Analysis of Project Management Risk - Research Paper Example

 Analysis of Project Management Risk The domain of risk management centers on the culture, processes and the structures which are basically directed towards attainment of a platform of managing effectively the risks as well as the opportunities and threats associated with objectives of any project (Project Risk Management Guidance for WSDOT Projects, xii). The notion of project risk management has been developed on the assumption that the knowledge which is ushered internally relating to the project related planning issues and the control issues are the primal drivers in the forecasting and managing the risks efficiently. In today’s world of exorbitant business competitive milieu, the business analyst through empirical test reveal that the external business issues are also found to impart prominent impact on the future of the organizations and the company or organization has to strengthen the internal as well as the external mechanics for competent operation (Barkley,1-2). The project risk management generally contributes optimally to the success of the projects, recognizes the uncertainty and helps in the provision of forecasts dealing with the possible outcomes, production of better business outcomes through the process of more informed decision making, inflicts positive sway on innovative dynamics, leads to the minimization of resource wastage and helps the senior management in understanding the whereabouts of the organization (Project Risk Management Guidance for WSDOT Projects viii). Focus of the paper One of the obnoxious events in the history of space shuttle disaster is that of the aerial destruction of NASA’s Space Shuttle, Challenger which took place on January 28 in the year of 1986. In the initial diagnosis phase it was encountered that the disaster was primarily due to the technical fault of a rubber like materials in the space shuttle known as the O-rings. But further investigations disclosed the fact there was a larger story associated with the technical disaster. Investigations found that economic crisis within the system led to the negligence of the safety measures related with the O-rings and along with the consultation with the top managers the flight decision was taken up further and led to the disaster (Vaughan, x-xii). The paper will focus on the three different risks associated with the project management along with the process of minimizing and managing them with the back drop of the disaster of the space shuttle Challenger. Acceptable Risk Identification Among the various classifications of risks one of the distinct classifications of risks which are concerned with the paper is that it is the probability of injury, death and disaster under specific circumstances. In the determination of the acceptability of a particular type of risk generally perceived risks play a predominant part. Majorly a risk is assumed to be an acceptable risk is it satisfies some conditions. The conditions can be said to be acceptable when they fall under a range of randomly defined probability or falls below some tolerable levels. The other criterion is that the cost of risk reduction must surpass the saved costs, management related to a projected aggregately deciding of its acceptance, and lastly political acceptability is also considered (Hunter & Fewtrell, 207-208). In the domain of acceptable risks the attachment of the valuation of the risks as medium, high or very high depends upon the proper judgment of the higher managers associated with the project. The determination is highly critical and it is the responsibility of the managers in order to properly balance the Program Criticality and the risk to safety as well as the security of the personnel which must be considered in the determination of the acceptable risk (Security risk management, 8-9). NASA was known for its reliable and flawless performance before the occurrence of the Challenger disaster. The problem of the Space shuttle’s Solid Rocket Booster started with the identification of the faulty design of its joint and the situation enhanced as both NASA and the contractor management failed in the recognition of the problem. The management of NASA was a failure in fixing the problem. As a result, eventually they fixed the problem as an acceptable flight risk. Morton Thiokol Inc, the chief contractor failed to accept the implications of the tests in the early phase of the program and also ignored the unanticipated flaw which resulted in the disaster (Vaughan, 77). Analysis For the proper understanding of the reason which inflicted NASA in the allowance of the occurrence of the event in depth scrutiny is required. Firstly, the political influence can be said to be one of the aspects in the occurrence of the disaster. In the beginning of the 1970s, agency of NASA faced tremendous pressure for ensuring the fact that whether the project was a cost effective one or not by moving the agency from the standpoint of Type I reliability to the trajectory of Type II reliability. Ronald Regan’s administration in the in the 1980s pressurized the agency of NASA to move towards the pursuance of Type II reliability. In the face of tighter budgetary paradigm, the administration was ready to back the decision of the Government so that NASA enters into a situation of cost-effective program execution. The agency had the power of shifting the structural adjustments into realm of balancing of both the forms of reliability through generated political incentives. During 1960s, NASA adapted a strong serial process in the endeavor to limit the risk for which the Type I failure would occur. The agency faced a greater pressure for the establishment of the Type II reliability. Thus a number of structural changes took place within the agency. Parallel to this, the formation of large parallel linkages were formed which induced the agency in avoiding several unnecessary delays in the launching of the mission of the shuttle and augmented the launch of an unsafe mission and hence the catastrophic disaster took place with the destruction of Challenger in 1986 (Heimann, 163). Apart from the highly influencing political pressure it was found that the tough competition enthralled by the European Space Agency can be regarded as a negative externality for NASA in negligence of the close scrutiny of the space shuttle launch (The Challenger Space Shuttle disaster and the Solid-Fuel Rocket Booster (SRB) project). Mitigation Prior to the launch of the space shuttle launch there were various warnings related to the Solid-Fuel Rocket Booster derived from the experiences of previous space missions. Some of the proponents argued for the obstruction of the cold weather were a hindrance for the launch of the space shuttle as because Florida had past histories of cold weather phases. Mitigations were least from the part of the agency. Among various other warning signals was that of November 1981, where after the second mission of the shuttle the O-rings seemed to be eroded by the hot gases. In January, 1985, the launch took place in a cold weather and the final launch was also in January, the next year. As mitigation procedures, before the launch, the engineers at the Thiokol finding traces of soot and grease started to examine the resiliency of the O-rings at low temperatures and designed an ordered steel billet which was used for the redesigning of the case field joint, but the steel billets were not present at the time (The Challenger Space Shuttle disaster and the Solid-Fuel Rocket Booster (SRB) project). Again there were two memoranda from the Marshall Engineers who stated that the design of the SRB joint was unacceptable yet no steps were taken (Vaughan, 79). Control and documentation The launch of the Challenger Space shuttle was violated by three industry standards although NASA certified the SRB as flight worthy. The acceptable risk process was the basis of the daily decision making procedures to formalized and final decision making for the final launch was known as the Flight Readiness Review. The process was put forwarded in the Space Shuttle Assessment Report with its issue prior to the launch in 1981. The statements of the documents stated the parameters of the hazard assessment for the first shuttle flight as well as all the subsequent missions. The hazards were identified and then were subjected to formal reduction precedence sequence (Vaughan, 81). Thus if the agency of NASA would have been much careful with the optimal maintenance of the technical standards and not succumbing to the political pressures then there would have been attainment of the perfect hedging scenario and prevention of this tremendous loss. Residual Risk Identification In any given project, over the course of a project’s respective life cycle, there will arise in multiple times situations where the project management team and the leaders associated with the project will realize themselves in a position where they relate the situations with the detrimental or adverse situations and outcomes. Thus the probability of the pessimistic or the negative outcome attached is regarded as the project risk and the project management team becomes responsible for the formulating techniques required for the minimization of these risks. The techniques applied bring outcomes in favor of bringing positive results and sometimes the risk remain in fact in the purview. This remaining prevalent risk is generally known as the residual risk. Thus the residual risk mainly applied to the element of the risk which occurs after the execution of the assessment procedures and the implementation of the responses (Stein, 229). From the very beginning of the project of the Space shuttle Program, it conjectured that the risks subjected could not be eliminated from its roots. The notion was that the risks could be calculated, predicted and regulated but it was that a certain amount of risks that is the residual risk were found to be prevalent (Vaughan, 80). Analysis The risk attached with the shuttle flight was basically acknowledged in the initial phase of the planning stage when NASA was in a dilemma of whether to keep the provision of astronaut crew on their first orbital mission. But sending human crew without foolproof technology and expertise magnified the residual risks associated with the launch. The risk assessment paradigm was basically a group outcome of analysis done by the engineers and the managers (Vaughan, 80). In this particular case the administrative failure and failure in the proper coordination of among the managers and the engineers led to the creation of the chaos and hence the disaster. The fact was that all types of mechanical problems attached with the field joint have been identified by the Thiokol engineers. The problems were identified as potential risks but there were rigorous difficulties in the communication with the managers who were responsible for the launch. The decision of launch without a perfect intersection between the managers and the engineers led to the poor evaluation of the risks. The engineers were basically moved by the basis of managing risks largely through the technical experience as well as the facts. While on the other hand, the managers were basically inclined on taking risks due to the fact that the managers mainly diverted their focus from technical related issues and the fact that their job demanded the delivery of hardcore business proceeds without delivery delays. There were disputes relating to the use of the O-rings at untested low temperatures. The managers were optimistic in carrying on the tests at low temperatures while on the other hand the engineers enthralled pessimistic attitudes and regarded the tests as unrealistic. Both at the NASA and Thiokol there were no measures adapted for the implementation of the quantifying the risks. One of the loopholes which can be mentioned here is that the organizations deviated from the expenses attached with the data collection and statistical model generation. Further in NASA there were no engineers trained in statistical sciences (The Challenger Space Shuttle disaster and the Solid-Fuel Rocket Booster (SRB) project). Mitigation In the planning process of the SBR and the success of the first mission was boosted up by the adaptation of a conservative approach, subjecting of the vehicle to the most environment possible as well as flying the space shuttle with man through the policy of corrective action by the crew. The sole motive behind it was directed towards the reduction of the mission vulnerability with the addition of the human intelligence for coping up with the uncertainties of the machineries .The work was done in a synchronized manner and there was creation of work group which were headed by the Project managers who were responsible for the maintenance of the primal shuttle elements like that of the Main Engine, External Tank, Orbiter and the SRB’s. The project managers worked very closely as well as the engineers at their respective space centers with the prime contractor’s managers and the engineers assigned to the particular element (Vaughan, 80-81). Control and documentation The work group culture and the environment in which the engineers and managers of NASA worked were in a negotiation of risks and were able to take decisions under uncertainty. In the native view of the NASA’s work culture there was a presence of residual risks present in all the flights due to the unique structure and design of the shuttle. There were a large number of uncertainties attached with large complex technical system without prior experience. The work group calculated the risks. The concept of the acceptable risk was the basis of a formal status conferred upon by a component with the following of a prescribed formal status following a prescribed procedure on the basis of documented engineering and technical rationale the risk estimation. The assessment of the risks was done on the usage of scientific and engineering judgment methods (Vijay 4). The need for statistical analyses would have a more strong process for the minimization of the risks. The training and proper application of the statistical tools and optimized data handling would have been fruitful in the efficient management of the residual risks. Escalated Risks Identification The escalated risks are generally risks which occur in higher scales in a project than the levels previously forecasted or estimated (Space Shuttle Challenger Case). The day-to-day negotiations were mainly carried on by the Flight Readiness Review (FRR) where each mission was preceding by 15 months of mission specific activity. The FRR was basically the formal review in an intricate process of the launch of preparation with the involvement in the decision making as well as the introducing thousands of engineering hours. This was done for the proper functioning and safe launch of the shuttle. There were mainly four levels where the first level was concerned with the policy, budgetary and operational level technical matters. The second level was responsible for the baseline and requirement with the emphasis on the first level. The third level was associated with the management of the Orbiter, Solid Rocket Booster, External Tank and Space Shuttle man engine which was responsible for the development, testing as well as the delivery of the hardware at the launch site. The fourth level was responsible for the design and the production of hardware. From the period of 1978 through 1984 there were there was a reluctance in the working environment. Suddenly, there was a rush among the engineers concerning the SRB joint problems and escalated risks were determined special task forces were applied for the mitigation of the O-ring problem (Vaughan, 191). Analysis One of the main reasons for the development of the escalated risk again can be looked down upon to the loopholes of the administrative structure or the weakening of the internal management system. There was generation of disagreement in the organisational arrangement of the government/contractor relationship, the NASA in house subunits as well as the mandates of the FRR. In the process of the risk assessment, there was emergence of disputes among the Marshall and Thiokol members. There was cooperation built for the execution of the shared goals but the differences in the responsibilities of the roles created the difference. Business was the crux of their positions. Money mattered to them the utmost. There was also disagreement in the natural product of the testing arrangements. The Marshall possessed their own testing facilities and the laboratories where the engineers worked on the same arena as did the Thiokol members. However, the tests as well as the testing equipments were not identical to that of the Thiokol. On the other hand the Marshall engineers considered them as superior to that of the Thiokol workers. The uncertain technology in accordance with different tests and testing facilities there created a general conflict between both the work groups. It was encountered that sometimes it was not possible to settle the disagreement among the contractors and the Marshall as they believed on their own method and analysis. The management of Thiokol also showed pessimistic attitude towards the Marshall management. It can be found from the statement of the Thiokol engineer Roger Boisjoly that: “Thiokol management hated [Marshalls S& E engineers] Ben Powers and Leon Ray. Thought they were muckrackers. Everything Leon found was not in Thiokol’s interest, bad news. Leon would find it, tell his management, his management would call Thiokol, and there would be trouble” (Vaughan 86-87) Mitigation It was a fact that there constant disputes among the two management bodies regarding the whole mechanism of the space shuttle from its initial phase to its launch phase. However they arrived at a common conclusion that the O-rings were generally an acceptable risk. On the basis of several tests and static motor firings they came to the agreement that the primary would be sealed at initial compression and in case if it failed, then the secondary will fill the joint, performing its redundant function. The execution of the tests and the corrective actions led to the resolution of the work group concerns about the O-rings. The program was initiated and it was regarded as an acceptable risk. The 0 problem SRB joints in the first mission led to the official construction of the risks and provided the technical rationale for the safe launch of the flight (Vaughan III). Control and documentation In the detection of the escalated risks in the shuttle launch, special task forces were implemented for the purpose of solving the O-ring problems. Memos were issued warning for the upcoming catastrophe. In August 19, in a briefing to the senior NASA administrators at NASA headquarters, the Thiokol Inc, declared that the gave a full presentation about the problem related to the O-ring along with the emphasis of the graveness of the concern. The work group repeatedly developed the decision making sequences for developing norms, values and procedures which supported the central belief about the redundancy which allowed the members in the re interpretation of the deviant information. There were mainly five steps taken in the sequence. The steps included the signals of potential danger, official act of escalated risk, review of the evidences, official act of indicating the normalization of deviance i.e. accepting the risk and lastly the shuttle launch. Again on January 27, 1986, the five step decision sequence was again enacted. Apart from that the predicted cold weather also acted as a hindrance creating uncertainty about the relationship between the O-ring resiliency and redundancy. Among the official task of the acknowledgement of the escalated risk, the arrangement of teleconference was crucial (Howe). Conclusion The paper dealt with various risks associated with project management with special emphasis to the devastating incident of the NASA phenomenal space shuttle launch of the Challenger which took away lives of seven astronauts and wasted billions of dollars and years of strenuous exercise. The technique of minimizing the risk is utmost important in the successful functioning of any project. Technical faults were highlighted as the main cause behind the destruction of Challengers but close scrutiny revealed that the loopholes in efficient management system were the prime concern related. It became a big learning lesson for reputed institutions like NASA and they restructured their risk management strategies so that they will be devoid of any mere ambiguities. References Barkley, Bruce, Project Risk Management, McGraw-Hill Professional, 2004 Heimann, Clarence Fredrick, Acceptable Risks: Politics, Policy, and Risky Technologies, University of Michigan Press, 1997 Howe, Sandra, ‘Risky Decisions, Sociologist says NASA's culture led to Challenger disaster’, July 13, 2012 from: http://www.bc.edu/bc_org/rvp/pubaf/chronicle/v4/F01/VAUGHAN/VAUGHAN.html Hunter, Paul, R. & Fewtrell, Lorna, ‘Acceptable risk’, World Health Organization, 2001, July 13, 2012 from: http://www.who.int/water_sanitation_health/dwq/iwachap10.pdf Project Risk Management Guidance for WSDOT Projects, 2010, July 13, 2012 from: http://www.wsdot.wa.gov/publications/fulltext/cevp/ProjectRiskManagement.pdf Security risk management, 8-9, NGO Approach, Inter Action Security Unit, July 13, 2012 from: http://www.eisf.eu/resources/library/SRM.pdf Stein, R. Timothy, The Computer System Risk Management and Validation Life Cycle, Paton Professional, 2006 Space Shuttle Challenger Case, From The Knowing Organization, Chapter 5, n.d., July 13, 2012 from: http://choo.fis.utoronto.ca/mgt/DM.case.html The Challenger Space Shuttle disaster and the Solid-Fuel Rocket Booster (SRB) project, July 13, 2012 from: http://www.kosmosbusiness.com/UserFiles/File/Books/CaseStudy1.pdf Vaughan, Diane, The Challenger Launch Decision: Risky Technology, Culture, and Deviance at Nasa, University of Chicago Press, 1997 Vijay, Samudra, ‘The Challenger Launch Decision’, Chicago and London, University of Chicago Press, 1996, July 13, 2012 from: http://stuff.mit.edu/afs/athena/course/other/esd.83/OldFiles/www/notebook/The%20Challenger%20Launch%20Decision_1.pdf Read More