Project Risk Management of South Africa's 2010 World Cup - Case Study Example

Table of contents Introduction……………………………………………………………… 2 2. Risks of preparing and staging the football world cup in South Africa…. 2 3. Response strategies to manage the risks of world cup world cup 2010 …. 6 4. Project assessment………………………………………………………… 9 5. References………………………………………………………………… 10 Project risk management of South Africas 2010 world cup challenge 1.Introduction By winning the bid to host the 2010 FIFA world cup, South Africa has grabbed an excellent opportunity to escalate its socio-economic growth and showcase its capabilities to the entire world. It is ecstatic for being entrusted with such a huge opportunity. Though this country has hosted a number of significant sports events in the past, this one is going to be its first event of such a great magnitude. South Africa has 3 years time to prove its competence in successfully managing this project, which involves a lot of risks. South Africa has always been identified with a number of negative things in the past. These negativities pose a great risk in hosting such a mega event. This country has never got such a chance to propagate its plus points at any previous time in history so it should focus on appropriate planning of strategies and successful management of risks. 2. Risks of preparing and staging the football world cup in South Africa The political risks are high, as the opposition would always scrutinize each and every effort and actions of the ruling party. Organizing such a big event without any political upheaval is nearly impossible. Reports have already started coming which state that opposition feels that spending so much of money in a gala event is not required when South Africa has other burning issues like poverty, unemployment and underdevelopment to deal with. Each and every issue related to world cup is taking a political angle. There are a section of people who believe that showing so much of interest in this event should not be the priority of the government, instead the focus should be in the overall development of the country. This viewpoint has the risk of further aggravating the political tensions as the opposition may try to project this viewpoint of a small section of society into the opinion of the masses. This entire hullabaloo will negatively impact the feelings of those who are pro FIFA world cup in South Africa and give a chance to the opposition in creating a situation that might pose a threat to the hosting and staging of the sports event. All other controversial issues of the South African politics will also come in the fore thus distracting the ruling party’s enthusiasm and focus towards the event. Hence political unrest in the backdrop of this gala event is a major threat to this project. Other major controversies like power shortage in the country and underdeveloped broadcast infrastructure would be greatly emphasized by the opposition which would pose a threat to the South Africa’s image to the entire world. There is a risk from a section of people who unfortunately have been victims of the rampant crime in the country. There is no denial of the fact that the general public is very concerned and somewhat dissatisfied with the safety aspect in the country. Those who or whose family members have been a victim of this crime have started protesting this event in many ways. They are demanding the change of world cup venue because they feel that the people who will come as visitors to this country will not be safe. They argue that where the local public is traumatised because of the crime rate how can the visitors be safe? This attitude of a section of people can adversely affect the number of overseas visitors that the organisers are expecting. There is a risk of tussle or different viewpoints between the strategic partners. As all the partners have put in lots of money in the event they would think about the benefits in their own terms. This may result in conflict. Not only this there is strong possibility of tussle in the domestic bidding of different services related to this event like transportation, construction services, voluntary opportunities etc. Transportation issues is a great risk too, as according to BBC (2006) “Transport is an ongoing headache: South Africas cities rely on privately-owned minibus taxis, and long-anticipated plans to upgrade the fleet are only now starting to get under away. The Gautrain, an ambitious rail project aimed at easing traffic congestion in the Johannesburg-Pretoria area, will only be partly completed by 2010. It will take tourists from the airport as far as the suburb of Sandton, but will go nowhere near any of the stadiums.” (para.15-16) In this condition, staging an event in which huge turnover is expected everyday to the stadium is full of risks. According to the SouthAfrica.info Reporter, (2007) “Games will be played in 10 stadiums throughout South Africa: Soccer City (Johannesburg); Ellis Park Stadium (Johannesburg); Kings Park Stadium (Durban); Free State Stadium (Bloemfontein); Green Point Stadium (Cape Town); Mbombela Stadium (Nelspruit); Peter Mokaba Stadium (Polokwane); Nelson Mandela Stadium (Port Elizabeth); Loftus Versfeld (Pretoria) and Royal Bafokeng Sports Palace (Rustenburg).” (para.2) The arrangements in all these venues should be exemplary and the organisers cannot afford to be careless about even the minutest preparation. A lot of construction and up gradation work is required to make the stadiums up to the mark. Unfortunately, lots of controversies are attached to this construction and up gradation work too. The opposition feels that the poor have more right on the money that is being used to build state of the art stadiums. Also for the construction of one of the above-mentioned stadiums a 130-year-old golf course is under the threat of getting displaced. This displacement issue is not acceptable to many. Their disagreements pose a risk to the project. Crowd violence inside the stadiums cannot be ignored. Some may try to commit crime to dampen the image of South Africa. Others might try to indulge in violence as way of showing protest if the organisers sideline any of their demands in these three years. Around three million visitors from all over the world are being expected to South Africa for the world cup. In many such events it is found that tourists generally waste scarce resources of the host country. Most of the times they do it unknowingly because may be the resources they are wasting in the host country are in abundance in their own country and they fail to realize that what is in abundance for them is scarce for their hosts. This attitude might raise another spurt of controversies while hosting the event as the public might not approve of this and blame the organisers for the callous attitude of the tourists. During the hosting and staging of the event, bad weather can prove to be a great threat. So to be successful the organisers should not neglect this risk, as their entire effort of these three years will be lost by even a single day’s bad weather if plan’s to tackle it is not in place. Construction and up gradation work has to be done at a maddening pace as the organisers cannot afford to do even a day’s delay for such a spectacular and global event. However compromising on the safety of the construction workers should never be the criteria. Most mishaps take place due to poor standard of construction material and below mark working environment. As it is, the opposition and a section of people in general are not happy with the staging of this event. If any mishap takes place during such a crucial phase, the media, the opposition and the protestors of this event will blow up this issue disproportionately and would try to present a bad picture of the entire situation. 3. Response strategies to manage the risks of world cup 2010 It is very important to reduce the risks in order to make this project successful. Since this is a huge project and in fact the very first project of South Africa of such a great magnitude, all the major strategies can be applied in this case to make this gala event a super hit. Strategies for Negative Risks or Threats, Strategies for Positive Risks or Opportunities, Strategies for Both Threats and Opportunities and Contingent Response Strategy can be applied for full proof success. According to the Strategies for Negative Risks or Threats there are three ways of dealing with the risks. They are the strategies to avoid, transfer or mitigate. Avoid: To remove the threat posed by the various risks, the plan can either be changed or the project objectives can be isolated. The risk objective that has chances of getting affected the most can also be reworked. In this situation there is a problem with the construction of one of the ten stadiums. If this issue arouses too much of furore because of the displacement of a 130 year old golf course, then the organisers should rework on the venue or on the design of the stadium to attain harmony. They can keep the masses and local authorities abreast of all the developments so that they do not feel cut off. Involving them and properly communicating with them can make a difference. According to PMI (2004) “some risks that arise early in the project can be avoided by clarifying requirements, obtaining information, improving communication or acquiring expertise.” (p. 261) Transfer: This means transferring the negative impact of a risk or threat to a third party who is better equipped to handle it. Through this strategy the third party gets even the ownership of the response. This kind of strategy is not just confined to warranties, guarantees, insurance, bonds performance etc. There can be contracts in which liability for specified risks can be transferred to the third party. For eg. The organisers should give the responsibility to keep an eye on law and order and prevent crowd violence and tourist unsafety to a pool of government and private agencies dealing in the security sector. Mitigate: It implies to the efforts made to reduce the probability of a risk or threat to actually take place. Since there is three years time to make preparations the organisers of this event have ample time to take action towards reducing the above-mentioned threats. Problems of power cuts and infrastructure incompetence can be worked out. According to the Strategies for Positive Risks or Opportunities the measures such as exploit, share and enhance can be used. Exploit: There is a great opportunity for socio economic growth of South Africa and by using this strategy the organisers can expect that the opportunity get realised completely. According to PMI (2004)“ directly exploiting responses include assigning more talented resources to the project to reduce the time to completion, or to provide better quality than originally planned.” (p. 262) Share: This means taking the services of third party who can help in managing a particular risk. The opposition can be made a part of the preparations to avoid political risks. This is not easy but a friendlier attitude towards them will make them share the responsibility of propagating a good image of South Africa in front of the entire world. Enhance: Through this strategy the aim is to strengthen or facilitate the available resources or opportunities so that the threats get decreased. The transportation problem can be solved this way. According to the third strategy; Strategy for Both Threats and Opportunities, the aim of the organisers should be to work diligently for removal of risks and enhancement of opportunities without compromising on the project management plan. Contingent Response Strategy is extremely important too because in this case there is around three years time for the actual event to take place. The organisers can brainstorm all the risks that may pose threat while hosting and staging this event and make response plans for all the threats that may occur. During the time of actual event there would be no problem in handling the threats because according to contingent response strategy plans to be executed in all possible negative situations would already be discussed and worked out beforehand. 4. Project assessment The project is destined to be a great success as there is enough time to plan the project in detail, assess the risks and deploy necessary strategies to enhance available opportunities and remove the threats as much as possible. It is a positive sign that the event is attracting increased marketing and broadcast presence than the last world cup held in the year 2006 in Germany. The money is not a problem because the contracts being signed this time are much more than what it was in the last world cup. The popularity that FIFA world cup enjoys and the trust that has been bestowed in South Africa has positively influenced the sponsors. If the finance is in place, then other things fall in place easily. Hence the time and money factors point towards the success of this project. According to Westall, (2007) “"Where the soccer is going to take place, where the stadiums are, where the police are, there will be low crime levels," said Andre Pruis, deputy national commissioner of the South African Police Service.” (para.2) Hence those who matter and can contribute in the success of the event are ensuring problem free environment during the hosting and staging of the games in the context of their respective fields. The statement made by Frame that “It seems as if everyone is involved in risk management these days” (2002, p.73) describes the present scenario of South Africa on the eve of the world cup well. The efforts and enthusiasm to manage the risks are high which justifies the belief that proper risk management and the collective effort of all will make this project a success. References Frame, J.D., 2002. The New Project Management: Tools for an Age of Rapid Change, Complexity, and Other Business Realities. 2nd ed. San Francisco: Jossey-Bass. 2004. A guide to the Project Management Body of Knowledge. 3rd ed. USA: Project Management Institute, Inc. BBC NEWS, 2006. South Africas 2010 Cup challenge [online]. Available from: http://news.bbc.co.uk/2/hi/africa/5141582.stm [cited 13 February 2007]. SouthAfrica.infoReporter, 2007. Welcome To South Africa: Host To The 2010 FIFA World Cup. [online]. Available from: http://www.sa-venues.com/2010.htm [cited 13 February 2007]. Westall. S., 2007. Crime won’t affect World Cup venues. [online]. Availablefrom:http://www.int.iol.co.za/index.php?set_id=6&click_id=2871&art_id=qw1169787961763B226 [cited 15 February 2007]. Read More