Methods Employed in the Process of Assessing the Risk - Case Study Example

Risk assessment of JB-Firth building University name Student name Student id Course Date Table of Contents Introduction 3 Risk assessment process 3 Stages of risk assessment 5 Stage 1: Identifying hazards 5 Stage 2: Deciding who might be harmed and how the damage can take place. 5 Stage 3: Assessing risks and the action was taken 6 Stage 4: recording the findings 6 Stage 5: Reviewing the risks assessment 7 The method I would use 7 How I would structure the results 8 How risk assessment can help risk manager 8 References 10 Introduction This paper is trying to assess the risks facing the JB-Firth building. The risks assessment processes involving the various stages that can be used in the course of assessing the potential risks facing the project. The method employed in the process of assessing the risk has been identified, and the structuring of the results of the risks assessment explained. Risk assessment is the process of identifying risks that are likely to affect the project and the effects on the performance. The principal aim of the risks assessment is to ensure that the risks that are likely to affect the project can be identified in advance and the right measure to rectify the situation. The risks assessment manager needs to foresee the potential hazards that are affecting the project and getting the necessary action to avoid them or minimize their effects on the progress of the project (Flyvbjerg, et al. 2011, 601). Risks assessment can then assist the JB-Firth building in achieving the set objectives. Risk assessment process The risks assessment concerns the uncertainties that affect the project, threats that are likely to lead to the failure of the project among other hazards that can affect the performance of the project. The management of the uncertainties can able possible through ensuring that there is a proper analysis of the environment. I need first to analyze the external environment to make sure that I am aware of the factors that are affecting the performance of the project. Analyzing in making it possible to come up with the right strategies and policies that can assist in mitigating the risks. Risk manager needs to identify the risks that do exist and look for the best ways of avoiding such risks (Hubbard, 2009, 46). Risk management entails giving priority the risks that need to be addressed first considering their impact on the performance of an organization. The risks that have a higher probability of occurring are given the first attention in the process of managing the risks. Resources available determine the efficiency of managing the risks, as resources are needed in the course of managing risks. The resource allocations need to consider the probability of the risks occurring hence the risks that have a higher probability need to be allocated more resources. The failure to set aside some resources for managing the risks can lead to challenges in the process of managing the risks facing the project. This is because the lack of resources results in failure of proper management of resources. The risk identification ability is crucial in the administration of risks in projects where the failure of the risk management team to identify a high probability risks can lead to the failure of the project (Crockford, 1996, 18). For instance, a risk that has probability rate of 100% occurring can fail to be identified due to the lack the required ability to identify the risks. The failure of assessing the risks properly can lead to a decline in the performance of an organization due to decreased profitability, efficiency, employee productivity, brand value, reputation, quality, and knowledge of the employees. Risk assessment entails identifying and characterizing the risks that face a project and the evaluation of the vulnerability of the project. Determining the likelihood ad the impacts of the risk the moment it occurs forms part of the risk assessment process. The determination of the probability of the occurrence of the risks assists in taking the right actions that can help to eliminate the occurrence of the risks. Resource allocations are essential to the success of risk assessment (Flyvbjerg, et al. 2011, 603). Risk evaluation process can face challenges in the course of allocating resources hence understanding the risks facing the project is crucial before doing funds allocations. The understanding of the risks assessment can be critical in making the resources allocation easy and accurate. Risks assessment plays a significant role in minimizing costs incurred by organizations in the process of managing adverse impacts of the risks. The techniques used in the process assessing and managing the risks can be can be categorized into avoidance, reduction, sharing and retention. The avoidance techniques in the course of managing techniques ensure of the risks is avoided by eliminating the probabilities of the risk occurrence. Reduction method provides that the risks are reduced in the course of managing the effects of the risks (Antunes, et al. 2015, 218). The management of risks determines on the effects risks on the performance of the organizations. The plan of managing risks needs to propose an effective and efficient ways of managing the risks facing organizations. However, wasting time in the process of managing the risks that are likely to occur can result in the mismanagement resources for managing risks in organizations. Risks assessment can either be done using qualitative and quantitative techniques. Qualitative methods of assessing risks are subjective where the risks can only be qualitatively assessed. This method for evaluating risks can lack the necessary consistency. Quantitative methods involve using use of quantitative measures such as percentage. In the process of assessing and managing risks, it is very critical to ensure that there are proper communications concerning the risks to the stakeholders of the project. The communications assist in making the various stakeholders project aware of the potential hazards hence assisting in managing the occurrence of the risks (Dorfman, 2007, 38). Besides, the strategy formulation in the process of managing the risks can be done better by communicating the risks to the various stakeholders. Stages of risk assessment Stage 1: Identifying hazards The first phase in the risks assessment is identifying the risks that are likely to affect the project. The risks that are likely to affect the project are identified through thorough analysis of the external environment. The identification of the risks forms the foundation of risks assessment. All the potential risks are determined in this stage where they are categorized depending on their probability of occurring (Antunes, et al. 2015, 214). The risks that have a higher probability of taking place are given the priority in allocating resources for managing them. Stage 2: Deciding who might be harmed and how the damage can take place. The second step in the process of assessing the risk that I would take is the determining the areas that the risks are likely to affect. This will be very crucial in the course of taking the right actions that I would take in the process of management of the risks. I would determine how the risks would affect the various areas aiming at establishing the best ways of avoiding or reducing such risks from taking place (Crockford, 1996, 18). I would decide the areas that are likely to be harmed by the risks the moment it occurs by reviewing routines of work in various situations. Examining the habits of work can assist in identifying the areas that are likely to be affected by the risks the moment it takes place. Stage 3: Assessing risks and the action was taken I will at this stage consider how the risks are likely to take place to establish the various probabilities of the risks. This can involve determining whether the risks can cause harm to the project and the magnitude of the injury. Building the likelihood of the identified risks to take place is crucial in the process of determining the action to be taken. Assessing the risks that can be essential in taking the necessary measures that can assist in reducing or eliminating the risks (Hubbard, 2009, 46). I would then ensure that the necessary precautions are taken to prevent the occurrence of the risks. Also, after assessing the risks, I would give priority to the risks that have high effects on the performance of the project if they occur by allocating the necessary resources first. I would ensure that the risks are managed in a way that can eliminate or minimize their effects the moment they happen. This can involve communicating to the various stakeholders who can assist in taking the necessary precautions that would help in the prevention of the risks. Stage 4: recording the findings At this stage, I would need to record the results of the risks after the risk assessment process. The details of the risks such as the probability of the risks to take place aiming at ensuring that the records can be used in the course of managing the risks. The areas that are likely to be affected by the risk can also be part of the details provided to ensure the necessary precautions to be taken. The recording of the risks can entail the actions that need to be taken in the process of eliminating or reducing the risks. The recording of the risks provides prove of the risks assessment exercise that can be used in the future as the basis for reviewing the working practices (Antunes, et al. 2015, 215). The records concerning the risk assessment results can be important in communicating the risks concerning the project to the various stakeholders. The records can be used in the future in the process of making decisions hence it is important to ensure that the document is kept safely. The use of technology-based systems can be substantial in recording the findings of the risk assessment to ensure that the document is secure. Stage 5: Reviewing the risks assessment I would ensure that I keep reviewing the risk assessment findings to make sure that the right actions for mitigating the risks are taken. Reviewing can assist in ensuring that the safe working practices are assessed in the process of managing the risks (Dorfman, 2007, 35). Besides, the review of the risk assessment document would be necessary for the course of making decisions as the risks the potential risks would be considered in the decisions made hence working towards ensuring that the risks are adequately managed. The method I would use I would use probabilistic risk assessment method that entails a comprehensive and systematic evaluation of the risks associated with the project. The method is characterized by the magnitude of the possible adverse effects and the probability of the outcome occurring. The consequences of the risks are expressed using numerals while the likelihood of the risks occurring is shown using frequencies or probabilities (Crockford, 1996, 18). Using this method, the total risks are the loss expected. The probabilistic risks assessment method tries to answer particular questions that can include the following: first, it seeks to explain what might go wrong when studying technological entity or the initiating events resulting in adverse results. Second, it also entails answering the question that seeks to know the level of the undesirable results after the risks have occurred. Third, the probabilistic method attempts to explain what can happen in the event of undesirable impacts while determining the frequencies or probability of the adverse effects happening. The use of the probabilistic method needs some analysis tools such as common-cause-failure and human reliability analysis (Cortada, 2003, 512). These analysis tools try to associate the actions of the members of the team with the mistakes that can results in the occurrence of the risks hence being aware of the potential risks can assist in the process of mitigating the risks. How I would structure the results I would break down the risk aiming at meeting the target for quality, schedule, and the costs. The structure of the results would involve identifying the risks that might hinder the success of my project. The structuring of the results of the risks assessment can be valuable in assisting in making decisions about the management of the risks. The structure of the risk assessment would involve focusing on making predictions concerning the likelihood and the effects of the risks (Hubbard, 2009, 46). The structure would be identifying the probability of the risks occurring and the magnitude of the risks aiming at managing the risks in a right way. Breaking down the risks would be great benefits in the process of grasping the needs of the project that need scrutiny. Besides, I will break down the risks assessment results to understand better the recurring risks in the project. I would put the required concentrations in the areas that seem to be highly vulnerable to the risks. With the proper breakdown of the results of the risks assessment, I will be able to define the project scope. Therefore, with the appropriate breakdown of the risk, I will be in a position to manage the risks affecting the project better (Antunes, et al. 2015, 211). The structuring will assist in coming up with a real risk response plan that will help in managing the risks effectively. How risk assessment can help risk manager The risks manager can derive many benefits from the risk assessment. First, the risk manager can be in a position to identify the probability of the risk occurring hence getting the necessary actions that can mitigate the risks. The identification of the risks can involve determining the magnitude and the areas that are likely to be affected the risks the moment it occurs. Second, the risks manager can be in a better position during the allocation of resources for managing the risks. This is because with the risk assessment, the risks that need priority can be indemnified hence resources can be first allocated to the priority risks (Flyvbjerg, et al. 2011, 602). The risks are given the priority depend on the probability of happening. Lastly, the risks manager can be able to reduce or eliminate the risks entail using the risk assessment as the frequency and the magnitude of the risks can be identified through the risk assessment. The risk manager can have the necessary actions in place that are aimed at managing the potential risks by eliminating or reducing their effects on the performance of the project. References Antunes, Ricardo; Gonzalez, Vicente (3 March 2015). "A Production Model for Construction: A Theoretical Framework". Buildings 5 (1): 209–228. Crockford, Neil (1996). An Introduction to Risk Management (2 ed.). Cambridge, UK: Woodhead-Faulkner. p. 18. Cortada, James W. (2003-12-04). The Digital Hand: How Computers Changed the Work of American Manufacturing, Transportation, and Retail Industries. USA: Oxford University Press. p. 512. Dorfman, Mark S. (2007). Introduction to Risk Management and Insurance (9 ed.). Englewood Cliffs, N.J: Prentice Hall. P. 32-40. Flyvbjerg, Bent and Budzier, Alexander (2011). "Why Your IT Project May Be Riskier Than You Think". Harvard Business Review 89 (9): 601–603. Hubbard, Douglas (2009). The Failure of Risk Management: Why It's Broken and How to Fix It. John Wiley & Sons. p. 46. Read More