Crisis Management (Essay Sample)

CRISIS MANAGEMENT
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Introduction
This research paper focus on the qualitative and quantitative risk assessment techniques. It draws up the individual importance and significance of each risk assessment technique and the resulting consequences of an occurrence of the risks to the entire project. An overview of the factors considered during the choice of an implementation criteria is also done and reasons why quantitative risk analysis is chosen over qualitative risk analysis methods. Qualitative and semi-quantitative risk assessments are believed to be adequate in the determination of the specific areas for budgetary allocations. While qualitative risk uses other metrics to evaluate a risk such as the impact of the risk-its success or failure-on the business operations; quantitative risk assessment-including identification, analysis, and evaluation- can be used to determine what tasks and budgets associated with them are defensible to the financial approving authority of an organization (Sameh 2007). Qualitative risk assessments are cheap and cover a wide array of areas, including determining areas where quantitative analysis is required. Researchers often argue that qualitative analysis is most appropriate where risks are low (Munro 2006).
Risk management
This research paper focus on the qualitative and quantitative risk assessment techniques. It draws up the individual importance and significance of each risk assessment technique and the resulting consequences of an occurrence of the risks to the entire project. An overview of the factors considered during the choice of an implementation criteria is also done and reasons why quantitative risk analysis is chosen over qualitative risk analysis methods. Qualitative and semi-quantitative risk assessments are believed to be adequate in the determination of the specific areas for budgetary allocations. While qualitative risk uses other metrics to evaluate a risk such as the impact of the risk-its success or failure-on the business operations; quantitative risk assessment-including identification, analysis, and evaluation- can be used to determine what tasks and budgets associated with them are defensible to the financial approving authority of an organization (Sameh 2007). Qualitative risk assessments are cheap and cover a wide array of areas, including determining areas where quantitative analysis is required. Researchers often argue that qualitative analysis is most appropriate where risks are low (Munro 2006).
 
Risk management
Risk management is often the beginning of any process planning in companies and all the industries. Risk can often befall human existence in all sectors of life activities; from personal life, business decisions and investments to mega industrial undertakings such as restructuring. The success of a venture, or its failure, is often a direct result of the levels of risks undertaken and the success of the management of that risk. Most successful entrepreneurs are often noted to have a characteristic of being risk takers (Cooperberg 2007). The only ways around a risk are to solve or to avoid. While avoiding a risk may seem very safe and comfortable, its result is often a stagnation at the same point in life, risk taking on the other hand, offers opportunity for self-evaluation, and offers invaluable life lessons to the risk takers.
To undertake any serious business venture, the planners-particularly the projects manager- have a duty to curve out a path for the business undertaking to follow to the successful termination. This process of evaluation is a subset of a larger group of activities that are entailed in risk management. The success of the undertaking is often dependent on the manner in which the business management team analyzes the risks involved and comes up with an appropriate way of tackling the risks (Coles-Kemp & Overill 2007). The analysis of risks is often carried out using three major parameters; all which determine the success of a business venture. All these three parameters, including; time, cost and quality are very significant, and they are subjected to risk or uncertainty. These measures enable the project team to plan themselves appropriately, right form the conceptual stage of the project to the implementation and subsequent maintenance by providing necessary allowances for quality adjustments. There are some techniques developed by risk management experts that explain how project management techniques that will enable individuals handle risks. Risks can be handled depending on the nature of projects and involves a series of the project-oriented or project-related measures of handling the risks (Coze & Jean-christophe 2005).
Theoretical approach to project risks
Risks are of different types, and their classification is dependent on the criteria used to identify the particular risks, consequences of the risks and subsequent impact of the risk. One way of classifying risks is by using the Global classification and Elemental classification. According to (Smith NJ and Merna T 2009), this method separates the more general factors that could affect the outcomes of the risk but are generally out of control of the management team from the risks that are associated with key project elements and execution procedures. The factors that are out of control of the project tea includes issues such as "An act of God" such as an earthquake for a construction project. There are other risk factors that are within reach and control of the project management team; these risks can be categorized into market risks-speculative risks- and specific risks-pure risks (Royal Society 1992). The specific risks, also known as static risks, have no potential gain and arises from the possibility of an occurrence such as an accident or a technical failure. For speculative risks, there is a possibility of suffering a loss or a gain that might be physical, financial or technical. The risks that companies undertake can further be classified into business risk or financial risk. Business risks occur as a result of a company’s trading activities with its assets- this risk occurs inform of assets held by debtors as collaterals for loans. Financial risks, on the other hand, are risks that directly rises out of financial involvements and often have an impact only to the equity holders (Douglas & Jennifer 2005).
There is an additional way of classifying risks that are based on the environmental risks, company risks, market risks, and individual project risks. The risk classification based on this scenario is directly affected by the manner in which they affect the business and the particular areas of impact to the business. The environmental risks can be analyzed by carrying out a PESTEL analysis (Stanley J. D 2011) and determining the specific areas from which the risks emanate. Putting this into perspective; Physical environmental risks can be determined by the geographical presence and the natural occurrences that include earth movements and climatic conditions; environmental risks can also be entailed in the description of the political, social setting of the business environment, technological requirements and the legal environments (Kunreuther, Deodatis & Smyth 2004). Though environmental risks are often out of reach of the business organization, it can influence the impact of some factors such as technological modes of operation. The government, on the other hand, can control other factors such social, environmental, legal and political environments. Market forces are also a significant components in the determination of the type of risks. Recession, for example, is a risk that is faced by almost all companies throughout the world. In most cases, risks are unpredictable, and it is often almost impossible to overcome and avoid their occurrence. In such cases, it is very essential for individual business organizations to mitigate their impacts (Guillen, Nielsen & Pérez-Marín 2008).
Risk Analysis
One of the key ways to assess the impact of risk entails a critical analysis of the risk, including all the possible consequences on the financial, physical, and industrial and company environments and performance (Clarke & Doherty 2004). Critical analysis of the risk involves analysis of the individual project management stages by carrying out in risk management planning, identification carrying out an analysis-both qualitative and quantitative, responses and proper monitoring of the project and its control. Risk management involves a series of steps that can be carried out at the different stages of project execution (Douglass 2006).
Risk management planning; it involves carrying out planning the chain of activities carried out in approaching the activities that define the risk. It is always very necessary to make an in-depth study of the project before making a move to mitigate it or counter its results. Planning for risk management is also heavily dependent on the environmental issues that are at hand and the scope of involvement or operation of the project; including its objectives, mission, and the goals. This analysis would require that the project management team studies seriously the strategic goals and make a plan to ensure that the deviations from the initial plans are controlled.
Risk identification; activities that can be used to identify risks entail group sessions or a brainstorming session that will include a group of experts who are a specialist in the project’s various stages. After obtaining a risk management plan, it is essential to use it effectively n the identification of the risk involved. A risk breakdown structure is an activity that shows risk groups, categories and the risk levels at the most detailed and basic levels. Through this, risk mitigation can be done by handling the spe...