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Risks and their Mitigation Strategies in Procurement
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Institution
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Risks and their Mitigation Strategies in Procurement
One of the risks in procurement is poor stewardship (Project Management Institute, 2021,
p. 51). A good steward has integrity, is trustworthy, and complies with the available policies.
When a person is a bad steward of the available resources, they channel some of the company
resources elsewhere and affect the overall quality of the products since there are no sufficient
resources to produce the best quality. Another risk is negative stakeholder influence.
Stakeholders with vested interests who affect an organization’s operations will make the
company deviate from its goals to please them. They affect the timelines of projects. Also, they
contribute to additional costs when they propose the company to spend on unplanned
expenditures.
A strategy to mitigate poor stewardship is to ensure transparency (Pysmenna & Drozd,
2024, p. 136). The strategy ensures that everyone within the company is accountable so that none
of them acts for their selfish gains, especially during the procurement process. A strategy that a
company can use to overcome negative stakeholder influence is to avoid agreements with
stakeholders, such as co-financing, that jeopardize the integrity of the company (Warmate, 2021,
p. 22). Risk assessment and risk response plans help companies to be prepared for any issues that
might arise in the future so the severity of these issues does not become detrimental to the
organization. Promoting transparency and avoiding agreements that jeopardize companies'
positions are effective when bidding for tenders and producing a product that matches the market
quality of similar products.
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References
Project Management Institute. (2021). Guide to the Project Management Body of Knowledge
(7th ed.). Project Management Institute.
Pysmenna, M., & Drozd, N. (2024). Transparency of procurement management via the project
management tools. Ekonomìčnij Analìz, 34(1), 136–143.
https://doi.org/10.35774/econa2024.01.136
Warmate, S. M. S. (2021). Stakeholder management in public procurement: Rethinking the
engagement strategy for cofinancing in Rivers state, Nigeria. International Journal of
Management Research and Economics, 1(3), 22–43.
https://doi.org/10.51483/ijmre.1.3.2021.22-43
