Risk Assessment Process Evaluation - Dissertation Example

 Risk Assessment Process Evaluation Introduction This report tries to evaluate extensively the risk management planning process of Chesapeake Energy that we carried out as a group to identify and assess risks that affected and could affect Chesapeake Energy. It comprises of detailed strengths and weaknesses of the risk management planning process (John, Chris, Paul, and Karl, 2004, 13-14). It also includes how the group overcame difficulties while coming up with the risk management planning process and finally a deep evaluation of the risk management planning process of Chesapeake Energy. Risk management planning process is a process of coming up with a guideline or framework whose main objective is to foresee risk, how the risks might impact the organization and steps that will be taken to hedge against potential or future risks (Kosmidou, Doumpos, and Zopounidis, 2008, 15). This process is very important because the risk is evident in all projects, thus coming up with a risk management plan is key so as to protect your organization against this potential risks. Strengths and Weaknesses of the Risk Management Planning Process This process has a number of strengths and weaknesses, and they are as follows: Strengths The risk management planning process helps one plan for potential risk that might have negative impacts on your organization; thus, coming up with proactive strategies to prevent them from affecting your organization or have very minimal effect if do affect your organization (Oxford Brookes University, 2012, 15). During the process of coming up with a good risk management plan one always thinks of ways to create better opportunities for their organization to strive so as to minimize risk, thus improving their organizations indirectly as they come up with ways of prevent potential risk (United States Congress House Committee on science, space and technology, 1991, 39). Weaknesses One major weakness about the risk management planning process is that people only do it once at the beginning and assume that once they have covered the process their job is done and that any occurrence of future risk was unforeseeable (Harry, and William, 2009, 5). Thus, they relax on their job after they complete the first risk management process not knowing that it is continuous. If the risk management process is not done well it may fail to work as it may misguide the user on risks that are not relevant to his or her organization, thus this process should be done with a lot of care and precision and all steps should be followed to the letter. Another weakness is that the risk management process cannot capture all risks that might affect an organization and trying to achieve such a goal is a waste of time because it is impossible. Challenges faced while coming up with the Risk Management Planning Process While coming up with the risk management process we encountered various challenges or rather difficulties that affected us. We had to come up with various strategies to overcome them. The following are the challenges we encountered and how we strategized to overcome them. The worst challenge we had was time management. Time is an essential attribute to any project, and we had to learn how to manage it effectively and efficiently. We did this by dividing work between the group members and further than that we allocated each n everyone a specific deadline to achieve a specific goal. Different ideologies within the group also proved to be a major problem as it led to poor communication between the group members which further led to confusion and misconception of the work that was to be done (Van and Vermeire, 2007, 6). This led to problems in the identification and assessment of risks. We solved this by deciding to discuss all issues among all members tackling one issue at a time and ensuring ever one was at a par and was at agreement on all that was discussed and decided. Insufficient knowledge also proved problematic as group members had insufficient knowledge on the issues being tackled and extensive research needed to be done to come up with relevant content and accurate information. The extensive research also assisted us in coming up with the proper guidelines of identifying which risks were to be reported to the management team. The greatest challenge I had was that COSO Enterprise Risk Management framework management was very confusing as it mixed up the entire process by combining the processes of risk management, risk treatment and monitor; and instead of dividing them into different entities. Evaluation of the Risk Management Process In this section, we focused on evaluating the risk management planning process. We used the Gibbs Reflective Cycle (1998) to come up with a suitable and effective evaluation. Below is the evaluation: Description of the process The process entailed identification and assessment of risks after which we had to come up with a detailed and effective risk management process. First we had to read and understand the task at hand. Since we had insufficient knowledge on what were to do we had to carry out research (Harry and William, 2009, 45). It is significant to strategize on how to do this, and we divided the work among group members after which we gave each member time limits so that we could minimize on time and the same time is effective. Even though the work was divided, we all took part in compiling and revising the work together so that all group members views were addressed and that the work was good and that it represented a team effort (Veronica, Hazel and John, 2004, 93). Feelings During the coming up with the risk management planning process there was a mood of anxiety low morale, at the early stages of handling the task at hand, among group members because no one was 100% sure of what they were doing, but once we got used to it we all adapted very fast and there was a mood of confidence and high morale towards tackling the task at hand (Committee of Sponsoring Organizations of the Tread way Commission, 2004, 35). At the end of the task the group seized to exist, and a team was born, as everyone worked together hand in hand and coordination was impressive. Evaluation Generally there were a couple of things that encouraged us in undertaking the tasks at hand. Issues such as morale and dedication of the group members really steered the group towards achieving it goals which it did well (Steinberg, 2004, 68). The negative attributes that was experienced during the process was such as we lacked adequate information about the task we were undertaking and extensive research had to be conducted so as to come up with proper and adequate content. As a result this led to issues of time management, and we had problems on attaining the deadline stipulated. Analysis The process was quite tedious; it involved long hours of research and evaluation of risks so as to decide which risks took precedents to the other. It involved coming up with effective strategies so as to meet deadlines and sometimes revising those strategies so as to promote effectiveness (Armstrong, 2004, 67-82). The process was also very educative as it enabled as to know and have a clear understanding on the various methods of coming up with an effective Enterprise Risk Management framework in organizations; for example, the COSO framework. Conclusion At the end of it all the experience of doing the project was worthwhile, we as group members learnt a lot, and we were able to achieve our goal as a group. In addition to what we had achieved we could have researched on other frameworks such as COSO and compared and contrast the differences between the two and which one is best. Action Plan If the situation of coming up with an effective risk management process came up again I would focus on emphasizing better teamwork. This is because even though we were able to accomplish our work on time certain team values were missing especially at the early stages of coming up with the process (Armstrong, 2004, 67-82). Team values such as synergy was hardly present until the last stages of winding up the task. Synergy is very important in group work as everyone in the group needs to work together as one. I would also emphasize on improving on our communication and listening skills because communication is key to accomplishment of most tasks especially when you are in a group. Bibliography Armstrong, M. et al., 2004. Incorporating technical uncertainty in real option valuation of oil Projects. Journal of Petroleum Science and Eng., v.44, n.1-2, p. 67-82. Committee of Sponsoring Organizations of the Tread way Commission, 2004. Enterprise Risk Management — Integrated Framework. Van Leeuwen and T.G. Vermeire, 2007. Risk Assessment of Chemicals: An Introduction Second Edition. Pg 6. Harry, Cendrowski, and William, C., Mair, 2009. Enterprise Risk Management and COSO Framework: “A Guide for Directors.” John Bartlett, Chris Chapman, Paul Close, Karl Davey, 2004. Project Risk Analysis and Management Guide. Journal on threats of Risk management processes. Pgs 13 and 14. K. Kosmidou, M. Doumpos, C. Zopounidis, 2008. Country Risk Evaluation: Methods and Applications. Journal on Limitations of Risk Assessment Process. Pg 15. Oxford Brookes University. About Gibbs Reflective Cycle. Accessed at http://www.brookes.ac.uk/services/upgrade/a-z/reflective_gibbs.html Steinberg, M., R., Everson, M., E., Martens, F., J., and Nottingham, E., L. 2004. Enterprise Risk Management — Integrated Framework. Accessed at http://www.coso.org/documents/coso_erm_executivesummary.pdf United States Congress House Committee on science, space and technology, 1991. Risk assessment: strengths and limitations of utilization for policy decisions. Pgs, 34, 38 39. Veronica Swallow, Hazel Chalmers and John miller, 2004. Partnership in Work Based Learning. Journal on Gibbs Reflective Cycle. Pg 93. Read More