Project Management V Assignment

BBA 3626, Project Management Overview 1

Course Learning Outcomes for Unit V Upon completion of this unit, students should be able to:

5. Analyze risks by identifying their potential impact.

Reading Assignment Chapter 10: Project Risk Planning

Unit Lesson Unit V will discuss project risk management principles. The following is a good quote from Rhonda Wendler that states what risk management is in a nutshell: “While project managers cannot prevent hurricanes, through careful risk planning, actions can be taken to greatly mitigate the impact” (as cited in Kloppenborg, 2015, p. 269). One may ask, why should we care about project risk management anyway? Without following good project risk management principles, a project is most likely to fail and be doomed from the beginning. The project plan should focus on risk management at the beginning of the plan (Turner, 2014). No project is risk free which is why risk project management is important. Risk can be defined as “an uncertain event or condition that, if it occurs, has a positive or negative effect on project objectives” (Larson & Gray, 2014, p. 205). A consequence is the result of an occurring cause. For example, a cause may be the Ebola virus. The event would be if the team comes down with the Ebola virus. A cause may also be a change of scope requirements, and the event would be the product needs to be redesigned. The cost, schedule, and quality of the product will be impacted if these events happen. Potential risks need to be identified before the project starts (Larson & Gray, 2014). The following is an example of poor risk management. The Snapple Company wanted to erect the world’s largest popsicle (25 feet, 17 ½ tons) in New York City, but the popsicle melted faster than anyone expected. People slipped in this mess of goo as it melted to include bicyclists and pedestrians. This popsicle flooded Union Square. Many streets had to be closed down while the firefighters hosed down the slippery mess. The organizers were not sure why the popsicle melted so fast and had not expected what happened. This is a funny example of a project gone wrong. The company had not planned for this risk in the project (Larson & Gray, 2014). The first step in the risk management process is to identify potential risks. This entails analyzing the risks to see how they affect the project. One should make a list of all the possible risks that may affect the project. The next step is the risk assessment, which entails evaluating the risks in terms of severity of impact, likelihood of occurrence, and whether the risks be controlled. The next step is the risk response development, which involves developing a strategy to reduce the damage potential and developing a contingency plan to address the risks. The final step is the risk response control. This last step involves implementation of risk strategy, monitoring and adjusting the plan for new risks that may occur, and the change management process (Larson & Gray, 2014). The following is an example of good risk management: The World Cup soccer event will be hosted by the Emirate state of Qatar in 2022. The question that many are asking is how one can play soccer in the extreme heat of the desert. “Qatar plans to build nine fully air-conditioned open-air stadiums” (Larson & Gray, 2014, p. 220). Qatar conducted a cooling technology demonstration to show the selection committee that they could keep the players and the fans cool enough to play soccer and observe. They used a prototype for a small test stadium and tested this when the temperature was 114 degrees. The result of the test showed that the inside

UNIT V STUDY GUIDE

Project Risk Management

BBA 3626, Project Management Overview 2

UNIT x STUDY GUIDE

Title

temperature was 73 degrees which is comfortable. A nearby solar farm would provide the power for this technology. Even though the test was down under a small stadium scenario, there will be risks associated with larger stadiums with scaling the technology to meet the demands (Larson & Gray, 2014). Let’s discuss risk management as it applies to climbing Mount Everest. Can one even imagine the number of risks involved in such an endeavor? Let’s discuss the project risk management strategies that climbers use prior to climbing the enormous mountain. First, “the climbers spend more than three weeks acclimating their bodies to high-altitude conditions” (Larson & Gray, 2014, p. 219). In this example four base camps will be used during the final stages of the climb. The shortage of oxygen is a risk that they take into consideration by using oxygen masks and bottles during their final ascent. They have to worry about hypoxia, disorientation, and lightheadedness because of the lack of oxygen due to the heights they are climbing. Normally, the path is staked out and roped off by other climbers who were there first. One must hope that they are not the first of the season to climb the mountain. The climbers also receive weather reports up to the last minute to see if the weather is going to be a risk at the time. The native Sherpas are the ones who carry up the supplies to the base camps. Finally, most climbers join a ritual performed by the Sherpas which is “intended to summon the divine support of the gods before beginning their ascent” (Larson & Gray, 2014, p. 219). This particular example is of six climbers who died while trying to climb Mount Everest, which illustrates the risks of mountain climbing in the extreme. Even after taking the actions listed above, the mountain climbers still did not make it. There is a death zone that the climbers are aware of when climbing the mountain. This zone occurs beyond 26,000 feet where the body and mind can quickly deteriorate even while using oxygen masks. It normally takes 18 hours to make a round trip to the top and back under fair conditions back to the fourth base camp. Climbers must leave early in the morning to get back before it gets dark and final exhaustion sets in. There are many risks associated with mountain climbing that must be accounted for. Even while accounting for most of these risks, many people have lost their lives climbing this most magnificent mountain. The reason for so many lives lost is due to the climbers failing to take into consideration the turnaround time and pushing forward to the top of the mountain. The climbers forgot about this most important risk factor and just went on and lost their lives. The most difficult part of this mountain climbing journey is getting back to the base camp. A contingency plan needs to be created for these climbers in case they encounter unanticipated bad weather. A predetermined turnaround time is established by the guides to ensure the climbers return safely. Some climbers ignore the established guidelines because they are not disciplined and just want to reach the summit, no matter what (Larson & Gray, 2014). The lessons learned in these examples is that risk management is an important process that should not be ignored and should be thought of at the beginning of a project. The risks need to be taken into consideration with a contingency plan. Risks cannot be ignored because they are real and relevant. Remember no project is risk free.

References Kloppenborg, T. J. (2015). Contemporary project management (3rd ed.). Stamford, CT: Cengage Learning. Larson, E., & Gray, C. (2014). Project management: The managerial process (6th ed.). New York, NY:

McGraw-Hill. Turner, J. (2014). The handbook of project-based management (4th ed.). New York, NY: McGraw-Hill.