Strategic Context of Project Management - Essay Example

Author: Professor: Course: Due Date: Table of Contents Table of Contents 2 1.1 Process of risk management 4 1.1.2 Quantitative risk analysis 5 1.1.3 Risk response planning 5 1.1.4 Risk monitoring and controlling 6 2.0 Total Quality Management (TQM) 6 2.1 TQM implementation procedures 6 2.2 TQM obstacles 7 Bibliography 8 1.0 Risk Management In every decision made in life there is an element of risk associated with it. Therefore it’s very important that every risk is analyzed and solution for it determined at the initial stages of the project. Risk managed can be described as the process that is both a science and an art that is aimed at identify the risk, analyzing it, and providing timely response throughout the project cycle so as to ensure that the project is able to realize its objectives. However, the current trend in risk management is worrying. Many of the strategic planners in various organizations have not taken into consideration the importance of taking into account the effect of risk to the project. In situations where matters pertaining to risk have been taken into account, evidence has shown the project success is more likely and thus causing the question as to why even in the 21st century several managers have not been able to appreciate the role of risk management (Project Management Institute 2001). Risks can be grouped into two major categories namely: negative and positive risks. Negative risks involve those risks that are likely to lead to loss or any sort of injury to the project. Therefore understanding what the negative risks are, is very critical in finding out ways that there effects can be minimized so as to realize the project objectives. On the other hand, positive risks comprise those risks that are likely to lead to good results from the project. In some cases they are referred as opportunities. Realization of these risks is especially important in designing ways in which they can be exploited. Therefore, in general terms risk can be defined as uncertainties that are likely to cause negative or positive impacts to the business. The work of risk management therefore is to strategize on how negative risks can be minimized and at the same time ensure the opportunities presented are fully utilized. 1.1 Process of risk management Risk management is a process that entails several stages. It’s a process because it addresses issues such as risk management planning, identification of risk, qualitative analysis of risks, quantitative analysis of risks, risk response programme and monitoring and controlling risk. In doing analysis of this processes, this report will make use of the Alpha Project case. First and foremost planning of risk management starts with setting out a plan that will show a step by step approach to managing of risk and all the activities that will have to be committed. At the planning stage, the project team was expected to take a critical review of the project in order to understand the view the organization and the project sponsor have towards risk management. Most important to note is that the amount of the plan details vary with the objectives of the project. Risk management plan is expected to identify the approach, duties and responsibilities of each stakeholder, budgets and time schedules, the different risks that are likely to occur and the likelihood that the risk will occur and will have some impact on the project performance. 1.1.1 Risk identification Risk identification is a very important aspect of risk management. This is because it helps the project team to come up with a more specific strategy that will be used to manage specific risks rather than using more general approaches. Risk identification is important in determining the likely positive or negative effects the risk is likely to have to the business (Rad et al 2002). The process of identifying risks can be aided by different tools and techniques which include: brainstorming, use of Delphi technique, interviewing and use SWOT analysis. Given the case of Alpha Project, the team member was given the opportunities to review the project and come up with a list of expected risks and their likelihood that they will happen. In the process, five risks were identified by the project team. The risks identified include: budget approval processes, the internal expertise and connection with local networks, failure to meet the deadlines, interference by external forces such as political pressure and the reorganization of the upper management. This process was important in that it helped the organization review, edit and understand various risks as illustrated by Project Management Institute (2001). 1.1.2 Quantitative risk analysis Qualitative analysis on the other hand, entails analyzing different risks to determine their intensity and prioritize them. Risks are also quantified in such away to find out the likely cost or benefit of a certain risk to the project. The tools and tools used to quantify risks include: use of probability and impact matrixes, making use of the expert judgment and making use of the Top Ten Risk Item Tracking (Rad et al 2002). For example in the case of the Alpha Project, different risks were analyzed and there costs rated based on the impact on the business. This was very critical in determining what risk was to be given priority. This was important in budgeting and scheduling. 1.1.3 Risk response planning Risk response plan comprise of those activities that will be committed to counter the effects of the risk. Response is more preferable when dealing with those risks that are likely to cause harm or loss to the business. The strategies used to respond to risks include: risk avoidance, risk acceptance, risk transference and risk mitigation. This process if very critical since it provides room for defining which strategy fits where and how it should be applied as demonstrated by Rad et al (2002). 1.1.4 Risk monitoring and controlling Monitoring is the risk management process that is employed to make sure that every activity is implemented as planned. It further helps in deciding whether there is need to make adjustments to the project to reduce the effect of risks. Monitoring is also used for update purpose and project management planning (Project Management Institute 2001). 2.0 Total Quality Management (TQM) Total Quality Management (TQM) is the process of modifying the internal processes of the organization in order to improve on their service delivery through efficiency. However, more important is that the TQM must be focused on the customer since he is the ultimate determinant of the company’s success or failure. TQM needs dedication for it to translate into productivity according to Harari and Oren (1994). 2.1 TQM implementation procedures TQM is characterized by four main six main processes for its implementation. First and foremost commitment by the top management must be embraced. This will allow for commitment and involvement of all people. In other words, the top managers are expected to set good examples for the junior employees to follow. Second, there is need to focus everything to the customer irrespective of the process. The objective is to achieve customer satisfaction and hence loyalty to the company products and services. Third, the TQM process requires that all staff be involved in the process of improving the internal processes (Besterfiels et al 2003). This is to make sure that the employees are always empowered and feel part of the process. This helps in creating good mindset. Fourth, there is need to make sure that, there are continuous improvements to the process in order to have the business remain at the level set by TQM. The TQM process of improvement can be done by use of Benchmarking and other statistical methods. Fifth, partnership with the company suppliers is very important in ensuring high level quality business. This is because the inputs to the business determine greatly on the quality of the output. Finally, a system to measure the implementation and outcome of the TQM process ought to be in place. For instance quantitative measures could be used to tell exactly how the business is performing currently as opposed to before. 2.2 TQM obstacles The other aspect that needs to be taken into account when implementing the TQM is the barriers that affect the process. Many of the failures to TQM are caused by avoiding to follow the procedures outline above. First and foremost commitment must be advocated to avoid sabotage by the members. Second, the organization structure is also cited to be a major barrier to TQM implementation. This is because many of the structures lack the flexibility required to support the implementation (Besterfiels et al 2003). This is more especially when the top management is not supportive. Lack of system of measure can also be an obstacle to TQM implementation. This is because it is not easy to tell if progress is made or not. The other obstacle is lack of continuous improvement. This is more important in making sure that customer changing demands are taken into consideration. Bibliography Besterfiels, D, Besterfield-Michna, C & Besterfield, G 2003, Total Quality Management, 3rd ed., Columbus, Prentice Hall. Harari, O 2004, Ten Reasons TQM Doesn’t Work. Management Review, 86, viewed 5th April 2012 from, http://www.trainquest.com/killington/resources/ten_reasons_tqm_doesnt _work.htm Project Management Institute 2001, A Guide to the Project Management Body of Knowledge, 2000 Edition (PMBOK® Guide), Newton Square, PA: Project Management Institute. Rad, P and Ginger L 2002, The Advanced Project Management Office. Boca Raton, St. Lucie Press. Read More