Risk Management in Project Management: A Comprehensive Overview

This project explores the critical role of risk management in project management, emphasizing its application through various stages of project planning and execution. The document begins by defining risk management and its significance in ensuring project success, highlighting the potential consequences of inadequate risk assessment and mitigation. The analysis focuses on identifying major risks, such as resource constraints, scheduling issues, and technological limitations, which are particularly relevant in a hotel expansion project. The project outlines the importance of creating a robust risk management plan, detailing key elements like services, activities, resources, schedules, budgets, and assumptions. It also presents a comprehensive overview of risk management processes, including risk identification, communication, assessment, response development, and corrective actions. The project underlines the benefits of effective risk management, such as successful project completion, avoidance of major setbacks, and the ability to seize new opportunities. The document draws on several scholarly sources to support its arguments and offers practical strategies for integrating risk management into project management practices. The project emphasizes that without proper risk management, there can be delays in project completion and failure to achieve project goals and objectives. The document underscores the necessity of risk management tools in every project to achieve several benefits. The project concludes by emphasizing the importance of consistent risk management to enhance overall project efficiency and organizational value.

RISK
MANAGEMENT

Project management is an application of tools, skills, knowledge and techniques being
undertaken for accomplishing the project. According to Burke (2013), it is a well known fact that
project is specific and has to be carried out in the overall time allocated. Apart from this, various
risks are associated with the project which project manager or other type of individuals
associated with the project has to undertake (Burke, 2013). Identifying the major risks is
regarded as very important and in case if corrective actions are not taken for dealing with risk it
can be lead to decline in overall efficiency of the business. As per view of Young (2007) Further,
proper plan is developed for managing all the risks and this supports in conducting the entire
project in effective manner within the time frame and cost. Moreover, identifying the major risk
is one of the key stages and success of entire project depends on the same (MAJEED, 2012).
Apart from this, development of proper plan is must and all the stages present have to be
followed in proper sequence for the growth of business carrying out project. Risk generally
refers to possibility of loss or some other type of injury and is regarded as uncertain event which
is not in control of any individual.
According to Olsson (2008) risk management as a techniques focuses on identifying and
assessing the risk linked with the project and main focus is on minimizing the overall impact. In
project management different type of planning along with control techniques are present which
company has to undertake for operating efficiently (Fischer and et.al., 2010). However Kutsch
(2008) argued that Proper plan is prepared before undertaking any project where all the activities
have to be carried out in proper sequence. For instance if any hotel is expanding its range of
services and for this project key elements of plan are services, activities, resources, schedule,
budget, risks and assumptions (Turner, 2014). Services are one of the main elements where
management of hotel has to identify what kind of new services will be delivered to its target
market. Apart from this quality requirement along with pricing strategies have to be undertaken.
As per view of Maylor (2003) next key element is activities in which the responsible
authorities have to decide what are the crucial activities which have to be carried for effective
implementation of the project. Further, resources required have to be estimated such as financial,
human, technological etc and this is also one of the most important stages linked with success
and growth of entire project (Wang and Yuan, 2011). However, Turner (2014) argued that
authorities have to prepare budget on the basis of which financial resources will be distributed in
each and every project. This can lead to effective utilization of financial resources and can be

fruitful for the entire project also (Arena, Arnaboldi and Azzone, 2010). Apart from this, one of
the most crucial elements is risk where responsible authorities have to identify what are the key
risks associated with the project and by identifying them in advance it is possible to take
corrective actions for managing them. Last element is assumptions linked with the plan which is
also important. Therefore, with the help of all these stages planning can take place for the project
associated with hotel (Hoyt and Liebenberg, 2011).
Considering the present project of hotel expansion services various risks are associated
with this project which is resource, scheduling, technology etc which are necessarily required to
be undertaken. According to De Bakker, Boonstra and Wortmann (2010) resource is one of the
major risk where it might be possible that individuals associated with project are not be identify
the key resources required in expansion of services (Jin and Zhang, 2011). Apart from this, due
to presence of ineffective resources it is not possible to carry out the entire project in effective
manner. Moreover, technology is also one of the main risks where it may be possible that
appropriate technology or other tools may not be present in development of services. So, this risk
can reduce the overall efficiency of the project. However Wang, Lin and Huang (2010) argued
that, scheduling risk is also one where unexpected deal, errors in estimation along with natural
factors can adversely influence the entire project. Therefore, these are some of the major risks
associated with the present project (Sodhi, Son and Tang, 2012).
As per view of Kutsch and Hall (2010) risk management is regarded as an integral part of
project management as through this it becomes possible to identify, analyze and mitigate risks.
Further, it directly leads to success of the project (Ebrahimnejad, Mousavi and Seyrafianpour,
2010). But on the other hand, most important tasks is to determine the overall risk on the basis of
which plans are prepared so as to deal with the same. According to Turskis, Gajzler and
Dziadosz (2012), absence of risk management technique along with other type of tools can lead
to delay in project where all the aims along with objectives cannot be accomplished (Turskis,
Gajzler and Dziadosz, 2012). Apart from this, it can provide large number of benefits such as in
case if hotel management adopts effective risk management plans during expansion of its
services then it provides large number of benefits to business. Some key benefits are it ensures
successful completion of project, avoid big disasters, provides mental satisfaction as well as
helps in obtaining new opportunities (Purdy, 2010). As per view of Hwang, Zhao and Toh
(2014), it is well known fact that implementation of any project requires large investment and

due to this reason it is necessary to adopt risk management tools (Hwang, Zhao and Toh., 2014).
It directly provides base in project planning where all the major goals along with objectives of
project can be accomplished easily and in effective manner. On the other hand, for effective
management of risk various stages can be followed which starts with identifying risks in the
early stage, communicating about risk, considering opportunities along with threats, prioritizing
risks, assessment, developing response to risk and taking corrective actions (Abdelgawad and
Fayek, 2010).
Therefore, in this way, risk management is quite effective which enhances overall
efficiency of the project being undertaken. Apart from this, it supports in determining the major
areas where risks can adversely influence the project. As per view of Osipova and Eriksson
(2011) by taking corrective actions against the risks it is possible to accomplish the aim behind
undertaking the project and in turn positively affects the entire organization. Moreover, it is
possible to utilize all the resources in appropriate manner and provides a base in enhancing
overall value of the project. In every project, risk management tool must be undertaken so as to
obtain larger number of benefits (Wang and et.al., 2010).

REFERENCES
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Online
MAJEED, M., 2012. [ONLINE]. Risk Management: an Important Part of Project Management.
Accessed through: <http://project-management.com/risk-management-an-important-part-
of-project-management/>. [Accessed on 11th March 2016].
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