Risk Management in Project Management

This article discusses the principles of risk modelling in business working structures, risk management tools, their features, applications, and limitations, and the reasons for project failure and preferred solutions. It also covers the importance of effective communication and the development of a project management maturity model. The subject matter is relevant to project management courses in colleges and universities.

Risk Management in Project Management

Contents
Question 1: Limitation and obligation in applying principle of risk modelling in business
working structure.......................................................................................................................2
Answer 1:................................................................................................................................2
Question 2: Risk Management Tool, its feature, application, and its associated limitation......3
Answer 2:................................................................................................................................3
Question 3: Reason for project failure and preferred solution...................................................5
Answer 3:................................................................................................................................5
References:.................................................................................................................................8

Question 1: Application of As far as Reasonably practicable principle for loss
prevention. Limitation and obligation in applying principle of risk modelling in business
working structure
Answer 1:
As far as reasonably practical principle means that the risk associated with the project should
be low. The activities which are having the possibility of high risks in the project should be
omitted from the schedule. Activities which are associated with negligible risks should be
given preference. It is applied for measuring the risks in relation to the cost benefit analysis.
The strategies and planning of activities based on practical observation helps in minimizing
the risk associated with the completion of the project. The development of the project
management maturity model helps in analysing the gaps which assist in the existing model.
The development of the strategic plan helps in improving the quality of the project. The
improvement in the quality of the project ensures that the risks associated with the working
plan of the project are reduced to high level and which helps in the successful completion of
the project.
Various risks and threats are associated with every business. The consequences of the risks
can affect the functionality program of the enterprise in the management of processes and
tools involved. The deployment of the “As Far As Reasonable practical rule” helps in
identifying the area of concern which can create problem later in the functional module of the
enterprise. There are certain limitation and obligation associated with the deployment of risks
management strategy for the effectiveness of the business such as complexity in the decision
making process structure, acceptance of area of concern, compliance issues with the
regulatory policies, avoidance to the escalation received from the risk assessment process and
many others.
The decision taken by the manager depends upon the information collected on the risks from
different sources. The use of unauthorised sources for collecting data required to evaluate risk
can affect the decision making process of the project manager. The project manager is not
able to detect the skills and talents of the team members which can create a problem in the
allocation of the responsibilities. The complexity can arise in the allocation of resources
among the team members due to the inefficiency of the risks assessment process.. The

articulation of the risks can be effectively done with the help of risk assessment and
mitigation process to get the required output according to the user demand.
Sometimes the risk associated with the project are neglected which can create major problem
in handling the business process. The consultancy hired from the outside for managing risks
associated with the project completion does not have the knowledge about the expertise of the
employees which can create inefficiency in the allocation of the resources and responsibilities
(Aven, 2014). The problematic situation can occur if the risk associated with the business
plan was not proactively settle down because these small risk in the starting phase of the
project can create a big problem at the end of the project such as delay in one activity can
create the delay of complete project to be delivered on time. The deployment of the risks
modelling structure helps in identifying the area of concern which can create problem later in
the functional module of the enterprise (Haimes, 2015). The analysis and evaluation of the
risk modelling and assessment process should be taken under consideration for managing
risks of the project effectively and efficiently. The risk manager has the key responsibility of
identifying the risk associated with the project process and providing relevant and effective
solution for handling the risks with ease (Zorz, 2014).
Question 2: Risk Management Tool, its feature, application, and its associated
limitation
Answer 2:
The OIRA risk assessment tool stands for Online Interactive Risk assessment tool. This tool
is used for managing the interactive process on the web. They are complied with OSH
legislation followed for the web services programs (Kerstein, 2014). This tool is significant in
providing information related to the occupational health and safety program at work places.
The objective of this tool was to analyse the risks associated with the large and small
businesses. This tool is capable of providing information related to occupational accidents to
create an awareness program to avoid health and safety risks at workplace. It helps in
reducing and minimizing the cost spent in resolving the issues related to the health and safety
hazards.
Features:

 These tools are based on open source code which is capable of storing information
related to the content management program.
 The maintenance of the hardware program can be effectively done by upgrading the
internet bandwidth with the installation of these tools
 Occupation risks associated with the health and safety program can be effectively
minimized (ICF, 2017)
 The automatic report can be generated for analysing the risk associated with the
project during the operational working of the business plan (Haimes, 2011).
 The effective action plan can be developed by focusing on the key areas of concern
associated with the project
 It make use of diffusion model
 It make use of promotion model
 It is hosted on the Agency server of the business
 Direct linkage can be provided to the user from the website of the enterprise
Application:
The effective implementation of the OIRA tool on the business platform is able to provide
easy to use working platform to the employees (Muller, 2013). The practical experiences of
the team members in resolving the issues can be linked with the help of diffusion model
equipped in the OIRA model. The tools hosting can be efficiently done with the use of
promotion platform of the OIRA. It is effective in analysing the risks associated with the
health and safety hazard associated with the effective working of the organization. The cost
cutting can be effectively done because it is not required to spent money related to the health
problems of the employees (Pillay, 2006). The effective action plan can be developed by
focusing on the key areas of concern associated with the project. It is useful in providing
direct linkage can be provided to the user from the website of the enterprise
Limitation:
The main limitation of the OIRA tool is the awareness among the business owner to
implement it in their working platform to minimize the risk associated with the health
problem of the employees during the working hours. Some of the limitation of OIRA tool are
stated below:

 The small and large organization are not aware about the OIRA tool for managing risk
of the enterprise
 Project manager has limited knowledge to use OIRA tool
 Limitation in systematic analysing of the business problem
 The employees are not convinced in using the OIRA tool for completing their
business activity
Question 3: Reason for project failure and preferred solution
Answer 3:
The failure of the project occurs due to the following reasons which are described in the table
below:
Reason of
project failure
Policies Procedures System Solution
Negligence to
the project
activities
The project
manager does
not show ethical
code of conduct
in designing of
the project
activity
schedule
Effective
reports are not
collected from
the team
members
Lack of interest
and knowledge
Complete
development of
the organization
project plan is
effected
The development
of Gantt chart
helps in
managing
interdependencies
between the
project activities
The ethical code
of training
program should
be arranged for
the effective
development of
priority setting
(Norman, 2015)
The mission and
goal of the
organization is
No development
of precise plan
The unclear
requirement
specification
The designing
phase of the
project get
Arrangement of
periodic meetings
with the project

not clear to the
team members
and the project
manager
plan provided
by the project
manager
Unclear goal
and objective
affected due to
the unclear
requirement
specification
plan provided
by the project
manager and
unclear goal and
objective
owner to get the
clear
specification of
the requirement
plan
The goal and
mission of the
project should be
clearly defined
Preference not
given to the
planning
activities
No development
of the project
plan
No estimation
of start date and
finish date of
the project and
the cost
estimated with it
No development
of work
breakdown
structure
No scheduling
of activities
The risk
associated with
the project
development
life cycle get
high
Development of
the risk
identification and
mitigation plan in
the starting phase
of the project
(Amponsah,
2015)
Mismanagement
in the
availability of
resources
No agreement
with the
contractor for
managing
supply and
demand of the
resources
No division of
work load
among the team
members
The
construction
phase of the
project
development
cycle get
affected due to
the improper
management in
the supply and
demand of the
resources
Collection of
report from the
sub-ordinates
Managing
agreement with
the contractor and
sub-contractor
Improper
communication
No development
of project
Formal
communication
It can have an
adverse effect
Development of
the project

flow between
internal and
external
working parties
communication
plan
No effective
tools used for
managing
communication
with the
external parties
get affected on the
completion
program of the
project because
on time
collection of
report from the
sub-ordination
is not possible
due to the poor
communication
procedure
communication
plan
Development of
project
communication
tools for
managing
communication
with internal and
external parties
Periodic
arrangement of
meeting with top
executives of the
enterprise.
Low
involvement of
top support
Low level of
interest
Busy schedule
Moral support
of the
employees get
demotivated
No proper
grievance
handling of the
employees
which creates
the picture of
chaos and
conflict in the
working
environment of
the enterprise
Development of
the project
communication
plan
Development of
project
communication
tools for
managing
communication
with internal and
external parties
Periodic
arrangement of
meeting with top

executives of the
enterprise.
References:
Amponsah, R. (2015). The real project failure factors and the effect of culture on project
management in Ghana. 1st ed. [ebook].
file:///C:/Users/acer/Downloads/The_Real_Project_Failure_Factors_and_the_Effect_of_Cult
ure_on_Project_Manageme_LFNzOro.pdf [Accessed 01 Apr. 2018].
Aven, T. (2014). Risk assessment and risk management: Review of recent advance on their
foundation. 1st ed. [ebook].
https://www.sciencedirect.com/science/article/pii/S0377221715011479 [Accessed 01 Apr.
2018].
Haimes, Y. (2011). Risk modelling, assessment, and management. 1st ed. [ebook].
https://onlinelibrary.wiley.com/doi/book/10.1002/0471723908 [Accessed 01 Apr. 2018].
Haimes, Y. (2015).Risk Management and risk based decision making. 1st ed. [ebook].
http://www.eolss.net/sample-chapters/c15/e1-28-05-03.pdf [Accessed 01 Apr. 2018].
ICF. (2017). Peer Review on the use of web based tools for OSH risk assessment. 1st ed.
[ebook]. file:///C:/Users/acer/Downloads/Synthesis%20Report%20-%20Peer%20Review
%20on%20Use%20of%20WBTs%20for%20OSH.pdf [Accessed 01 Apr. 2018].
Kerstein, D. (2014). Challenges in implementing enterprise risk management. 1st ed.
[ebook]. http://www.acrn-journals.eu/resources/jfrp201403a.pdf [Accessed 01 Apr. 2018].
Muller, R. (2013). Essential basics and limitation of safety and risk management. 1st ed.
[ebook]. file:///C:/Users/acer/Downloads/9783319027791-c2.pdf [Accessed 01 Apr. 2018].
Norman, N. (2015). An investigation into the reason for failure of community based project.
1st ed. [ebook].
http://uir.unisa.ac.za/bitstream/handle/10500/9920/Dissertation_Ndou_DN.pdf..pdf?
sequence=1 [Accessed 01 Apr. 2018].
Pillay, R. (2006). An investigation into the criteria for a project success. 1st ed. [ebook].
https://ir.dut.ac.za/bitstream/10321/78/8/Pillay_2006.pdf [Accessed 01 Apr. 2018].

Zorz, M. (2014). Risk management issues, challenges, and tips. 1st ed. [ebook].
https://www.helpnetsecurity.com/2014/05/28/risk-management-issues-challenges-and-tips/
[Accessed 01 Apr. 2018].