holds a major position. Therefore, most of the federal
organizations take the initiative of creating questionnaire for collecting data and interacting with
the different stakeholders while assessing the risk content of the different activities that are
planned by the businesses.
On the other hand, Krause and Tse (2016) observed that the developments in the private
organizations are specifically reliant on the sustenance and growth of the business itself. In this
connection, most of the risk prioritization related activities in the organization are developed
through collaboration and communication with the different internal stakeholders. The difference
between the consultation process of the federal organizations and the private businesses are
based on the nature and the consequences of the risk content on the projects. According to
Thekdi and Aven (2016), the prioritization of the risks holds a ranking system for the different
uncertainty based on their impact on meeting the organizational goals while undertaking a
project. In this relation, the prioritization of the uncertainties play an important role in
maintaining the effective and systematic strategizing capability of both the federal and private
organizations while creating aversion towards risk content.

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The evaluation of the types of risks that might be encountered by a federal organization
and consultation with the different external stakeholders like the government and other works
agencies under the government allows in improving the prioritization process. On the other
hand, the private organizations take the initiative of consulting with the internal stakeholders.
The internal stakeholders, like the supervisors or the managers, play an important role in the
private organization while identifying, prioritizing and strategizing on the risk content.
According to Kwak, Seo and Mason (2018), the assessment of the risk content and discussion
among the stakeholders on the manner in which the same might be mitigated after prioritization
allows an enterprise in minimizing the impact of the risk in the organizational operations while
adhering to the common goals of the venture. Chapman (2019) observed that the clear
understanding of the risk context and prioritization of the risks play an important role in
increasing the systematic functioning of the different organizations in accordance with the needs
of the venture. In this connection, the federal and the private organizations have a separate rating
system for the risks which enables the same in improving their understanding of the risk content
while prioritizing the same.
Prioritization of risks and strategy formulation in federal and private sectors
The effective prioritization of the risks, classification and strategizing on the same
enables an organization in improving the capability of minimizing the impact or consequences of
the uncertainty to the project outcome. According to Khameneh, Taheri and Ershadi (2016), the
increased risk content and thereby the uncertainties that are left untreated affects the project
outcomes. Therefore, both the federal organizations and the private enterprises take the initiative
of developing evaluation criteria for the risks based on their project objectives and the resource
use. The risk prioritization by the organizations is destined towards enabling the ventures in

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improving the capability of retaining the efficiency of the overall processes while maintaining
the project outcomes. Therefore, the organizations take the initiative of prioritizing the risks as
per their own objectives while reporting the same in accordance with the common standards that
are mentioned in the ISO 31000: 2018. It has been observed that the organizations specifically
develop their set of operations on the basis of the COSO model which specifically aims towards
developing a systematic understanding of the activities that might be considered while treating a
risk.
The strategy formulation phase in the organizations is based on steady links of
consultation with the different stakeholders. In this connection, Choi, Chan and Yue (2016)
observed that the evaluation of alternatives is an important activity that is considered by the
organizations with the purpose of improving their efficiency of mitigating the risk content. The
federal organizations take the initiative of employing a risk analysis and mitigation department
for treating the uncertainties that are being faced by the organization while undertaking a project.
In this relation, specialists take the initiative of collaborating with the organization for devising
different alternatives on the basis of the risk that is being encountered by the business. On the
other hand, the private sector organizations take the initiative of holding collaboration between
the different departmental heads and the operations team for sourcing the alternatives.
According to Fraser and Simkins (2016), the alternatives play a major role in improving
the organizational understanding of the different solutions that might be made by the same while
operating as per he common goals of the venture. Again, Chapman (2019) observed that most of
the organizations fails to hold effective communication with the different stakeholders and
involve the same in the operational processes towards mitigating the risks. In this connection,

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the absence of abundant communication affects the collaborative approach among the
stakeholders which might create disruptions in the risk management process.
The evaluation of the alternatives and choice of the best alternative towards mitigating a
risk in the organizations are based on the value of the project and the resources that might be
spared by the organization. In the case of federal organizations, government funding and
abundance of other resource based capitals are specifically supportive towards upholding costly
risk management mechanisms. On the other hand, the absence of effective resource allocation
capabilities in the private organizations, affect the capability of the same in retaining the
effectiveness of the business operations as per the common goals of the business. In this
connection, Muriana and Vizzini (2017) stated that the differences in the risk management
approach between the federal and the private entities are distinctively reliant on the resource and
capability of the organizations. The effective resource based capabilities of the organizations
enable the businesses in maintaining the effectiveness of the business operations as per the
common goals of the venture.
Monitoring and controlling of risks in federal and private sectors
Lastly, the monitoring and controlling activities that are undertaken by the organizations
enables the same in supervising the organizational performance in relation to the mitigation of
the risk content. Again, the control mechanisms facilitate successive steps that might be
considered by the organizations for continuous development in the business processes.
According to Force (2018), the standard ISO 31000:2018 focused towards integrating a
continuous development process based framework for the organizations with the purpose of
improving the competency of the organizations. In this connection, the federal organizations take
the initiative of facilitating separate departments for looking into the risks that might be

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encountered by the businesses after the implementation of the risk management activities. On the
other hand, the private enterprises takes the initiative of developing specific metrics that are
supervised and monitored by the departmental heads for analyzing the success factors after
implementing the risk management procedure.
Callahan and Soileau (2017) observed that the effective monitoring and controlling
activities enable an organization in improving their capability of increasing the risk management
related efficiency while operating as per the common goals of the venture. The effective
monitoring and controlling activities of an organization permits the same in encouraging the
continuous development of the business processes while empowering the processes as per the
common goals of the project. In most of the cases, it has been observed that the absence of
effective monitoring and controlling activities affects the capability of projects to retain the
outcomes. According to Kwak, Seo and Mason (2018), the monitoring and controlling activities
allow an organization in enforcing continuous improvements in a project that is being planned by
the same while improving the outcome. Therefore, the monitoring and controlling activities that
are undertaken by both the federal and private sectors specifically encourages the development
of the project outcome while contributing to the success factors of the businesses.
Conclusion
Therefore, from the above analysis it might be noted that the different approaches that are
initiated by the project managers in the federal and the private sectors for managing the risks are
different. The differences between the approaches that are employed by the project managers are
reliant on the nature of the risk and the resource based capabilities of the organizations. The
capability of the organizational managers in influencing the efficiency of the risk management
practices is critically reliant on the implementation of the enterprise risk management

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frameworks or the ISO 31000 standards. Therefore, from the assessment it might be stated that
every project encounters uncertainties and the approach that is undertaken by the project
managers are reliant on the nature of the risks and the resource based capabilities of the
organization, which creates a difference between the federal and the private organizations.
Research question
What are the aspects that govern the Risk Assessment and Management in Federal and Private
Sector?

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