BSS054-6 Risk & Procurement Management: Rio Olympics 2016 Report

This report provides a comprehensive analysis of the risk management strategies employed during the Rio Olympics 2016. It identifies key risk areas such as financial deficits, environmental and health risks (including the Zika virus outbreak), and geopolitical risks including terrorism. The report uses a Bow-Tie Diagram and a Risk Breakdown Structure to illustrate the various risks and their potential impacts. It evaluates individual risks like pollution, energy and water crises, crime, and social tension, and discusses risk management processes and mitigation strategies. The report also addresses the impact of these risks on shareholders and provides recommendations for future events. This document is available on Desklib, where students can find a wealth of study resources including past papers and solved assignments.

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Risk Management Plan of Rio Olympics 2016

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Table of Contents
Introduction........................................................................................................................3
Key risk areas in Olympics Games Project.......................................................................3
Environmental and Health Risks....................................................................................4
Geopolitical risks & terrorism.........................................................................................5
Impact of the risks on shareholders...................................................................................5
A Bow-Tie Diagram for Risk Analysis................................................................................5
Risk Breakdown Structure.................................................................................................7
Identified 4 individual risks.................................................................................................7
Issues of Pollution......................................................................................................7
Energy and Water Crisis............................................................................................7
Crime and Public Security..........................................................................................8
Increase in Social Tension.........................................................................................8
Evaluation of the risks........................................................................................................9
Risk Management Process................................................................................................9
Risk profile must be effective.........................................................................................9
Appropriate prioritizing is important.............................................................................10
Monitoring process.......................................................................................................10
Adequate training.........................................................................................................10
Practicing......................................................................................................................10
Risk Mitigation Strategies................................................................................................10
Identifying the right team..............................................................................................10
Quantifying risk............................................................................................................11
Planning Communications...........................................................................................11
Testing ideas................................................................................................................11
Recommendations...........................................................................................................11
Conclusion.......................................................................................................................11
Reference List..................................................................................................................13
Appendix..........................................................................................................................15

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Introduction
According to Heagney (2016), risk management refers to the process of identification
and assessment of any company's risks and taking suitable actions to protect the
company against the risks. Risk is always associated with any future occurrence of loss
or harm but some risk managers identify risk as an opportunity which can lead to
achievement of considerable gains. However, as opined by Hopkin (2018), risk
management is important for any business to analyze the potential risks in order to
settle off the potential losses with potential gains and avoid making mistakes.
Consideration of risks proves as a benefit for companies indicating their present
performance and market potentiality in order to sustain growth and profitability.
Companies and its leaders face collections of large scale risks such as financial system
meltdown, political revolutions, supply chain disruptions, natural calamities, and
countless other risks, all of which pose as enormous challenges for companies making
them either directly or indirectly face it.
As suggested by Cokins (2017), Strategic business planning is one of the key
components of successful business operations in order to identify the potential risks.
After the process of risk identification, it is of utmost importance to prioritize in
accordance with assessment of their probability of occurrence. As identified by Kendrick
(2015), managing risks involves making the business insurance such as taking a
product liability insurance, fire insurance for insurance from damage of physical
property. Since prevention is considered to be the best risk insurance, this gives rise to
employing specialized risk managers or consultants who are able to forecast potential
risks to the company and accordingly manage them. For large organizations,
acknowledging the risks with the use of modern technology and adequate preparation
or business planning, leads to addressing unexpected problems that can potentially
affect the company. Since every organization is different, it's up to the decision makers
to identify the prevailing risk that are associated with their operations and formulate a
risk assessment plan accordingly.
Key risk areas in Olympics Games Project
Risk management is one the most important part of any business. The rising
complexities and interconnectivity has led to a risk for the daily operations of any
business. As opined by Eberhardt (2016), the Rio Olympics 2016 is a good example to
understand the risks a business might face and the impact of risk management
planning. However, the Sydney Olympics and Beijing Olympics were conducted
smoothly. The countdown for the successful conduct of the Rio Olympics 2016 was
expected even before the event took place in the year 2016 in Rio de Janeiro, Brazil.
This Brazilian city was chosen as the most suitable location for hosting the Rio
Olympics 2016 after it hosted the Summer Games in the year 2009. However, as
identified by Barnato (2016), right before the hosting of the Rio Olympics, it was flooded
with various risks starting from security issues, financial risks, health risks, reputational
risks and geopolitical risks. These issues were a bottleneck for the event organizers and

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could understand that the country needs to prepare itself for the existing challenges.
Mataruna-Dos-Santos (2016) stated that the Rio Olympics 2016 experienced one of the
most disrupted preparations for any International sporting event questioning the
credibility of Rio de Janerio commitment to host such an event. The country's disrupted
preparations were compared to 2010 South Africa World Cup which faced the issues
related to infrastructure and political instability. Brazil has been engulfed by the
prevailing social unrest and political instability along with rising impact of Zika virus
across South America. However, in a nutshell, there are three key risk areas that the
Rio Olympics 2016 should have focused upon.
As suggested by Watts (2016), Rio Olympics 2016 experienced financial risks from
Brazil's financial deficit. But this was not in the case of Sydney, Beijing or London
Olympics which were conducted smoothly. The Olympic budget was determined at 5
billion dollars which was cut down by 20% due to the prevailing financial deficit. The
prospects of balancing expenditure and profit was not bright in case of Brazil. Reports
suggest that the private sector funded 70% of the cost of the Rio games which helped
the country to a certain extent to conduct the Rio Olympics. As stated by the Governor
of Rio de Janerio, the country plead for Federal support to avoid collapse of its public
security, education, transport system, health and environmental management. The
country declared a state of financial emergency which was not less than an
embarrassment for the country since it was hosting South America's first Olympic
Games. Brazil's economy was falling apart just before the opening of the Olympics
which resulted in slashing of police, health and educational budgets.
Figure 1: Costs on Rio 2016 World Cup
(Source: Bradley, 2016)
Environmental and Health Risks

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Brazil has faced its worst political crisis and recession in decades. The outbreak of Zika
virus was a major concern for the country just before the Rio Olympics event. According
to Kassam (2016), the country faced the issue for Olympics due to Zika outbreak.
Concerns from other countries stated that it was not a good decision to send more than
a million visitors into Brazil either for watching the Olympics or tourism purposes. The
World Health Organization declared Zika virus as an International health concern which
required to be mitigated early as possible. The state of Rio de Janerio recorded more
than 26,000 suspected Zika cases and Brazil being the highest of any other country.
The major risk was on the athletes and the visitors that were expected to visit Brazil
during the Olympics from different countries. Since Zika virus can be transmitted, the
biggest risk is the virus's transmission from Brazil to other countries that did not get
affected. The country never wanted its visitors to face the symptoms virus and therefore
encourage visitors to take precautions and protect themselves from mosquitoes.
As identified by Kaiser (2015), the Olympic windsurfing and sailing events were hosted
in Rio’s Guanabara Bay. While health risks were a major concern, pollution was not far
behind. The country promised to clean up 80% of the wastes and garbage from the
water bodies, but near about 50% of the cleanup goal was achieved before the
Olympics. Water and energy crisis suggested on the climatic conditions of the country in
the current scenario.
Geopolitical risks & terrorism
As identified by Neumann (2016), the state of Brazil did not seem to be good due to
constant fears of terrorism and political unrest in the country right before the Rio
Olympic 2016. Rio’s mayor addressed the issue of prevailing criminal records and
violence in the state which might pose a threat during the Rio Olympics 2016. For
instance, the London Olympics 2012 faced security problems with a terrorist attack.
Although the massive preparation of the National Security Force and Brazilian Air Force
to combat the threat from terrorist attacks, 10 men were arrested in that period upon
suspicion of planning attacks on Brazil right before the Olympics event. The deep
recession in the year 2016 and 2017 was due to political instability and ongoing
corruption levels that has resulted in a shrinking economy and rising unemployment
among the population.
Impact of the risks on shareholders
As identified by Divine (2016), the Rio Olympics 2016 witnessed the absence of
Olympic sponsors such as Nike and Under Armour. The Summer Olympics in London in
2012 witnessed more than 3.6 billion people. McDonald's is one of the valuable partners
of the Olympics but it did not want to sponsor if they will not get the right value for the
sponsorship dollars. McDonald's wished to push its food and promote their work
environment the Olympic crew program but companies like General Electronics found
this is an opportunity to invest in the Rio Olympics 2016 and expanded to continents

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South America. The Rio Olympics and positive impact on General Electrics getting
support for technology and infrastructure.
A Bow-Tie Diagram for Risk Analysis
Figure 2: Bow-Tie Analysis
(Source: Author’s creation)
Risk Breakdown Structure
Figure 3: Risk Breakdown Structure
Rio
Olympics
2016
Budget and Risk
mitigation issues
Financial Deficit
Crime and terrorist
activity
Threat from Zika and
other diseases
Major health issues to
athletes and tourists
Impact on the
organizing committee
Budget
planning
Identify
the risks
Optimum use
of resources
Take support
from local
authorities
Identify the
rate and effect
of these
diseases
Medical
precautions
from
diseases

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(Source: Author’s creation)
Identified 4 individual risks
Issues of Pollution
The Guanabara Bay falling on the eastern side of Rio de Janerio hosted the windsurfing
and sailing events of the Rio Olympics 2016 (Kaiser, 2015). But it was identified that the
water bodies were filled with garbage and raw sewage which was a hindrance for the
sailors due to fallen pieces of tires, furniture, and plastic bags. The bigger concern was
with the help of the sailors as we might not be prone to health issues in South American
countries. Few of the studies have identified that the political instability made it difficult
for Brazil to make significant improvements in terms of technology and waste
management.
Energy and Water Crisis
Brazil faces the issue of energy and water crisis and both of them are correlated. In a
shocking announcement by Eduardo Braga, The Minister of Mines and Energy, it was
revealed that if the water levels deep below 10% capacity, it will result in an abrupt
running of the hydroelectric plants which generates about 70% of the energy in Brazil. A
Risks involved
Technical Risks
Issues during
construction
Operations and
Maintenance
Financial Risks
Financial Deficit in
Brazil
Private Sector
Funding
Falling economy
of Brazil
Environmental Risks
Risks to athletes
and tourists from
Zika virus
Risks from water
and air pollution
Water borne
diseases to
athletes and locals
External Risks
Terrorism in the
country
Recession
Growing
corruption due to
unemployment

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hefty amount of 5 billion dollars were spent on subsidizing fossil fuels to compensate
the loss of hydroelectric power during the 2014 world cup. The indications were also
clear that the country may have to do this again for the 2016 Rio Olympics.
Crime and Public Security
Rio has witnessed a rise in street robberies since the year 1991 despite of a fall in
overall street crime in the past 30 years. Crimes like mass robberies became common
for the world cup and the Olympics were hosted. The risk of getting assaulted
increasing due to cases like commuters being assaulted by armed robbers in metros
and by stopping moving cars on the road. Although for the World cup and Olympics,
increased in presence of police at strategic points throughout the city. The underlying
risk was for the athletes and visitors coming to the country during the Olympics.
Figure 4: Rate of crime (murder) in Rio
(Source: Leahy and Schipani, 2017)
Increase in Social Tension
Right before the Rio Olympics 2016, almost 8000 families were facing the risk of being
uprooted from their homes for proposed constructions in those areas. The government
tried to negotiate with the people to vacate their houses and provide house at market-
rate compensation for those being evicted. The Rio Olympic was criticized for serving
mostly to the private sector and since the construction of Olympic sites was managed
by private organizations. Some of the people have also criticized the Olympic projects
being developing on the real estate and tourism sector of Rio. Harriet (2016) identified

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that, the risk was for the locals as they were being evicted from their homes. This
although is important for hosting the Olympics smoothly but at the cost of people losing
their homes.
Evaluation of the risks
The Rio Olympics 2016 was majorly criticized due to prevailing issues with plumbing,
wiring, and other issues which were not being addressed till the last moment. The
construction of the Olympic village was undertaken by a private organization but was
heavily criticized along with list of concerns. In the history of Olympics such mess were
rare to find but this was common in Rio Olympics as well as the 2014 World Cup. Rio is
going to be remembered due to the mishaps it has conducted during the major
International sporting events held in the country. To evaluate the risk factors started with
the security in Rio. The most concerning part related to the Rio Olympics is the
indiscriminate violence occurring in almost all parts of the city. Even if any one of the
athletes or visitors are attacked within the Olympic village promises, it will soon become
a national disgrace. One of the major concerns again is the unclean water bodies. If not
for the athletes coming to the city, it is a major risk for people residing in the City and
this requires to be addressed. The organizers of the Olympic Games must understand
that everything depends on the way of presenting their country in front of others. Zika
virus one also prevalent at the time of Rio Olympics which became a major concern
since athletes and visitors might get affected with Zika. Olympics can be creating a
global epidemic and this can be a risk for thousands of people. These kinds of risks
calls for immediate attention and should be addressed as a part of risk assessment
process of the city. This is not only for the welfare of the people coming to the city for
Olympics but also will serve the purpose beautification of the city. The city is under a lot
of threat due to active terrorism in nearby regions and also lack of risk management at
any given point of time. The responsibility of the government is to mitigate such risks for
the safety and security of its people.
Risk Management Process
Risk management is essential for any large project such as the management of Olympic
Games. As the world is growing there are emerging risks that is impacting businesses in
every sense. This is the reason why businesses need to consider developing risk
management plans and mitigation strategies to tackle the risks that might affect their
operations.
Risk profile must be effective
A comprehensive and effective risk profile becomes essential to manage the risks. In
case of Rio Olympics 2016, a holistic approach can be helpful in managing the risks first
at the planning and preparation stages and then at the operation stage. During the
Olympics game, there was a crisis on ticketing sales which could have been addressed
by preparing a contingency plan for filling the vacant seats. This was a loss for the
organizers safety could not generate revenues even after so much of expenses. Along

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with that the issue of corruption and risk due to Zika virus could be mitigated by
identifying projects that would be in favor of the people.
Appropriate prioritizing is important
An organization can only be confident with its preparation of any event if it has
effectively prioritized their risks. The Rio Olympics should focus more on identifying the
bigger risks rather than wasting resources on unnecessary risks that can be mitigated
with simple solutions. The organizers must rank the probability of each risk then
determine which risk to be given priority first.
Monitoring process
This is one of the most important parts of any risk management process because plans
can be implemented but they are required to be monitored to check if the plan is
working fine or not. As can be seen during the Rio Olympics 2016, Zika virus in Brazil
was at a hype. The risks should have been assessed first and then monitored to track
the development that may change impact the potential impact. The organizers should
focus more on analyzing the spread of Zika virus and its impact on people along with
the impact on Rio 2016. This will help to accordingly make changes in the plans if there
is a sign of improvement or decrease in the impact of Zika virus.
Adequate training
In order to manage the risks, it is important for organizers to train their staff and team
members with adequate skills and knowledge about the status of the issues. The daily
responsibilities of the staff members must align with the risk management plan process.
Practicing
As mentioned earlier, the organizers and their staff member must be ready with their
contingencies to mitigate any kind of risk. This requires them to be have adequate
knowledge and practice on how to mitigate those risks. In case of any crisis or shortage
of supplies the team must be aware of how to provide supplies to the athletes and
visitors coming to attend the Rio Olympics.
Risk Mitigation Strategies
The risk mitigation strategy would involve the clarification of the requirements of the
project. The use of agile techniques will ensure that the shareholders are engaged and
want to invest in the projects.
Identifying the right team
When people are skilled and understand the risks associated with the project, they will
keep on introducing new risks and suggest how they can be mitigated. Understanding
the requirements makes it easier for mitigating the risks and especially people related
risks. The appropriate use of resource allocation techniques will help to deliver a better

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project. As in the case of Rio Olympics 2016, the organizers must include contingency
plans for each identified risks by seeking help from its skillful workforce.
Quantifying risk
Risk transference can solve the issue of mitigating a lot of risks. But it is always better to
spread the risk rather than taking full responsibility of mitigating that risk. For instance,
the infrastructural costs of building the Olympic village for Rio Olympics 2016 was very
high as it was managed by private organizations. This indicates that the private
organizations must be aware of the risks that can disrupt their planning thereby facing
the challenges. The risks should always be quantified or should put a financial measure.
Planning Communications
This is an important step because implementation of a proper plan or risk mitigation
strategy, it requires for the local and national government bodies to communicate with
each other and understand the prevailing issues within the country of the state.
Therefore, planning the communications will help to identify residual risks and engage
more effective strategies.
Testing ideas
After assessing each and every strategy, it is important to test them before
implementing them in real world setting. This will not only help to lower the project risks
and make them manageable but also deliver better results. As in the case of Rio
Olympics 2016, it was important to manage the risks of infrastructure, deliverables,
environment as well as social impacts.
Recommendations
The analysis of the case study on Rio Olympics 2016, it can be recommended that the
organisers carry out comprehensive and robust planning in advance in order to mitigate
every risk possible. They should consider the top level and then move down to the
smaller risks that may have lesser impact. Constructing matrices can be helpful to
identify the possible risks. The most likely risks as identified are the environmental risks,
social risks activities in the city of Rio which needs to be addressed first and then
accordingly resources and time is required to invested on them. The above-mentioned
risk management process will be able to mitigate maximum risks possible before and at
the time of Rio Olympics 2016. In order to execute the contingency plans, it is also
required to be flexible can adapt accordingly.
Conclusion
From the above analysis of the case study on Rio Olympics 2016, it can be concluded
that country of Brazil and entire city of Rio has been facing several lists which needs to
be addressed as soon as possible in order to bring welfare and prosperity to the
country. The appropriate use of risk management processes and strategies will help to

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build contingency plans and government will be able to know exactly where they are
going wrong.

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Reference List
Barnato, K., 2016. Rio 2016: Is Brazil doing the Olympics on the cheap?. [online]
Available at: <https://www.cnbc.com/2016/07/26/rio-2016-is-brazil-doing-the-olympics-
on-the-cheap.html> [Accessed 19 April 2019]
Bradley, R., 2016. Why Hosting the Olympics Is a Lousy Deal. [online] Available at:
<http://fortune.com/2016/07/28/olympics-host-city-downside/> [Accessed 26 April 2019]
Cokins, G., 2017. Strategic business management: From planning to performance. 4th
ed. New Jersey, USA: John Wiley & Sons.
Divine, J., 2016. Olympic Stocks: 5 Companies Betting Big on Rio. [online] Available at:
<https://money.usnews.com/investing/articles/2016-08-03/olympic-stocks-5-companies-
betting-big-on-rio> [Accessed 19 April 2019]
Eberhardt, K.A., Vinnemeier, C.D., Dehnerdt, J., Rolling, T., Steffen, R. and Cramer,
J.P., 2016. Travelers to the FIFA world cup 2014 in Brazil: Health risks related to mass
gatherings/sports events and implications for the Summer Olympic Games in Rio de
Janeiro in 2016. Travel medicine and infectious disease, 14(3), pp.212-220.
Harriet, K., 2016. Rio Olympics 2016: economic gain or loss?. [online] Available at:
<https://www.worldfinance.com/infrastructure-investment/rio-olympics-2016-economic-
gain-or-loss> [Accessed 19 April 2019]
Heagney, J., 2016. Fundamentals of project management. 4th ed. New York, USA:
Amacom.
Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. 3rd ed. London, UK: Kogan Page Publishers.
Kaiser, A. J., 2015. Here are the 4 Challenges Rio de Janeiro Must Meet to Host a
Successful 2016 Olympics. [online] Available at: <http://time.com/3768709/rio-de-
janeiro-2016-olympics/> [Accessed 19 April 2019]
Kassam, A., 2016. Zika virus makes Rio Olympics a threat in Brazil and abroad, health
expert says. [online] Available at: <https://www.theguardian.com/world/2016/may/12/rio-
olympics-zika-amir-attaran-public-health-threat> [Accessed 19 April 2019]
Kendrick, T., 2015. Identifying and managing project risk: essential tools for failure-
proofing your project. 3rd ed. New York, USA: Amacom.
Leahy, J. and Schipani, A., 2017. Rio violence exposes Brazil’s missed chance. [online]
Available at: <https://www.ft.com/content/897ad5da-76a0-11e7-90c0-90a9d1bc9691>
[Accessed 26 April 2019]
Mataruna-Dos-Santos, L. J., 2016. Rio reaches crisis point ahead of the
Olympic Games. [online] Available at: <https://theconversation.com/rio-reaches-crisis-
point-ahead-of-the-olympic-games-61819> [Accessed 26 April 2019]

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Neumann, V., 2016. The Real Terrorists Threats to the Rio Olympics. [online] Available
at: <https://www.fpri.org/article/2016/08/real-terrorist-threats-rio-olympics/> [Accessed
19 April 2019]
Watts, J., 2016. Rio de Janeiro governor declares state of financial emergency ahead of
Olympics. [online] Available at: <https://www.theguardian.com/world/2016/jun/17/rio-de-
janeiro-financial-emergency-olympic-games-2016> [Accessed 19 April 2019]

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Appendix
Risk Register/Risk Log
Risk I.D. Risk Description Consequence Likelihood Ranking Strategy
1 Political Crisis and
Recession can lead to
shortage of funds for
construction
Major High High Risk Control
2 Suitable staff not available
for task management
Major Moderate Medium Risk Control
3 Risk from the diseases
and especially Zika Virus
Major High High Risk Control
4 Lack of communication
with the local and
government bodies to
manage the risks during
the Olympics
Significant Likely Medium Risk Accept
5 Issues of Crime and
Public tension
Significant Moderate High Risk Control
6 Low Availability of experts
for subject matters to
advise and review
Significant Likely High Risk Control