This paper will analyze the concept of Risk Management. The main aim lies in discussing how Risk Management can be achieved in the most effective way and additionally, who, in an organization, will take responsibility for an effective management. It will be argued that the question of how responsibility is distributed within an organization is central to the effectivity of Risk Management. How is the risk measured, ranked and outlined by the organization and the management?
The author will outline a possible strategy on how to incorporate a risk management strategy in the form of a visual diagram into a project. Finally, it will be discussed how a professional execution of Risk Management can result in reducing the Risk, its impact on the project and how an effective Risk Management system can be supported and sustained by proper communication throughout the organization
At a glance
- A risk management sheet designed for the art fair project
- Five-step risk management model combining Zsidisin and Ritchie, Mullai and RKC approaches
- 12 sources in the bibliography
- 2 figures and 1 table
Contents
1. RISK MANAGEMENT AND DELEGATION OF RESPONSIBILITY
1.1 Effectivity
1.2 The Risk Diagram
1.3 Responsibility
1.4 Measuring & Ranking of Risks
1.5 Outlining of Risk
2 CONSTRUCTION OF A STRATEGY FOR PROJECT RISK MANAGEMENT
2.1 Project Description
2.2 Risk Management Strategy used
2.3 Step One: Risk Identification
2.4 Step Two: Risk Analysis
2.5 Step Three: Risk Response Strategy
2.6 Step Four: Risk Monitoring and Control
2.7 Step Five: Communication of Risk Management
3 CONCLUSION
Objectives and Topics
This work examines how appropriate practices can make project risk management more effective and help minimize risk. It asks how responsibilities should be distributed, how risks can be measured and ranked, and how communication can support a practical risk management strategy.
- Organizational responsibility and stakeholder involvement
- Visualization of the risk management process
- Risk identification, measurement and ranking
- Risk response, monitoring and control
- Application to an art trade show in Switzerland
- Communication throughout a project
Excerpt from the Book
1.4 Measuring & Ranking of Risks
Before starting a Risk measurement, possible risks have to be indicated and compiled into a list which needs to be considered in either a qualitative or quantitative process, like mentioned by Jüttner and Ziegenbein (2009, p. 213). We need to be clear what categories we want to measure, like shown on Table 1, The probability of the Risk occurring and their possible impact on a certain area are being measured.
Although, simple measurements don’t give profound understanding of the exact area the impact may inflict problems on. Possible Risk areas of impact need to be clearly stated, for example: cost, health, resources, quality, time schedule; this all may have a high impact on the quality, but a medium impact on human health, nevertheless with a high probability of occurrence. As shown in Figure 5.5 by Gaudenzi (2009, p. 79) each process in a defined area will be measured independently.
However, as Asbjornslett mentioned (2009, p. 26), it is important to have constructed a way to approach it systematically in order not loose time and resources on structuring the risks. It can be considered ranking Risks from low to high or using a scale with numbers. Like stated by Jenyes (2002, p. 58 ‐ 60), there is an efficient system with a scale categorizing the Risk in low, medium and high Risk. The way Jenyes (2002) has elaborated on each level with a short description how the risk affects the project. This way a better understanding is given of the possible harm inflicted on a specific area in case the Risk would occur. Using a scale with a numerical system makes it easier to rate the risk. If we have a fair amount of risks where a more specific rating would be appropriate, without having a lot of Risk just rated as medium or high, the numerical system achieves a more differentiated list of ranking Risk.
Chapter Summaries
1. RISK MANAGEMENT AND DELEGATION OF RESPONSIBILITY: This chapter discusses effective risk management, a visual process model and the allocation of responsibility. It also considers how risks can be measured, ranked and documented.
2 CONSTRUCTION OF A STRATEGY FOR PROJECT RISK MANAGEMENT: The author develops a risk management strategy for an art trade show, addressing identification, analysis, response, monitoring and communication. A risk management sheet and ranking list illustrate the proposed approach.
3 CONCLUSION: The conclusion emphasizes organization-wide implementation, stakeholder acceptance, clear communication and training adapted to different organizational levels.
Keywords
project risk management, risk identification, risk analysis, risk assessment, risk ranking, risk response, risk monitoring, risk communication, stakeholder engagement, organizational responsibility, art trade show, risk management sheet
Frequently Asked Questions
What is the work about?
It examines how organizations can manage project risks effectively and reduce their potential impact.
What are its central themes?
The main themes are risk identification, analysis, response, monitoring, communication and the allocation of responsibility.
What is the primary research question?
The work asks how appropriate practices can assist in minimizing risk and how responsibility for effective risk management can be organized.
What approach does the author use?
The author draws on published risk management models and literature to construct a visual process and apply it to an art trade show scenario.
What does the main body cover?
It discusses organizational responsibilities and risk measurement before developing a five-step strategy for a project.
Which keywords characterize the work?
Key terms include project risk management, risk assessment, risk ranking, stakeholder communication and risk monitoring.
What project is used to illustrate the strategy?
The strategy is designed for a Swiss art trade show planned by a five-person team and expected to attract 30,000 visitors over three days.
What practical tools does the work present?
It presents a risk management process diagram, a risk management sheet and a risk ranking list.
How is communication incorporated into the proposed approach?
Communication connects the risk management steps and is intended to keep relevant stakeholders informed throughout the project.
- Quote paper
- Patrick Wiget (Author), 2019, Effective Risk Management. How can appropriate practices assist in minimizing risk?, Munich, GRIN Verlag, https://www.grin.com/document/942882
