Free the Broader Management Implications Of Risk To An Organization Essay Example
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The broader management implications of risk to an organization
This paper aims to define the learning from which project managers can learn lesson, implementation of learning and identification of gaps that exist in current studies.
Learning Lessons for Project Managers:
Increased internationalization increased the ratio of complexity and risk as well and managers in order to cope up with these risks such as technological, environmental, regulatory, and financial have to learn to deal with such risks. In organizations, managers understand the ways from which organizational risk can be managed. Managers have to deal with increased risk and when they face such situation make significant investment in risk management. Project managers can relate the broader studies of organizational risk to their real life experiences and can take lessons to manage the risk in future. Managers can get the idea to utilize the different risk management tools that have been applied by other organization to manage their project risk. Studies discuss different tools of risk evaluation (MCDM, portfolio management, and decision tree), risk identification (checklists, cause and effect diagram, influence diagram, and brainstorming), risk analysis (impact grid, sensitivity analysis, Delphi technique and event tree analysis), and risk response (risk response planning chart, predictability matrix, and response planning to project risk). Project managers can also learn the tactics to realize the risk through the utilization of or bringing the learning into practice. Managers can better decide that what tools to apply on project in order to enhance the reliability of the project (Herroelen, 2005). Risk identification is an important component in order to complete the project successfully and managers mostly lack in advanced planning of risk that create problems and reduce the effectiveness of project. Therefore, managers should learn the lesson to identify the risk in advance so they can better make the informed decision to acquire or not to acquire the project. Risk adverse managers can avoid the highly risky projects if they do not find resources to cope up with the risk. The successful project is one that is completed in given time, budged and quality; the demand of managers to over invest in order to reduce the associated risk with project create distortion and advanced identification of risk allow planning the accurate budget (Rawi, 2014). It has been encountered that the rate of project failures is high in those organization where information technology infrastructure exist, therefore in order to reduce the risk it is also essential that proper training to project associated people is given and change is manages properly; manager must not underestimate the power of correct information, must have cultural knowledge, should set real targets, should be conscious in decision making and must not be biased (Pinto, 2013; Kidd and Burgess, 2004).
Learning is not enough, implementation of practices is also important for the successful management of project. Managers should make sure that they are identifying the risk associated with project in advance that will allow managers to take informed decision regarding the acquisition of project and no prepare the responses to deal with risks. All the tools that have been discussed can be applied to the project planning; even managers can apply different risk management software to manage risk properly and accurately such as PERT- master risk expert, master project risk and predict, CBST, and risk and risk plus. Most of this software has major focus on planning process of risk that includes risk recognition, risk analysis, and response development to risk. Managers must acquire sound training that will enable them to implement the informed and authentic approached. It has been re cognized that managers avoid thinking about the potential risk factors, but after realizing the fact that advanced planning has important role in project’s success, managers must implement the project identification tools and techniques in order to realize that if something can go wrong (Papke-Shield, Beise and Quan, 2009). With changing of time the demands of business environment is also changing and mostly employees avoid change that result in project failure therefore, managers should conduct training session in order to keep the employees with change and should give training session regarding the cultural flexibility. Managers should make sure that interaction is maintained (Krane, Olsson and Rolsradas 2012); and all associated members with project are involved in decision making that will serve managers with multiple ideas and present the creative and innovative options to deal with challenges. Risk is not associated with resources; it is also associated with technological developments, trends, competitors, and events; risk is also associated with project scheduling. Organizations in order to sense these sorts of risks develop an appropriate mechanism of information processing and project managers for having the sense of can apply the proper mechanism such as identifying the target market, change in requirements, and realize the innovations that can be made and selection of new technologies through R&D (Petit and Hobbs, 2010). Implementation of all these learning will enable project managers to run the project smoothly and without sacrificing the goals of the project. Managers can implement the “stochastic slack based metrics” in order to assess the associated risk and can establish the project schedule results that are most likely (Mitchell, 2010).
However, it has been identified that current studies on risk management in project are elaborating significant gaps. Such as the gap in current studies is that limited tools of risk planning are discussed, samples in most studies are self-selected and limited that may not represent the larger community of project management and therefore, findings may not be the authentic one that they supposed to be in term of risk planning. Mostly studies focus on particular phases of projects rather to consider the overall project management process. Even the major gap that has been found is that literature does not on the risk management planning’s role that it has in projects (Zwikael and Ahn, 2011; Collyer et al., 2010). Literature review presents the ground for the studies and in some studies, it has been realized that due to the limitation of space, literature review has not been conducted. If each research is considered particularly then the approached that have been used either project based or organizational based, which means findings of each study cannot be applied at general.
It has been realized that the successful project is one that is completed in given time frame, budget and quality (in term of outcomes); and advanced identification of risk - associated with project – enable organization to do accurate scheduling of resources (human capita, budget, technology, and other resources) that results in timely completion of project and managers are able to get the defined outcomes with limited or defined budget.
List of References:
Collyer, S., Warren, C., Hemsley, B and Stevens, C. (2010). Aim, Fire, Aim—Project Planning Styles in Dynamic Environments, Project Management Journal, vol. 41, no. 4, pp. 108-121.
Herroelen, W. (2005), Project scheduling—Theory and practice. Production and Operations Management, vol. 14, no. 4, pp. 413–432.
Kidd, C., and Burgess, TF. (2004). Managing configurations and data for effective project management. In P. W. G. Morris & J. K. Pinto (Eds.), The Wiley guide to managing projects (pp. 498—513). Hoboken, NJ: John Wiley & Sons.
Krane, PH., Olsson, EON and Rolsradas, A. (2012). How Project Manager–Project Owner Interaction Can Work Within and Influence Project Risk Management, Project Management Journal, vol. 43, no. 2, pp. 57-67.
Mitchell, G. (2010). On Calculating Activity Slack in Stochastic Project Networks, American Journal of Economics and Business Administration, vol. 2, no. 1, pp. 78-85.
Papke-Shield, RK., Beise, C and Quan, J. (2009). Do project managers practice what they preach, and does it matter to project success?, International Journal of Project Management, vol. 28, pp. 650–662
Petit, Y and Hobbs, B. (2010). Project Portfolios in Dynamic Environments: Sources of Uncertainty and Sensing Mechanisms, Project Management Journal, Vol. 41, no. 4, pp. 46–58.
Pinto, KJ. (2013). Lies, damned lies, and project plans: Recurring human errors that can ruin the project planning Process, Elsevier Inc. vol. 56, pp. 643-653.
Rawi, MR. (2014). Project Risk Identification for New Project Manager. Project Management Times. Available from http://www.projecttimes.com/articles/project-risk-identification-for-new-project-manager.html [Accessed 13 April 2015]
Zwikael, O and Ahn, M. (2011). The Effectiveness of Risk Management: An Analysis of Project Risk Planning Across Industries and Countries, Society for Risk Analysis, vol. 31, no. 1, pp. 25-37.
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