Risk Management and Their Responsibilities - Assignment Example

Risk Management Proposal Risk Management Proposal Before going into the details of making a proposal related to risk management, let us get a better understanding of what risk management proposal actually is. A risk management proposal is a specific plan developed for the purpose of risk management. Development of an appropriate risk management plan is one of the most important tasks for any company, business, or organization. Wrona (2010) asserts, “Companies that do perform a risk management process on a fairly typical multi-month project (no longer than 12 months) will identify and manage possibly five to ten easily recognized project risks”. Risk evaluation is also extremely important in order to minimize the occurrence of risks. The two widely used methods of risk evaluation include subjective and objective methods. Many people from different departments are involved in the process of risk management who oversee different phases of the project risk management. 1.1 People Involved in Risk Management and their Responsibilities If case of construction industry, people included in the process of risk management are project risk manager, risk management team, project risk custodians, risk profile owners, and team members of the project. Project risk manager provides the risk management strategy to the team in order to manage the risks associated with the project. The project management team collects necessary information required for the purpose of risk management. The risk profile owners allocate the responsibility of the risks to the concerned staff. The custodians of the risk oversee and consolidate the risks within a particular risk category. The project team members provide the necessary information regarding risks to the project profile owners and the risk management team. 1.2 Project Phases The phases of the risk management process include establishment of context for risk management, communication of risk management, risk identification, risk analysis, risk evaluation, risk treatment, and monitoring and reviewing of the risk. 2. Name of the Company The company for which we are going to propose a risk management plan is Emaar Construction Company. 2.1 The Company’s Profile Emaar is a Public Joint Stock Company whose motive is to provide the people with high standard life styles. Emaar is a Dubai based Construction Company and has been working successfully since 1997. Emaar Construction Company competes in various areas related to construction industry. These areas include building beautiful homes, master planned communities, various construction projects, and providing the customers with full range of high life style requirements. 2.2 Risks Associated with Emaar Construction Company As an employee of Emaar Construction Company, I would like to highlight some of risks related to the structural engineering department of the company. 2.2.1 Design Assumption Risk The risk occurs when the client asks for a change in the design of the building at a later stage by commenting that the design document was not shown to him due to which he did not know the fault in the design. Likelihood and Ranking of the Risk Likelihood of design assumption risk is high and the ranking score measures up to 60%. It is because, in our company, some cases have happened where the structures of the building were changed when the structure development was almost completed by the engineers. Priority of the Risk The priority level for design assumption risk is very high because satisfaction of the customer depends upon the basic structure of the building. In order to avoid such risks, we have proposed detailed meeting between the client and the architect at the initial stages of the project. 2.2.2 Fire Risk Fire safety aspects of buildings are of extreme importance for the health and safety of the employees and other persons in and around the buildings. The risks associated with fire include short circuit risk, explosion risk, and some other forms of risks. Ranking of the Risk Likelihood of design assumption risk is medium and the ranking score measures up to 40%. Priority of the Risk The priority level for fire risk is high. The proposal developed by our team includes such measures, which are very beneficial for the reduction of fire risk. These measures include eliminating the risk of fire spread over the internal linings of the buildings, ensuring the building stability if fire occurs, and ensuring the safety of the employees. Furness and Muckett (2007, p.172) found that the design, construction, layout and furnishing of buildings play a key role in any fire management strategy. 2.2.3 Uncertainty of the Environment Another risk is uncertainness of the environment. Slivka (2010) asserts, “To succeed in todays world, the first step taken by contractors is to incorporate environmental risk management into every facet of their business operations”. The risks involved in environmental conditions are unexpected earthquakes, unforeseen rain, and unpredicted climatic changes during the work at site. Ranking of the Risk Likelihood of design assumption risk is low and the ranking score measures up to 20%. Priority of the Risk The priority level for environment uncertainty risk is medium because our company makes use of weather forecast mechanisms, which predict the likeliness of rain and bad weather. In our proposal, some effective strategies are developed regarding reduction of environment uncertainty risk, which include constructing earthquake proof foundations and proper scheduling of tasks by considering the rain forecast. 3. Risk Management Process 3.1 Purpose of the Risk Proposal The basic purpose of our risk management proposal is to develop an effective plan in order to deal with various risks associated with the structural engineering department of Emaar. Sheldon (2010) asserts, “Crisis can strike at any time, which is why it is important for organizations to have risk management plans in place”. 3.2 Risk Management Plan The risk management plan includes following activities: Identification of the Risk First, the risks associated with the structural engineering department will be identified in order to reduce the negativity of those risks. Riesenburg (2009) asserts, “The key to the successful implementation of any commercial strategic plan, including the Dubai Strategic Plan 2015, is risk identification and risk management”. Analysis of the Risk After identification, the risks will be analyzed in order to know the likelihood and severity of the risks. Risk Prioritization In the third step, the risks will be ranked and prioritized. Risk Treatment After prioritization, the risks will be treated using the most suitable risk management activity. Those activities include mitigating the risk, accepting the risk, avoiding the risk, or transferring the risk. Risk Review In this step, the project manager will review the risk management plan in order to remove flaws from the strategy, if any. Risk Tracking The project manager will revisit the risk management activities and the plan will be updated according to the situation. 3.3 Risk Management Documents The documents, which will be developed as part of the process, include risks list, data items, and closing risks. Risks List The risks list will be maintained in the database or in a separate document. The risks having the highest priorities will be termed as top ten risks related to that project. Data Items The data items of the risks will be included in risk data items list. Those items include risk description, risk priority, risk exposure, risk impact, mitigation strategy, and duration of the strategy. Closing Risks The successfully managed risks will be included in this document. Summing it up, there are various kinds of risks present in the construction industry, which should be identified and managed effectively and efficiently using a suitable risk management plan. This proposal includes proper mechanisms that should be implemented in order to identify, assess, analyze, and manage all types of risks associated with the structural engineering department of Emaar Construction Company. References Furness, A. & Muckett, M., 2007. Introduction to Fire Safety Management. Burlington: Butterworth-Heinemann. Riesenburg, L 2009, Is Dubai ready for PPPs?, viewed 22 August 2010, . Sheldon, M 2010, Crisis Situations Require Careful Risk Management Planning, viewed 22 August 2010, . Slivka, J 2010, Development of Environmental Risk Profiles for Construction Firms, viewed 22 August 2010, . Wrona, V 2010, Your Risk Management Process: A Practical and Effective Approach, viewed 22 August 2010, . 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