Qualitative Risk Analysis in Project Management Report

This report focuses on qualitative risk analysis within project management, using Hurricane Katerina as a case study. It details the process of identifying and assessing risks, including rolling power outages, labor shortages, inadequate funding, and hazardous waste disposal. The report employs a risk register and risk matrix to evaluate the severity and probability of each risk, and proposes mitigation strategies such as backup generators, securing labor through community outreach, re-scoping projects for funding issues, and implementing waste management plans. The analysis emphasizes the importance of prioritizing risks and proactively addressing project uncertainties to ensure successful project completion. The report also references the PMBOK guide and various academic sources to support its findings and methodologies.

Running head: PROJECT MANAGEMENT
Project Management
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Table of Contents
Abstract................................................................................................................................2
Qualitative Risk Analysis....................................................................................................3
Analysis of the Risks...........................................................................................................4
References..........................................................................................................................13

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Abstract
Qualitative risk management is described as an effective technique of quantification of the risks
linked with a hazard. It is known to be a very simple and cost effective way for management of
the risks linked with a project. This method of risk analysis evaluates as well as documents the
risk probability in a pre-determined and pre-defined scale. The aim of the qualitative risk
analysis is to establish relative priorities linked with the individual project risks. Qualitative risk
analysis involve a number of techniques, which include effective data gathering, expert judgment
along with meetings to identify the risk that can affect the normal execution of a project. This
report discusses the risk that Hurricane Katerina might have on a particular project. An effective
risk management is performed to address all those risks so that those risks can be addressed or
mitigated. The report discusses the most significant risks that can be faced as an effect of the
Hurricane Katerina. The report further discusses the mitigation approaches that can be
undertaken to address the risks linked with the project.

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Qualitative Risk Analysis
Uncertainties are bound to be present in a particular project. Risk identification and the
assessment of the risks is considered to be a step by step process that ascertains effective
identification and mitigation of the risks (Feng, Wang & Li, 2014). Risk management is
considered to be an essential part of a good management practice as it prominently features the
uncertainties that the project might face. Risk management is important for a project as it helps
in taking better decisions (Yoe, 2019). Management of the risks is significantly important
because it contributes to easier completion of the project.
There are two techniques of risk identification and analysis of the risk, which are
qualitative risk analysis and quantitative risk analysis (Varajão, Colomo-Palacios & Silva, 2017).
The qualitative and quantitative technique of risk management are comprehensive tools, used for
identification and management of the risk.
There is a significant difference between the techniques of risk assessment followed in
qualitative and in quantitative risk management methodology (Modarres, 2016). In this report, a
qualitative process of risk analysis is considered for evaluation of the risk elated to Hurricane
Katerina. Hurricane Katerina has been an extremely destructive and deadly hurricane that
resulted in major landfall in Florida and in Louisiana (Cagliano, Grimaldi & Rafele, 2015). This
report evaluates the different risks that can be faced by a project as an effect of this deadly
hurricane. The process of risk management that is opted for this project is qualitative approach of
risk management.
PMBOK guide (2017), states the different approaches for identification and the
mitigation of the risks. The techniques include expert judgment, gathering of data and meeting.

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Apart from that, it is further observed that Delphi technique can be used for effective
management and mitigation of the risks.
One of the most significant advantages of qualitative risk management process is that, it
helps in setting up of the relative priorities for the individual projects. Qualitative risk assessment
generally make use of descriptive scale in measurement of the probability as well as the
occurrence of the risk in a project. In qualitative analysis of a particular risk, the scale of Low,
Medium and High are used to indicate the likelihood of occurrence of a risk (Aven, 2014). A
quantitative analysis of the risk mainly helps in determination of the probability and the severity
of a particular risk (Bowers & Khorakian, 2014). A risk register is a tool that can be used for
analysis of the probability of occurrence and severity of the identified risks (Aven & Zio, 2014).
In qualitative risk analysis method, a risk assessment matrix is used to document the major risks
and the issues linked with the project. In the risk assessment matrix, a rating is given to each of
the identified risks so that the severity of the risk can be correctly identified.
One of the main challenges that can be faced in qualitative risk assessment is analysis of
the likelihood of occurrence of the risk along with its impact in determination of the level of
risks (Harrison & Lock, 2017). However, once this step is perfectly done, it becomes easier to
manage the risks faced in the project in a timely manner.
Analysis of the Risks
A number of risks can be faced by a project due to occurrence of Hurricane Katerina. The
most critical risks that can be faced as a result of occurrence of this hurricane while the project is
in its execution stage are listed as follows-
1. Outage of Rolling Power

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2. Huge Labor Shortage
3. Inadequate funds for reconstruction of the roads that are affected
4. Issues in disposal of the hazardous waste materials
The above discussed points indicate the most critical risks and the issues that a project
might face (Aven, 2016). Qualitative analysis of these identified risks are undertaken to ascertain
that the risks are mitigated in an effective manner.
A qualitative risk analysis is performed on the identified risks to examine the severity and
probability of occurrence (Kerzner, 2017). A risk register is prepared describe the severity and
the probability of the occurrence of risks.

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Risk ID Risk Description Severity of the Risk
(on a scale of 1-5)
Probability of
occurrence of the Risk
(On a scale of 1-5)
Risk Ranking
R1: 0.001 Rolling Power Outages 4 5 20 (Rank 2)
R2: 0.002 Shortage of construction
labor
5 5 25 (Rank 1)
R3: 0.003 Inadequate Funding for
road re-construction
5 3 15 (Rank 4)
R4: 0.004 Disposal of the
hazardous waste
materials
4 4 16 (Rank 3)
Table 1: The Risk Register

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After successful identification of the risk and after assessing the severity and the
probability of occurrence of the risks, the impact of the identified uncertainty on the project is
needed to be identified. In the table below, the likelihood of the occurrence of a particular risk is
identified on basis of the rank that is identified for each risk.

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Ranking Description Impact on
Cost and
Schedule
Mitigation Approach
Rank 1 Risk of construction labor
shortage is considered to be a
severe risk linked with a project
as the shortage of labor, largely
impacts the cost the schedule for
execution of a project.
High Help of local news channels can be taken to request people for
donating their services.
If people are ready to help, housing can be offered to the workers
who are volunteering for the services
The people who are ready to offer the volunteering services
should be provided with shuttle services.
Facilities of tax break can be offered to the people who are ready
to help
Rank 2 The Risk of rolling power
shortage is a critical risk linked
with the project as the hurricane
can significantly affect the cost
and the schedule of execution of
the project.
High The mitigation approach of the risk including having backup
generators that are capable of supplementing the power losses.
The effect of the hurricane can be deadly and therefore, removal
of as much electric equipment as possible is a good mitigation
approach

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It is necessary to have a satellite phone on site mainly for power
outages and battery backup
Rank 3 The hurricane affected project
site might need certain extra
works related to disposal of the
wastes and therefore it is critical
to analyze risks that can be faced
due to inaccurate disposal of the
wastes.
Medium The subcontractors appointed for the project can be asked to
remove large quantities of waste
Site waste management can be prepared for efficiently managing
and disposing the waste products during construction.
Rank 4 As an effect of the hurricane,
there can be a number of issue
related to funding for road
construction and the probability
of occurrence of this risk is
medium
High In case this risk is faced, it is crucial to reshape the scope of the
project by focusing on the time of project execution and
resourcing of the project.
It is necessary to fix the funding gaps of the project along with the
bottleneck of the costs, time and money.
Strong process discipline is needed to be employed for
understanding the way a product is being produced and the

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normal work processes are being completed in the set time period.

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Table 2: The Mitigation approach
Both table 1 and table 2 gave an overview of the qualitative risk management process that
can affect the normal execution of a project. Corresponding to each of the identified risks, a risk
matrix is prepared that provides an idea of the severity of each of the risks identified.
Figure 1: The Risk Matrix
The risk matrix in the figure above identifies the severity of the risk and accordingly, the
most severe risk can be identified. This is one significant benefits of making use of qualitative
risk management process. The risk matrix shows that the risk R2 should be prioritized and
should be addressed at first. Similarly, the risk R3 can be addressed later.