Master of Business Administration – Semester 4

Subject Code – PM0016

Subject Name – Project Risk Management

Assignment Set- 1 (60 Marks)

Note: Each question in total carries 10 Marks. Answer all the questions.

Q 1. Describe the five phases of risk management process.

Risk management is the identification, assessment, and prioritization of risks (defined

in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative)

followed by coordinated and economical application of resources to minimize, monitor,

and control the probability and/or impact of unfortunate events or to maximize the

realization of opportunities. Risks can come from uncertainty in financial markets,

project failures, legal liabilities, credit risk, accidents, natural as well as deliberate attacks

from an adversary. Several risk management standards have been developed including

the Project Management Institute, the National Institute of Science and Technology,

actuarial societies, and ISO standards. Methods, definitions and goals vary widely

according to whether the risk management method is in the context of project

management, security, engineering, industrial processes, financial portfolios, actuarial

assessments, or public health and safety.

The strategies to manage risk include transferring the risk to another party, avoiding the

risk, reducing the negative effect of the risk, and accepting some or all of the

consequences of a particular risk.

Certain aspects of many of the risk management standards have come under criticism for

having no measurable improvement on risk even though the confidence in estimates and

decisions increase.

Principles of risk management

The International Organization for Standardization (ISO) identifies the following

principles of risk management:[4]

Risk management should:

create value

be an integral part of organizational processes

be part of decision making

explicitly address uncertainty

be systematic and structured

be based on the best available information

be tailored

take into account human factors

be transparent and inclusive

be dynamic, iterative and responsive to change

be capable of continual improvement and enhancement

After establishing the context, the next step in the process of managing risk is to identify

potential risks. Risks are about events that, when triggered, cause problems. Hence, risk

identification can start with the source of problems, or with the problem itself.

Source analysis[citation needed] Risk sources may be internal or external to the system

that is the target of risk management.

Examples of risk sources are: stakeholders of a project, employees of a company or the

weather over an airport.

Problem analysis[citation needed] Risks are related to identified threats. For example:

the threat of losing money, the threat of abuse of privacy information or the threat of

accidents and casualties. The threats may exist with various entities, most important

with shareholders, customers and legislative bodies such as the government.

When either source or problem is known, the events that a source may trigger or the

events that can lead to a problem can be investigated. For example: stakeholders

withdrawing during a project may endanger funding of the project; privacy information

may be stolen by employees even within a closed network; lightning striking an aircraft

during takeoff may make all people on board immediate casualties.

The chosen method of identifying risks may depend on culture, industry practice and

compliance. The identification methods are formed by templates or the development of

templates for identifying source, problem or event. Common risk identification methods

are:

Objectives-based risk identification[citation needed] Organizations and project teams

have objectives. Any event that may endanger achieving an objective partly or

completely is identified as risk.

Scenario-based risk identification In scenario analysis different scenarios are

created. The scenarios may be the alternative ways to achieve an objective, or an

analysis of the interaction of forces in, for example, a market or battle. Any event that

triggers an undesired scenario alternative is identified as risk - see Futures Studies for

methodology used byFuturists.

Taxonomy-based risk identification The taxonomy in taxonomy-based risk

identification is a breakdown of possible risk sources. Based on the taxonomy and

knowledge of best practices, a questionnaire is compiled. The answers to the

questions reveal risks.[5]

Common-risk checking In several industries, lists with known risks are

available. Each risk in the list can be checked for application to a particular situation.[6]

Risk charting[7] This method combines the above approaches by listing resources

at risk, threats to those resources, modifying factors which may increase or decrease

the risk and consequences it is wished to avoid. Creating a matrix under these

headings enables a variety of approaches. One can begin with resources and consider

the threats they are exposed to and the consequences of each. Alternatively one can

start with the threats and examine which resources they would affect, or one can

begin with the consequences and determine which combination of threats and

resources would be involved to bring them about.

Five steps to risk assessment

Five steps to risk assessment aims to help you assess health and safety risks.

A risk assessment is an important step in protecting your workers and your business, as

well as complying with the law. It helps you focus on the risks that really matter in your

workplace – the ones with the potential to cause harm. In many instances, straightforward

measures can readily control risks, for example, ensuring spillages are cleaned up

promptly so people do not slip or cupboard drawers kept closed to ensure people do not

trip. For most, that means simple, cheap and effective measures to ensure your most

valuable asset – your workforce – is protected.

The law does not expect you to eliminate all risk, but you are required to protect people

as far as is ‘reasonably practicable’. This guide tells you how to achieve that with

minimum fuss.

This is not the only way to do a risk assessment, there are other methods that work well,

particularly for more complex risks and circumstances. However, we believe this method

is the most straightforward for most organisations.

What is risk assessment?

A risk assessment is simply a careful examination of what, in your work, could cause

harm to people, so that you can weigh up whether you have taken enough precautions or

should do more to prevent harm. Workers and others have a right to be protected from

harm caused by a failure to take reasonable control measures.

Accidents and ill health can ruin lives and affect your business if output is lost,

machinery is damaged, insurance costs increase or you have to go to court. You are

legally required to assess the risks in your workplace so you must put plans in place to

control risks.

How to assess the risks in your workplace

Follow the five steps in our leaflet: Five steps to risk assessment  .

1. Identify the hazards

2. Decide who might be harmed and how

3. Evaluate the risks and decide on precaution

4. Record your findings and implement them

5. Review your assessment and update if necessary

Don’t overcomplicate the process. In many organisations, the risks are well known and

the necessary control measures are easy to apply. You probably already know whether,

for example, you have employees who move heavy loads and so could harm their backs,

or where people are most likely to slip or trip. If so, check that you have taken reasonable

precautions to avoid injury.

If you run a small organisation and you are confident you understand what’s involved,

you can do the assessment yourself. You don’t have to be a health and safety expert.

Download the Risk Assessment and Policy Template. This template brings together your

risk assessment, health and safety policy, and record of health and safety arrangements

into one document to help you get started and save time. If you already have a health and

safety policy, you may choose to simply complete the risk assessment part of the

template. We also have a number of example risk assessments to show you what a risk

assessment might look like. Choose the example closest to your own business and use it

as a guide for completing the template, adapting it to meet the needs of your own

business.

If you work in a larger organisation, you could ask a health and safety adviser to help

you. If you are not confident, get help from someone who is competent. In all cases, you

should make sure that you involve your staff or their representatives in the process. They

will have useful information about how the work is done that will make your assessment

of the risk more thorough and effective. But remember, you are responsible for seeing

that the assessment is carried out properly.

When thinking about your risk assessment, remember:

a hazard is anything that may cause harm, such as chemicals, electricity, working

from ladders, an open drawer, etc; and

the risk is the chance, high or low, that somebody could be harmed by these and

other hazards, together with an indication of how serious the harm could be.

Some frequently asked questions

What if the work I do tends to vary a lot, or I (or my employees) move from one site

to another?

Identify the hazards you can reasonably expect and assess the risks from them. This

general assessment should stand you in good stead for the majority of your work. Where

you do take on work or a new site that is different, cover any new or different hazards

with a specific assessment. You do not have to start from scratch each time.

What if I share a workplace?

Tell the other employers and self-employed people there about any risks your work could

cause them, and what precautions you are taking. Also, think about the risks to your own

workforce from those who share your workplace.

Do my employees have responsibilities?

Yes. Employees have legal responsibilities to co-operate with their employer’s efforts to

improve health and safety (eg they must wear protective equipment when it is provided),

and to look out for each other.

What if one of my employee’s circumstances change?

You’ll need to look again at the risk assessment. You are required to carry out a specific

risk assessment for new or expectant mothers, as some tasks (heavy lifting or work with

chemicals for example) may not be appropriate. If an employee develops a disability then

you are required to make reasonable adjustments. People returning to work following

major surgery may also have particular requirements. If you put your mind to it, you can

almost always find a way forward that works for you and your employees.

What if I have already assessed some of the risks?

If, for example, you use hazardous chemicals and you have already assessed the risks to

health and the precautions you need to take under the Control of Substances Hazardous to

Health Regulations (COSHH), you can consider them ‘checked’ and move on.

Q 2. Describe in brief the basic principles followed by the GMP principles

Good Manufacturing Practice or GMP manufacturing principles are the cornerstones of

quality systems utilized in the manufacture and quality testing of products for which a

high level of quality is an overriding concern. Examples of such products are

pharmaceutical products such as drugs and their ingredients, medical devices, and food.

Depending on the country where they are utilized, these principles can either be

guidelines or legally enforced regulations.

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Q 3. Write short note on the following risk categories:

a. Operational risks

An operational risk is, as the name suggests, a risk arising from execution of a

company's business functions. It is a very broad concept which focuses on the risks

arising from the people, systems and processes through which a company operates. It also

includes other categories such as fraudrisks, legal risks, physical or environmental risks.

Q 4. Describe Risk assessment cycle.

Risk assessment is a step in a risk management procedure. Risk assessment is the

determination of quantitative or qualitative value of risk related to a concrete situation

and a recognized threat (also called hazard). Quantitative risk assessment requires

calculations of two components of risk: R, the magnitude of the potential loss L, and the

probability p, that the loss will occur.

Q.5. Describe in brief the major risk handling strategies.

A risk management strategy provides a structured and coherent approach to identifying,

assessing and managing risk. It builds in a process for regularly updating and reviewing

the assessment based on new developments or actions taken.

Q 6. Define change and the various types of changes

Most of the 41 participants in our study were undergoing changes of acculturation.

As immigrants to the United States, they were confronting the formidable tasks of

gaining fluency in the English language as well as in their new culture.

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Master of Business Administration – Semester 4

Subject Code – PM0016

Subject Name – Project Risk Management

Assignment Set- 2 (60 Marks)

Note: Each question carries 10 Marks. Answer all the questions.

Q 1. Describe the seven step risk management planning process

Risk is real for any company or organization. Don't kid yourself. Things happen when

you least expect them to happen. Are YOU ready for the unimaginable, the unexpected,

the unwanted? As an executive, have you put your head in the sand around risk? Do you

pretend that all is well, and nothing will change? If so, it's time to face reality: data gets

lost, buildings burn, people resign. When any of these occur, your organization is at risk

for malfunction, inefficiency, chronic struggle, revenue loss, and even total failure. Is this

the path you want to go down?

Beginning now, you can initiate the process of developing your organization's risk

management plan. Take charge. Form a committee representing Board members and

staff, and ask them to partner with you to create this critical document.  Make sure

everyone understands the importance of the work, and explain to them how they can

benefit from contributing to the finished product. Risk managements plans are not

optional; they are essential for every company, large or small. There are no valid

exceptions.

Implement the following seven steps, and give yourself and others a huge slice of peace

of mind:

1.  Define what risk looks like for your organization. 

What constitutes risk in your shop? Threats to normal operations? Threats or

compromises to people's safety? Loss of physical and electronic property? Loss of

revenue? Decreased public/community support? Unethical behaviors?   Create a

comprehensive definition of risk that means something to YOU and YOUR organization.

2.  Identify specific risks. 

Ask the committee to brainstorm as many different risks as they can possibly

imagine. Record them on a white board or flip chart. Examples of various risks

include: firing of the chief executive, dwindling interest in one of your major products,

departmental silos, Board infighting, inability to fundraise, economic downturn, layoffs,

building fire, computer crashes, philosophical differences between key employees,

extended leaves for managers, interruption in receiving necessary supplies. All of these

are potential risks, and there are many others. Continue brainstorming until the group

believes they have come up with an exhaustive list.

 3.  Categorize each risk. 

Determine category names for the identified risks. Examples may be: Chief Executive,

Board of Directors, Physical Property, Technology, Data, Employees, Products or

Services, Customers/Clients, Stakeholders,. Place each risk under one of the selected

categories. Create as many category names as you need.

4.  Rank each risk according to severity or significance. 

Choose headings such as "most severe", "moderately severe", "of minimal concern". You

don't have to use these same words for your headings, but be sure that your phrases

adequately differentiate between the degrees of seriousness. Perhaps you would like to

color code each risk according to its significance heading: red for "most severe"; black

for "moderately severe", and green for "of minimal concern". Set it up the way it best

works for you and your organization.

5.  Develop strategies for reducing or eliminating each risk. 

Begin with the risks under your "most severe" heading. It's critical that you don't delay in

thinking through possible solutions for those major issues. Ideally, determine multiple

strategies for each risk. Be sure to consider who within the organization is going to be

responsible for implementing the various strategies, and the resources needed to

implement them. Omitting this information from the plan only causes big problems

later.   

6.  Write your plan. 

Using all of the above input, shape a readable document. Practicality is paramount

here. The plan is worthless if nobody can follow it, interpret it, or actually rely on it as a

guide during crisis. After it is compiled, seek feedback from the committee as well as

other employees and Board members. Incorporate changes where indicated. Check for

evidence of common sense throughout the document. Hold yourself accountable to a high

standard around common sense. A pie-in-the-sky risk management plan doesn't serve

anyone.

7.  Test some of those strategies in your plan for viability. 

Do they work? Can they work? Why or why not? Where are the pitfalls? What steps are

missing? Would you benefit from having certain outside experts review your

strategies? If so, which types of experts? 

Revisions to the plan may occur annually, as situations arise and your organization lives

one or two of the strategies firsthand. Hindsight is often wiser. Don't be afraid to toss

some plan content when you know for a fact that this is what you must

do. Remember: the plan needs to be current. On a day you least expect it, someone has to

grab that document, refer to a particular section in it, and act upon it--fast.

Q 2. Write advantages & disadvantages of the following:

a. Brainstorming

Brainstorming is a relatively simple and cheap way of generating ideas. Although it can

be done individually, it usually involves a group of people who are looking to generate

ideas that will provide a solution to a problem or situation. The aim is to generate as

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Q 3.Describe benchmarking, its advantages & limitations

There are a number of definitions used to describe benchmarking , all of which may have

their place. The European Benchmarking Code of Conduct defines it as a technique

whichis about making comparisons with other organisations and then learning the lessons

that those comparisons throw up.

Q 4. List the steps in risk analysis.

Risk assessment is a step in a risk management procedure. Risk assessment is the

determination of quantitative or qualitative value of risk related to a concrete situation

and a recognized threat (also called hazard). Quantitative risk assessment requires

calculations of two components of risk: R, the magnitude of the potential loss L, and the

probability p, that the loss will occur.

Q 5. Define the major content of a risk register

ntroduction to quality in risk registers

Risk registers, while not always the best way to understand risk and controls, are

becoming increasingly widespread. In many cases writing a risk register is an imposed

requirement so, like it or not, it has to be done. Not only do more organizations have

them, but each organization has more of them and they are getting bigger.

Q 6. Explain the difference between program and project in Business

Many people are uncertain about the difference between a project and a program (also

please refer to note on spelling conventions used on ICB.com).

Management consultants are regularly involved in supporting clients through periods of

complex change and consequently clarity on the basic definitions of a project and a

program, and the difference between a project and a program are important. 

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