Applying risk management
- Risk analysis
- Risk monitoring and control stage
The risk management process is imperative in identifying, assessing, monitoring, and management of risk. These steps are vital in analysing the vulnerability of the risks through prioritization based on their severity. Risk assessment is an essential step in the risk analysis stage. Applying risk management strategies entails the identification of potential risks to a business and the subsequent enactment of prioritizing on their occurrence. Therefore, risk analysis comprehensively prioritizes the occurrence of risks. In this case, the identified risks are determined on their likelihood to occur and the consequences regardless of the risk treatment put in place. Nevertheless, before the identified risks go through risk monitoring stage, their threat levels and severity are determined. Accordingly, the versatility of a successful risk management plan provides a detailed explanation of the components of risk management which includes, risk identification, analysis and the mitigation strategies that are further used in stipulating the risk treatment processes (Aven, 2008).
In order to identify threats and vulnerabilities to an organization, risk analysis provides a procedural process of deciphering all the mentioned uncertainties. According to Aven (2008), risk analysis is fundamental in ascertaining the probable impacts of the identified risks and their subsequent implementations on how they can be eliminated or reduced (p.3). Concisely, risk analysis is the procedural investigation of the uncertainties and risks that are encountered in organizations. There are two methods used to undertake risk analysis, namely; qualitative analysis and quantitative analysis.
[...] Heldman, K (2009) Pmp Project Management Professional Exam Study Guide: Epub Edition. John Wiley & Sons Inc. [Online] Available at: [http://books.google.co.ke/books?id=MDvlyPBpAiMC&pg=PA450&dq=risk+reass essment&hl=en&sa=X&ei=FJrNUfuaN4jfswattIFQ&ved=0CEEQ6AEwBA#v=onepage&q= risk%20reassessment&f=false (Accessed on June 28, 2013). Kerzner, H (2013) Project management: A systems approach to planning, scheduling, and controlling. Hoboken, New Jersey: John Wiley & Sons, Inc. [Online] Available at: http://books.google.co.ke/books?id=QgQQC5qRtzgC&pg=PT863&dq=risk+monito ring+and+control+in+project+management&hl=en&sa=X&ei=bFnNUc- bI8qUswbF0IDQCw&ved=0CEAQ6AEwAw (Accessed on June 28, 2013). McGeorge, D and Palmer, A (1997) Construction Management; New Directions. London; Blackwell Science. Newell, MW (2005) Preparing for the project management professional (PMP) certification exam. [...]
[...] This is in regard to the dynamic nature of some risks as the project progresses on. According to Kerzner (2013), risk monitoring and control stage is a crucial stage where the managers make sure that risk plans are executed whilst watching over for the newer risks. These sentiments are shared by Newell (2005) who states that this stage is vital even in the process of keeping track of the identified risks and implementing strategies that effectively reduces the risk (p. [...]
[...] As stated earlier, we embraced a qualitative analysis method in undertaking and describing risk analysis. Evidently, qualitative approach is the most used method because of its principalities that are efficient in terms costs and outcomes. This is realized in the process of prioritizing the identified risks in the risk response plan (PMBOK, 2004). In addition to being the widely used approach, qualitative risk analysis does not incorporate numerical values in ascertaining the identified risks. Rather, the approach embarks on a strategic plan where the identified threats and uncertainties are defined and extend of their impact outlined. [...]