Risk Identification Techniques (Research Proposal Sample)

Risk Identification Techniques
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Synopsis
Risk identification techniques are vital for project managers. All projects have their risk factors that can reduce the significantly affect the amount of expected returns on investments. Every project manger should have the skills and the expertise to identify and mange risk as this paper will discuss. The skills are the only way that accurate forecasts can be made regarding potential risk factors that can affect the returns of a particular project. Knowledge of risk identification is also important for investors because they are interested in earning on the investments they make. Most risk takers can invest in highly risky projects as long as they are certain about the capability of project managers to correctly identify risk and find the necessary mitigation strategies. Owners of firms can also benefits from risk identification knowledge. Effective project management is vital in enhancing the value of the firm. Shareholders keen to maximize their wealth should possess risk identification techniques for them to make informed choices about the projects to consent for investments.
The objectives of researching on risk identification techniques include imparting the right knowledge to users of this information to avoid accumulation of risk on projects as a result of inaccurate identification techniques is a fundamental aim of the research.
Project managers and other users of this information need to understand the unique aspects of different projects. Through this research they can understand the variability of one project to another because of the constant evolution of the environment of technical projects.
The number and severity of risks continues to grow as economies become complex. This information will significantly assist interested parties to avoid projects doomed for failure by identifying and applying best practices in risk identification and mitigation.
Different types of risk identification methods will be analyzed through this research including a clear highlight of other uncertain events that arise from the uniqueness of a project rather than the conventional market forces that are potential risk causatives.
Search strategy
The sources of information were mainly books and journals that have relevant content about risk management. Considering that it is one of the oldest and at the same time dynamic topic, it was important to get sources that provide successive insights on the traditional and contemporary techniques of risk identification. The key words used to get strategic concepts on this topic are, risk management, risk identification, project type and project life cycle.
Risk management is the entire topic in which risk identification is incisively discussed; risk identification is the main focus of the paper that is to ensure that the core objectives are achieved at the end of the dissertation. Project types are the basis of explaining different risk identification techniques. Different project types will be outlined with their unique and general risk identification techniques. Technical projects will be compared with general projects in terms of the level of uncertainty and the risks associated with each of them. The project lifecycle as a keyword finds academic sources that discuss risk identification techniques at every stage of a project lifecycle. As a project advances to more critical stages the techniques will change because of the increasing uncertainties of each stage.
The selection of the core sources above was based on their applicability to the research focus of the dissertation. All of the four sources are academic and were written or edited by professional academicians on risk management. The information in them has specific examples of different projects in regard to risk identification. By applying the concepts in these books, beneficiaries can appreciate the varied and dynamic nature of project management as a technical skill. One additional source had information about the correct guide for managers to follow in project management. It was more specific but it serves to provide a comparison with the theoretical approach from the core sources.
Literature Review
Brush, (2005) research reviews defined risk as any uncertain event associated with the work of implementing a particular project. The definition is conventional with other universal definitions while it further attaching the definition with factors that could be used to identify inherent risks. The objective of the research review was to correlate risk as a product of two main factors: the expected consequences of the occurrence of the uncertain event and the probability that the uncertain event might occur. All the risks involved within the entity are distinct and different from each other. Employing this concept is vital in identifying the particular risks associated with a particular project. Risk can be categorized in terms of micro or macro depending on the population that the risk affects.
Kmec (2011) article provides an assessment on the risk identification methods. The author outlines that the methods are a synthesis of techniques and existing tools in the society. The risk is viewed as a temporal hierarchy in which major decisions can be made based on the hierarchical level. Kmec (2011) argue that the risk identification process follows a phase in which it commences with operational phase, major decision phase, project phase, adjustment phase, and routine respondent phase. The article outlines the need to focus on this temporal hierarchical risk identification strategies in an attempt to achieve the desired success. It concludes by pointing out that risk identification is continuing an evolution, and it is the task of the management to develop measures that can determine the trend in the risk identification process and technique.
Consequently, Mojtahedi et al. (2010) also asserts that there are different high-level techniques of identifying risk in any project. One of them is assessing the risk framework of the project. Assessing a risk frame-work in a project has to consider three key factors: Technology, Marketing, and the entire manufacturing process. The article established an important relationship of three aspects that managers should use to identify inherent risks. The article analyzes the relationship of these three project aspect in terms of relative change during the implementation process. For technology they should consider whether the project only needs well-understood and traditional skills and methods. A firm could be having risk management personnel with proven skills and methods that have been successful in previous projects. If the project needs new skills or an improvement of the skills and methods applied in previous projects, then possibly new risk identification techniques ought to be applied. For marketing, it should be considered whether the deliverable project will be used by a particular person known to the firm or a class of people. Prior knowledge to the client is important in determining the risk of rejection. For manufacturing, the requirements of providing the project deliverable to the end user should be assessed. If there are any changes in the manufacturing and/or delivery channel issues, there is a possible high risk of rejection or price cuts.
Adhitya et al., (2009) argues that the risk management methods outlined can be best assessed using HAZOP-based approach. The current supply chain, as outlined in the article, has become complex and quite risky, and there is need for management to rely on approaches that can mitigate these risks. Based on the literature provided by Adhitya et al., (2009), in the article, the approaches have demonstrated ad-hoc and risk, and the author argues that HAZOP-based approach is important for determining the trend in risks facing the supply chain. Based on the assessment of the supply chain procedures, which are becoming quite complex with time, the author postulates that the management needs to determine inherent and functional methods to mitigate and safeguard the organization against these risks. The author concludes by citing the factors that should be assessed to determine the risk strategies in the supply chain and the actions to be undertaken to mitigate them.
Sudirman and Hardjomuljadi (2012) conjectures that, for each of these factors, the assessment is binary: the change is either trivial or significant. This theoretical convergence asserts that most scholars and risk experts agree on the relationship of these three fundamental aspects of every project. If the change falls somewhere between trivial and significant, it should be treated as significant. All projects will require significant change to at least one of the three factors. Projects that have little or no change at all are not even worth implementing. Some projects require large changes in two or all the three aspects. Technical projects correlate these changes with risk. The more change inherent in a project, and the more different types of change, the higher the risk. If a project changes with change in a single factor, the level of risk imposed is quite manageable.
In the case of projects based on evolutionary forms, the products existing within the entity are improved, leveraged or upgraded fall in this category of risk. If a project has changes on two factors simultaneously, it has a higher relative risk and the management ought to reflect on this before proceeding to the investigation, planning and implementation level. Projects that fall in this category are those that develop new platforms intended as the foundation for future project work. If a project requires large shifts in all the three categories, the risks are greatest of all. Most of the projects in this category...