Risk Management Business Report

This report highlights the risk management areas in Olympic Games, focusing on London Olympics 2012. It discusses the key risk areas, multi-stage risk management process, and individual risks with mitigation strategies. The report concludes that risk management in projects of great magnitude is crucial and the multi-stage model is effective for managing risks in events of such stature.

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Risk Management Business Report
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Executive summary
This is a report which will highlight the risk management areas in Olympic and will focus on
the study of London Olympics 2012. The key risk management areas will be highlighted in
the study and will consist of multi stage risk management system that will be suitable for the
processes. The final part of the report will comprise of identification of individual risks, their
evaluation and potential mitigation strategies. Thus, it can be concluded form the study that
risk management in projects of great magnitude is very important. The multi stage model, the
highlighted issues and the mitigation techniques provides an overall picture of a successful
project management story. The London Olympics were a success even though there were
some ups and downs and provide great example for other sport events of such magnitude.
Moreover, the multi staged risk management model mentioned in the report is an effective
model which should be used for effective management of risk in holding events of such
stature. Thus, it can be inferred that London Olympics were a success and it has shown other
countries how to organize an event by overcome major adversities in the surrounding
environment.

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Table of Contents
Introduction................................................................................................................................3
Three key risk areas involving risk management of an Olympic Games..................................3
A multi-stage risk management process....................................................................................7
Four individual risks, their evaluation and potential mitigation strategies..............................12
Conclusion................................................................................................................................14
References and bibliography....................................................................................................16

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Introduction
This is a report which will highlight the risk management areas in Olympic and will
focus on the study of London Olympics 2012. The key risk management areas will be
highlighted in the study and will consist of multi stage risk management system that will be
suitable for the processes. The final part of the report will comprise of identification of
individual risks, their evaluation and potential mitigation strategies. Risk management is a
process of managing any form of uncertainty which may cause hindrance to smooth
execution of a project, event or an organization. The preparation of an event such as
Olympics consist of various kinds of risk factors due to the time span of the project, and
magnitude of resources and processes involved in it. Thus, risk management is a proactive
process which tends to identify all the risks involved and mitigating them with effective
strategies.
Three key risk areas involving risk management of an Olympic Games
Each and every human endeavor that takes place involves some kind of risk. It is
based on how that is dealt with do the venture get its success or failure. This implies that
there exists no perfect project in which all risks can be recognized and resolved. Risks cannot
be avoided nor can they be solved completely. They can only be mitigated and then either get
transferred or shared to any other section of the project or just get retained. The project’s
success is based on the degree to which the project team analyzed the risk (Pritchard and
PMP 2014). The parameters of time, cost and quality are what determine the success of any
project, even though they are subject to risk or uncertainty. Inside major sporting events, risks
are an inevitable factor, all due to their duration, costs and complexity, and being subject to

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unexpected events, setbacks and numerous uncertainties. In this context, management of risks
can be considered to be a proactive process, which includes assessment of all possible risks of
the vent and the stakeholders by means of strategic anticipation, prevention, and
minimization and planned responses for mitigation of those recognized risks (Sadgrove
2016). The main three key risk areas involving risk management inside a project of a huge
magnitude like the Olympic Games are discussed below:
On time delivery
Big projects like the Olympic Games contains a lot of separate but all interdependent
projects. Any effective project management works based on the three major parameters of
cost, time and quality. If any changes take place in any of these three parameters then the
other two also gets affected. Thus this implies a delay in the delivery of any of the elements
inside a project would put a pressure on the quality and/or the cost. Generally for releasing
the pressure on cost and quality that happens because of the delay in delivering the project is
weakening the negotiation position. However, in a big project like the Olympics, these kind
of adjustments are not possible. This is due to the fact that any kind of delay can influence the
theme of the project. Thus for getting rid of all such issues, the project planning was done
very carefully in the initial stage and the project was kick started by starting the individual
and non-interdependent works at the same time and by the achievement of all the milestones
in project at regular and prep-determined intervals. Then meeting is arranged between the
representatives of all the main stakeholders for making sure that every one of them is
satisfied with the progress made for attaining all the milestones within the given time. The

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Olympic Games has a high profile nature and has an immovable deadline that implies that it
needs to be managed effectively and shared (Kendrick 2015).
Budget
One major risk in such a big project is the budget, which needs to be properly
determined and effectively managed. This risk has got the maximum probability of going
wrong and it requires effective management hands and effective methods for dealing with.
Therefore a very strong financial management is required to be set up on an important basis.
The requirement of maintaining extensive and proper resource registers that assists in
transferring the resource later on towards the completion of the project and their requirement
for stronger contract management arrangements, with extensive contract records and
payments that are made simply according to certified work carried out, is of extreme
importance for keeping in track with the income and the expenditure of the project (Hopkin
2017). In the end, the actions that are necessary for managing the risks are deciding a budget
for the project and making sure the way it is funding, along with being sure regarding the way
the cash flow requirements would be met with, being transparent regarding the associated
costs of delivering the games and the way of capturing this amount on a consistent basis. For
projects of such big magnitude, financial risks and maintaining the budget comes at the
forefront of the mind. The management has a duty of caring for demonstrating that they were
properly managing this in an effective manner and achieving the savings with the help of
sound risk management (Kardes et al. 2013).
Health, safety and security

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In big projects like the Olympics, some of the best athletes face the issue of falling ill.
In the wake of this, excessive focusing on such illnesses at the time of the games has much
negative psychological impact on the whole team. Problems related to food and nutrition for
the people located outside the Olympic village also happens. For maintaining better access to
teams at the time of general training and preparation and improved attention to the athletes
with special needs, a different situation needs to be created. There must be routines in place
for handling contingencies. At the time of the games and construction of the project, security
plays a key role. Security measures include taking care of CCTV, perimeter guarding, fencing
and so on. In the security scope changes would at all times be liable and at some extent
unknowable. Changes in threats can imply a scope change like building of resilience and
hostile vehicle mitigation. During the construction, around 10, 0000 workers are generally on
site. The risks involved in such situations involve working at heights, handling heavy
machinery, hot working situations, tunneling and underground works, and demolition and so
on (Hanstad 2012).

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A multi-stage risk management process
The three stages of risk management process are as follows:
 Identification
 Assessment
 Control
Risk register is the tool used for identification of the risks in the project management
processes. Risk register will store all the identified risk during the commence and execution
of the processes. The identified and the stored risks will be graded according to their
seriousness and the likelihood of occurring. Thus, depending upon the data in the risk register
the project management team will have to take measures for mitigation of risk (Marcelino-
Sádaba et al. 2014). The constituents of risk register are as follows:
 Exclusive identifier of each of the risk factors
 Explanation of each of the risk factors and an account of their impact on the project
 Likelihood of their occurrence and their seriousness
 Identifying people responsible for managing each of the risk factors
 Grading each of the identified risks
 Overview of the mitigation processes
Assessment will consist of evaluation of the risk register that has been developed in the
previous stage of the process. Thus, this stage will assess the likelihood of each of the risk
processes and the seriousness of the impact of each of the risks on the success of the overall
project and the individual processes. Thus, the risk levels will be calculated in this process

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and each of the risk factors will be identified individually and then all of the risks levels will
be added up to calculate risk load. The significance of risk load is to identify the impact of
the risk factors on the overall processes of the project. Thus, effective mitigation processes
can be applied depending upon the severity of each of the risk processes (Haimes 2015).
Control process will consist of development of risk mitigation plans and actions. Risk
mitigation will comprise of plans designed for the elimination and reduction of risk at an
acceptable level. There are certain risks which cannot be completely mitigated so the control
process will reduce it to such a level so that the impact will be quite less. However, it
essential to evaluate the cost and feasibility of each of the mitigation strategies so that it does
not increase overall cost of the project (Wolke 2017).

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Figure 1: Risk management process
Source:
The risk identification process needs to be repeated as these sources of information
change and new information becomes available. There are numerous ways to method risk
identity. feasible tactics are (1) to perceive the foundation causes of risks—this is, discover
the undesirable events or things which could go incorrect and then discover the capacity
impacts at the assignment of each such occasion—and (2) to pick out all the crucial features
that the challenge need to perform or desires that it need to reach to be considered a hit and
then pick out all the possible modes by using which those features might fail to carry out.
each procedure can work, but the challenge team may additionally discover it simpler to
perceive all of the elements that are crucial to achievement, after which paintings backward
to identify the things that may pass incorrect with each one. Risk identification should be
executed early inside the venture (starting with pre-project planning, even earlier than the
initial concept is approved) and need to continue until the challenge is finished. hazard
identification isn't always a specific technology and therefore ought to be an ongoing
technique for the duration of the undertaking, especially as it enters a new section and as new
employees and contractors carry different reports and viewpoints to danger identification.
Because of this, the DOE project director need to ensure that the task risk control plan
presents for periodic updates (De Bakker, Boonstra and Wortmann 2014).

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Figure 2: Multi stage risk model
Source: (De Bakker, Boonstra and Wortmann 2014)
Risk management will have to be incorporated in the process of the project as it will
operate within the project function. The risks that has been identified will be evaluated by the
main team for review, compliance and update. Thus, each of the risk factors will be reported
by the project team to the central team who will consolidate each of the risk management
programs. This multi-level risk management procedure shows that various risk management

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processes used in each of areas of operation. Moreover, there are sub division to each of the
risk processes in the organization. The figure shows that risk associated in each of the
projects are categorized under a particular manager and there are several managers like this
who report to the level above them. The main risk management team will receive reports
from each of the processes and will identify the risk in each of the processes. Thus, these
various levels of risk management process will facilitate in mitigating risk factors in an
effective way (Kerzner 2013).
Thus, the lower level process in the multi stage risk management will be used for
quantification of risk. This identifies the contingency which has to be added to the overall
budget of organization such mega event. Thus, the quantification of risk will help to identify
the various contingencies in the processes of the organization. Thus, it can be seen form the
figure that the main risk management team is the link with the processes and risk at various
processes. They are the ones responsible for managing the risk factors and reducing the cost
of each of processes so that the event can be a success. The trends and risk are reviewed by
the main risk management team with the project team. Thus, monthly review keeps the
projects in line with the goals and objectives of the events (Kelly, Male and Graham 2014).
This multi stage risk management model is ideal for management of Olympic games as it
has a triple line of defence. The triple line of defence ensures that risk management can be
applied to all processes of the events. It will provide assurance by regularly challenging the
output. Moreover, it will consistency in the processes by implementation of compliance audit
and common policy. Management of risk is kept the top priority at all levels which ensures
better mitigation of risk. The ODA process will consist of risk management for controlling of

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change, AFC calculation, budget and progress reporting. Moreover, it will avoid to reduce the
changes in the specific activities to avoid extra allocation and spending of resources. This
framework will identify the potential risk factors at an early stage which will helps to
mitigate risk effectively. Thus, risk management process will ensure transparency in all the
processes and will be one of the integral part of the overall cost forecast of the event.
Contingency in the processes can be easily identified so that it can be returned to the funders
so that transparency is maintained (Bromiley et al. 2015).
Four individual risks, their evaluation and potential mitigation strategies
The individual risk factors in London Olympics 2012 are as follows:
 Supply chain insolvency
 Credit crunch and funding of IBC and village
 Programme integration and interference
 Industrial relations
 Security, changes, authority and considerations
 Delay in completing the Village for Athletes
 Safety and Health
The economy of United Kingdom was through a phase of recession and there were large
number of insolvency in the market. Thus, the unstable economy of the country would have
had great impact on the supply chain. There were 7500 tier 2 contracts and 150 tier 1
contracts, and the overall number of contracts were 43000. Therefore, insolvency in the
supply chain would have been a disaster for the event. Thus, in order to mitigate this risk

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factor, the supply chain team had been assigned to monitor all the critical tier 2 and tier 1
suppliers using delinquency and credit scoring ratings. The committee an insolvency which
would monitor and detect any form of insolvency and would act upon it on priority basis. The
resources held by the suppliers were moved to the holding depots. The committee intervene
in the procurement procedure to prevent the risk of high appointments (Engebretsen et al.
2013).
As it has already been said that the economy of the country was in turmoil and so it was
difficult to finalise funds from IBC. Moreover, the private funding that came had additional
requirements attached to it which were not acceptable. Thus, a large number of deals
collapsed and they were forced to reduce their operational cost by redesigning their project
plan. They funded for the processes form contingency and savings which made the games a
success (Stokes et al. 2014).
There were large number of complexities and interferences which means that there were
bridges, sewers, roads and utilities that were connected to the different venues. Moreover, the
venues were located in areas were the topography was changing. Thus, the interfaces were
minimized, interfaces were understood and managed, acquired in larger packages so that the
integration risk can be transferred to the supply chain.
The management of such a huge event required a large number of employees, there were
5000 employees in the village and 6500 employees on the park. These employees were
represented by three unions and they tried to keep the event free of any disputes. Thus, the
committee agreed to all the key principles of the management union. The local employees
were hired and all employees are hired directly. The compensation of the employees was

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according to the working rule agreement rates. The employees were provided with training,
welfare and other facilities (Raj, Walters and Rashid 2017).
Olympics being a huge event, security is key due to the recent increase in terrorist
activities in crowded places. Thus, security would consist of CCTV cameras, fencing and
skilled security personals. However, security scopes keep on changing due to the uncertainty
of events. Thus, the committee maintained a close relationship with the security officials in
order to identify the potential threats and their mitigation techniques. The scope of security
has to be flexible so that it can be altered depending upon the changing needs. Moreover,
these measures will affect the cost structure of the event and so it was transferred to the
funders of the events (Bennett and Haggerty 2014).
There was delay in the completion of the athletes’ village, the village consisted of
16000 beds spaces, 2500 flats in Legacy, 11 plots out of which 6 were tier 1 and 5 were CM.
Thus, the constructors had to deliver a number of flats at a time with a given deadline.
Moreover, supply chain risk was involved in manufacture and delivery of essentials, such as
cladding panels and bathroom pods. Thus, in order to speed up the process, the committee
made negotiations with the constructers by buying of disruption and delay claims made by
the constructors.
There were more than 10000 workers at a time on the sites during the peak season of
work and so health and safety of the workers would a crucial point. The workers have been
working in underground, tunnels, demolition, hot working, working at height, railway
working and working with heavy machinery. Thus, the committee promoted maintaining of
safety among the workers and the higher-level managers were made liable for safety

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performance. Moreover, the work was supposed to be stopped when safety of the people was
comprised.
Conclusion
Thus, it can be concluded form the study that risk management in projects of great
magnitude is very important. The multi stage model, the highlighted issues and the mitigation
techniques provides an overall picture of a successful project management story. The London
Olympics were a success even though there were some ups and downs and provide great
example for other sport events of such magnitude. Moreover, the multi staged risk
management model mentioned in the report is an effective model which should be used for
effective management of risk in holding events of such stature. Thus, it can be inferred that
London Olympics were a success and it has shown other countries how to organize an event
by overcome major adversities in the surrounding environment.

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References and bibliography
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Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk
management: Review, critique, and research directions. Long range planning, 48(4), pp.265-
276.
Chance, D.M. and Brooks, R., 2015. Introduction to derivatives and risk management.
Cengage Learning.
De Bakker, K., Boonstra, A. and Wortmann, H., 2014. The communicative effect of risk
identification on project success. International Journal of Project Organisation and
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Jegathesan, M., Meeuwisse, W.H., Mountjoy, M. and Palmer-Green, D., 2013. Sports injuries
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Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc
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Hanstad, D.V., 2012. Risk management in major sporting events: A participating national
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Heizer, J., 2016. Operations Management, 11/e. Pearson Education India.
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Kendrick, T., 2015. Identifying and managing project risk: essential tools for failure-
proofing your project. AMACOM Div American Mgmt Assn.
Kerzner, H., 2013. Project management: a systems approach to planning, scheduling, and
controlling. John Wiley & Sons.
Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.
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risk management methodology for small firms. International Journal of Project
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Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance. CRC Press.

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Raj, R., Walters, P. and Rashid, T., 2017. Events management: principles and practice. Sage.
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Stokes, K., Clarence, E., Anderson, L. and Rinne, A., 2014. Making sense of the UK
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