Explain The General : Principles Of Risk Management/assessment ,to Identify Various Sources Of Risk - Essay Example

NAME : XXXXXXXXXXXXXXXXXX INSTITUTION : XXXXXXXXXXXXXXXXXXXX COURSE : XXXXXXXXXXXXX TITTLE : XXXXXXXXXXXX @ 2009 Risk management The management of risk has been an issue of significance in the recent past. It has been a common practice that projects are being shared by multiple parties especially in the construction industry whereby the delivery of the outcome of the project is associated with a situation of actor network that is extremely complex. There is a scarcity of the research findings of the approach of adoption of risk management in a project. The recent years have been associated with rigorous research as well as development in the field of risk management in construction projects. The most important procedures as well as areas of capability with regard to project management identified a relationship between the support of the management for the processes of the management of risks and the success of the report project whose statistics were significant. There has however been an identification of existing shortcomings together with opportunities for improvements in as far as this field are concerned. Majority of the identified shortcomings have a positive correlation to the escalating complexity associated with the projects (Pitagorsky 2007). The construction projects are usually associated with extreme risks together with the highly inflexible management approaches in as far as the risks are concerned. The means of management of these risks have been informal and the application of the methods of risk management that have been recently developed is modest in the sites of construction. Various categories of risks are in existence. They include for example the risks that are based on uncertainty arising due to the occurrence of events that are unexpected. In construction sites, this is the type of risk which has in the past been responsible for the attraction of the greatest recognition (Hester & Harrison 1998). They are usually unknown and their quantification is a complex issue, their impacts are usually negative and their control or influence is not a possibility. This category of risks ranges from physical damage or the damages done on the buildings as a result of fire as well as floods, financial loss, unexpected insurance loss, market share or an important supplier. Due to their specific nature of a disaster as well as unpredictable, it is important for the owner of the business to have a prior planning and the determination of the possible mechanisms responsible for minimizing the disruption of the business. There are various techniques that are applicable in the identification of risk in a construction project. They include the use of a risk register as well as a checklist, conducting interviews with the experts as well as the participants of the project and brainstorming with the help of the Risk Team. Techniques that are indispensable as far as the issue is concerned involves the achievement of an exhaustive understanding of the processes of the project together with the environment under which its construction and operation is to take place. This has th requirement of the adoption of the three processes. The starting point of the entire process is the provision of the checklist. Conducting interviews serves the purpose of application of the corporate experience of the past. Brainstorming serves the purpose of identification of new forms of risks (Hester & Harrison 1998). Subcontracting has been on the increase due to the issue of the focus of the majority of the companies on the business. This is consequently responsible for the creation of the complexity associated with the networks of the project and a higher numbers of the participants in the projects. The resulting complexity is closely connected to the viewpoint in the field of the management risk in construction projects that has scarcely been studied. There is a moderate research finding that has been conducted with regard to the action of the networks in the prevention as well as the mitigation of the risks. The distinctive characteristic of the construction projects is a complexity with high levels of uncertainty that are anticipated from diverse sources. The projects of construction congregate a lot of stakeholders from diverse places. This is responsible for the complication of the entire network. However, the projects are a source of ideal environment for research in the networks as well as risk management. In addition to this, there is a tendency of the frequent application of the construction projects in the field of management research and diverse tools as well as techniques have been implemented for the purpose of the projects. There exists a gap in the midst of the techniques of risk management to the practical application of the techniques in construction. There is therefore a direct relationship between risk management and the completion of the project in a successful manner. th literature of project management has a detailed description of the processes of risk management that are widely acceptable (Pitagorsky 2007). The basic construction of this is based on four phases that are iterative. they include; the identification of the risk, the estimation of the risk, the planning as well as the execution of response to risk and the management of the processes of risk also an important consideration. This may involve the handling of the project with the application of fewer resources or embracing the opportunities associated with the unexpected opportunity windows. Risks and business are two indispensable entities and there is a direct link between the existence of the risk and the occurrence of opportunities. There can never be opportunities with the absence of the risks that are related to the opportunities. The contributions of the risks are therefore to elevate the value of the project and risks that are significantly higher are associated with a higher level of opportunities. The seldom independence of opportunities together with the threats can be manipulated in a manner that the two issues are addressed simultaneously. The application of uncertainty in the place of risks is meant to imply the possibility of the positive as well as the negative impacts (Haimes 2004). The processes of risk management in the construction projects should target the successful completion of the project as well as increasing the potential anticipation of the goals as well as the objectives of the project. This has the implication of the fact that the management of the risk of the project is converted in to the management of the uncertainty of the project. The management of risk is seldom under the limitation of few processes. It is composed of more for the purpose of achieving a complete perspective of the highlighted processes of risk management. Allocation of risks is an important consideration in as far as this area is concerned because the examination of he available approaches of mitigation as well as handling in the networks of the project as well as the determination of the most appropriate actors bearing the responsibilities of the management of risks. Prior to making of the decisions related to the allocation of risks, the attitudes of the actors in the project have to be determined in as far as the risk is concerned. Before the commencement of the project, the strategy of every worker together with the ability of the management and also bearing of the risk has to be determined before the assignment of the risks to them. At the level of the company, the management of the project risk has to be responsible of all the mentioned aspects. Conclusion The management of risk is usually a wide field with a composite of diverse specialization. The tools as well as the methods that are applied for the purpose of the measurement as well as the treatment of the exposure to risk are diverse as a result of specialization. However, the principles of the management of risk are all similar. They involve some practices that are at the exposure of the business for the purpose of the management of risk exposure, the achievement of the goals together with the objectives. It also acts as a guide in the achievement of the expectations as well as the concerns of the interest of the public, the labor relations, the safety of the humans, and the environment together with laws responsible for the governing of the practices of the business. The principles related to the management of risk falls in the category of the assessment of the risk and the control of the risk. The assessment of the risk is associated with the identification, quantification as well as prioritizing of risk exposure. The control of the risk on the hand addresses the management of risk exposure on a basis that is continuous. Bibliography Pitagorsky, G. 2007, Approach to Project Management, New York, www.iil.com/publishing. Hester, R. E. & Harrison, R. M., 1998, Risk assessment and risk management, NJ, Royal Society of Chemistry. Haimes, Y. Y. 2004, Risk modeling, assessment, and management NY, Wiley-IEEE. Read More