Project Risk Management: Definition, Evolution, and Practical Applications

Q1: Understanding Project Risk Management

Q1: According to PMBOK (2000) “Risk management is the systematic process of identifying, analysing, and responding to project risk. It includes maximizing the probability and consequences of positive events and minimizing the probability and consequences of adverse events to project objectives” (p.127).

Explain the meaning of this definition, discuss the evolution of risk through time and present what are the several phase that comprise the Project Risk Management Process.

Q2: Applying the risk management process in projects, use the attached case study to complete the following:

a.Identify what you consider to be the most important risk the project faces. (20%)

b.Develop qualitative evaluation of risk using appropriate tools (e.g. risk threshold definition table, the probability/impact table and/or matrix, top risks table) and explain what could influence the use of a quantitative approach instead. (20%)

c.Identify and critically evaluate the risk response plan bearing in mind the four possible different strategies. (20%)

Q3: “A well-constructed and dynamic risk register is at the heart of a successful risk management initiative. However, there is a danger that the risk register may become a static document that records the status of risk management activities at a moment in time. The practical implications of this are that senior management may consider that attending a risk assessment work- shop and producing a risk register fulfils their risk management obligations and no ongoing actions are required”

Critically discuss this sentence and support your discussion with the application of this statement to your case study.

Hyde Park Stadium

The Mayor of London has decided to approve a proposal to build a new venue to host mega events in Hyde Park. Due to the specific characteristic of the project and to the site restrictions the construction has to follow some very specific specifications. The new venue will be named Hyde Park Stadium. The project is due to start in November 1st, 2020 and be completed no later than the 2nd of April 2023.

The construction will comprehend several phases. Some of the works will be performed on site and others will only consist of the assemblage of the structural elements and roofing (see Table 1).

To ensure that there will be no dead periods, those works to be performed off site need to be ordered and received on time.

The total duration of each one of the phases depends on labour to be allocated (see Table 2). However, the size of the team will also have consequences on the equipment to use, which means that costs associates with each team are not directly proportional with its size (see Table 3).

The standards of production for each activity are presented in Table 2.

Work force for the project can be hired either locally (London) or internationally (Dublin and Mumbai). The available workforce is presented in Table 4.

Labour costs are presented in Table 5. The transportation costs are presented in Table 6.

1.There are three groups of possible workers to do the works. The unitary cost is different as each group represents different level of qualifications and a different origin in terms of location. This situation is due to the lack of highly qualified workers in London.

2.The levels of qualification of the workers (L1 to L4) does not allow any swap. That is, a L2 worker cannot perform the work of a L1. And the same applies to L3 and L4.

3.The workers will arrive directly from their home country one day ahead of their working schedule. The transportation cost is supported by the Contractor.

4.The equipment needed depends on the number of workers and the standard of construction (see Table 3).

5.During the time of work, all workers will be hosted in a hotel in London and all expenses will be supported by the Contractor.

6.The CEO is conscient of the risk of not having the construction concluded before the deadline. Therefore, he has established a bonus for earlier completion of the project. This bonus will be awarded to the members of the Project Management Team (see Table 8).

7.All workers are only allowed to work 8 hours per day and 5 days per week. However, if at any overtime is needed, the cost of the worker will increase in accordance with Table 7. Furthermore, the following day will be taken off as a way to lower the workload and ensure quality in construction works.

8.If any worker is allocated for a period of less than 8 hours per day still he/she will be paid 8 hours.