MGT8077 Project Risk Management Assignment Sample

Introduction - MGT8077 Project Risk Management 

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In running a project, the company plans its growth and implements strategies for sustaining the competition. To run the project smoothly, the company must prepare for risk and other hurdles coming in the way. The risk management team plays a crucial role in finding out the root cause of the issue and planning strategies to overcome that risk. The risk can be varied in nature and directly related to the execution and production of the company. If the output does not meet the standardised quality, the company will not succeed in selling. All the company’s departments are correlated with each other and must surpass all the stages to achieve the result. Laing O’Rourke is Australian-based international construction company. Dealing with heavy machinery leads them to numerous risks in their way. They have a risk management team to develop the risk management plan.

2 Organisational

2.1 Organisational Information

Laing O’Rourkeis is an Australia-based construction company that was established in 2001. It was the extension of John Laing Plc, a construction firm based by R O’Rourke & Son, whose origin can be found in 1978. They work for clients in the Middle East, Australia, and the U.K. They build shopping malls, buildings, and private property for individual clients and organisations. Here the Internal business environment of this particular company ill described below:

Strengths	Weakness
· This company constructed a distribution channel through direct marketing. · They built a successful advertising strategy with dedicated marketing staff. · · The company has computerised security. · · Personnel decisions by tech-savvy managers. · One won’t see the same building style since corporations build different residences, businesses, industries, and highways. Architectural design and art extend to buildings and roadways due to building companies’ constant new projects.	· Rural areas might cause Laing O’Rourke challenges. · There’s no incorrect communication. · Can not agree on prices with vendors. · Materials procurement errors.
Opportunity	Threat
· New-customer-focused employees · To discover new consumers, construction businesses need a marketing department. The admin shouldn’t handle marketing and customer service. If so, admins can’t do either.	· Variable raw material prices challenge pricing tactics. · The registration procedure will take longer. · Increase construction competition. · Competitors use new tactics. · Organisations may increase their market share and gain consumer favor by evaluating their strengths, flaws, opportunities, and threats.

Table 1: SWOT analysis of the company

(Source- I??k et al. 2018)

2.2 Project Details

The construction-based company Laing O’Rourke has undertaken a project named Darlington Bridge Upgrade Project in Australia. According to Chatterjee et al. 2018, the nation has observed the most challenging infrastructure project in terms of grandeur of the length. They have implemented modern techniques, unique methods of Construction, and industry-leading designs and ideas.

The construction-based company is implementing new techniques to build a 3,000 tonne, 180-meter bridge. This method is never seen in the entire nation before.

Assessing risks	The way of rising risks	Likelihood	Risk score
Technology risk	Due to Covid-19, the increasing application of technological instruments can enhance the risks of economic outrun.	Medium	7
Communication risk	The deficiency of regular communication can increase the chances of failure of the project deliverables (Kendrick, 2015)	High	9
Scope creep risk	Uncontrolled changes in the scope can increase the chances of project failure.	Medium	7
Cost risk	Without having a proper cost assessment, technology or analysis process may increase the chances of budget overrun (Kendrick 2015)	High	10
Operational risk	Lack of team member coordination may lead to project failure. It is essential to manage the project appropriately and ensure that every operation for the highway project is properly maintained.	Medium	8
Health and safety risk	Due to Covid-19, the risk of health and safety increases, which is why it is essential to maintain a safe work environment (Chapman 2016)	High	10
Skill resource risks	A lack of skills in team members may lead to the project’s failure.	Low	4
Performance risk	Performance risk may lead to excess financial challenges (Chapman 2016)	Medium	6
Market risk	Credit, liquidity, and fluctuation of interest may increase the chances of challenges.	Medium	6
External hazards risks	Natural calamities may lead to challenges within the business environment	Low	4

Table 2: Risks

(Source- Self-created)

2.3 RISK ANALYSIS OF THE PROJECT

A considerable risk arises that may cause financial concerns, disruption of the internal system, and low confidence level of working members. The risk factors can impact the company’s finance, technologies, working methods, and productivity and reduce its growth. Lack of skilled labour and modern machinery, shortage of resources, and violating government policies are major risk factors that may lead to severe damage (Kendrick, 2015). The companies hire the best panel of experts to combat the risk coming in front of their execution process. Per the view of Vladimirova et al. 2018, the experts learn about the nature of internal or external risk for risk identification. According to Wang et al. 2020, The risk identification process leads to analysing the organisation’s scope, methodology, and communication. It has a significant impact on the execution process of the company (Hilton, 2009)

3. Literature Review

3.1 Initial Scanning of Resources

While evaluating the literature review, seven articles were selected, based on which four were chosen as the final articles to do literature review. [Refer to Appendix]

As we know, the literature review is considered one of the important parts of a study that helps to provide b evidence and factual background. It is important to analyse and research a particular topic based on previous reports and studies. Important data and information are collected from previous research, the opinions of researchers’ articles are evaluated in the literature review, and their strengths and weakness are highlighted in the report. This has helped the chosen company to formulate its risk factor.

3.1.1 Risk Identification

Risk identification is one of the recommended processes that help determine various risk factors that may affect the company and reduce its growth. This process helps to analyse obstacles and barriers that can cause in the present time or may appear in the future. Any traditional companies have tended to overlook the risk factors associated with the project. The risk can be generated by unpredictable events that will fail the company’s planned strategy. The companies have realised the unforeseeable danger that comes their way and creates problems in surviving in Civil Industry. Accordion to LI et al. (2020, p. 10), the competition is immense, and the risk factor is considered severely by many Multinational Companies. Therefore, they are taking many measures to combat the situation. The sustainable construction concept offered by the company gives long-term economic feasibility, high-quality product, and eco-friendly production. Here two respective journals are used to make a comparative study that will help demonstrate risk factors that severely impact the company’s project.

The first journal selected is “Study on Risk Assessment of Bridge Construction Based on AHP-GST Method” by HUANG et al. (2018, p. 7), which was published in 2018 and was a peer-reviewed article. According to HUANG et al. (2018, 5), the risk factors are identified as associated with the complexity of the project’s geographical location, participants in the execution of the project, and the considerable cost scale of the project. The company provided Construction with all Risks insurance to the members associated with the project as protection coverage from any damages. The company’s risk management focuses on the Superstructure, that is, economic constructibility and safety of building a bridge. The construction cost must meet the cost of the resource and labour. The period plays a crucial role as if the construction period is extended, the relative cost of Construction will increase. Combating natural calamities like floods and typhoons are significant risk factors in the construction process. The company’s risk management team uses a natural Disaster Assessment Network Map. A detailed description of all the common risk factors in the journal is the strength that can be the guiding factor for many scholars and experts in this field. The weakness of the journal is fewer recommendations in dealing with the adjoining risk of the project. SWOT analysis helps to measure the weightage of various concerns that may lead your organisation to follow the way of success by reducing the particular obstacles. By measuring the weaknesses and strengths, it is easy to resolve the solution by applying appropriate methods.

The second journal selected is “Information Management Strategy of Bridge Construction Technology Based on Big” by MENG (2021, p. 20). Compared to HUANG et al. (2018), in MENG (2021, p. 11) journal. The risk factors are addressed in the journal covering all the grounds of the project, such as project plan accuracy, problems related to remote sites, and issues in the water supply. Using new technological assistance can create difficulties, construction machinery failure, and power failure can delay the finishing schedule of the project. There can be a mechanical collision and damage to the construction site, as important climate factors like storms and fires can damage the project.

In some cases, even such hazards are caused by human errors, but natural elements cause other such hazards. The purpose of this is not to go into a detailed study of the state’s hazards and how it can be better prepared for a disaster. However, to present common hazard issues that may jeopardise an organisation’s ability to operate with minimal disruption and mitigate damage in an emergency. The strength of the journal is the research data and the numerical statistics of the risks associated with the project. The weakness of the journal is not sufficient fundamental information on the risk factors given.

3.1.2 Risk Analysis and Evaluation

The risks must be identified and taken into consideration at the time of planning the project. A risk assessment or evaluation process has several factors, such as analysing the aspect of what if the situation comes another way. The alternate approach only avoids the risk factor in the execution of the project. The fault tree analysis examines the source of the risk; failure mode event analysis examines the construction plan process; hazard operability analysis discusses the issues coming from the surrounding of the project. Analysing the risk factor helps to cope with the many possible risks. It provides the ground to recheck the company’s risk management strategies.

The first journal selected is “Safety risk Assessment for Construction of Highway on Plateau Mountainous” by TIAN et al. (2021, p. 14); the risk analysis is given in the index form. The Construction of highways in the offbeat domain like plateau faces the lousy condition of the construction plan and natural diversities like a landslide, collapse, and other geological disasters. On a practical level, a road network has various technical problems as it is a continuous network consisting of three main layers of materials, machinery, and technologies. All these factors are connected and have enough power to make a measurable impact. The first layer consists of the construction material, and the second is the machinery to create this material and finish the task. The third layer is the network connection. This last layer is also continuous and depends on both the nature of the roads and the obstacles and types of road junctions. Comprehensive analysis of disaster risk is evaluated in the journal, including manage risk, economic trouble, social risk, disaster risk, and topographical risk of the project. The risk matrix method is implied to get the idea of the importance of the risk. The risk columns are used to analyse the degree of risk influence and to build a safety risk assessment. The strength of the journal is the description of the mathematical interpretation of the risk factors in the project. The weakness of the journal is not focusing on the alternate plan to avoid the risk of the project.

The second journal selected is “Study on Identifying Significant Risk Sources during Bridge Construction Based on Grey Entropy Correlation Analysis Method” by WANG et al. (2021, p. 24) analyses the risk factor during bridge construction. The systematic risk factor determines all the aspects of the census process and the safety risk event in the construction process. This occurs by the corresponding risk source. In the journal written by WANG et al. (2021, p.15), in comparison to TIAN et al. (2021, p. 30), it has been seen that the company has undertaken a survey process, which is dynamic. To analyse the source of the risk factor, the company evaluates the risk with scientific calculation to get accurate and specific results to identify the start of the risk. The strength of the journal is the total evaluation of the risk and systematic analysis of the risk factors. The journal’s weakness is insufficient recommendations or the alternator plan to execute the project. 

Recommendation

Several different risk management tools and techniques evaluate the project’s risk factors. The risk is supposed to be inherent while planning and executing the project. Risk management is the methodology adopted by the companies at the beginning of the project to ensure the safety of the members associated with the project. The project managers respond to the risk and adopt suitable strategies to get a better outcome for the project. The tools the company assumes for risk management are as follow:

Root cause analysis: the root cause analysis is the factor identifying the real risk, which is incorporated into the true essence of the project. After investigation, the risk management team plays a crucial role. They should not be only responsive but also preventative as well. Lack of efficiency in the management team can identify the root cause after the arrival of the issue (Thomas 2017). It mainly addresses the cause of the risk and not the symptom. The tool highlights the question of “what is the risk? How did it occur? Why did it occur?” etc. After getting the answers to these questions, Laing O’Rourke can easily develop a secondary plan to overcome the risk factor in the execution process (HUYMAJER et al. 2022, p. 50). The company has appointed experts from science, technology, engineering, mathematics, and civil to get the best insight into dealing with the risk factors.

SWOT: It is the tool that analysis the strength, weaknesses, opportunities, and threats to identify the risk factor. According to BREDESEN et al. (2017), the tool must be implemented to determine the project’s strength factor. Simultaneously after getting the strength factors of the company, weakness automatically comes up in the critical evaluation. The weakness exposes the ground where the company can work to get effective results. The land where the project is lacking or some missing factors can be detrimental to the execution of the project. This gives the platform for the adverse risks (Chapman 2016). Opportunities are referred to as positive risks, and threats are considered negative. The findings of the SWOT can be classified in a four-squid grid. Laing O’Rourke studied the four-squid grid before planning the project. The company mainly focuses on its strength to overcome their weakness.

Risk assessment: the tool has been developed to examine the nature of the risk. The risk factors can be social, economic, technological, legal, political, and environmental. All these grounds have their own risk and dispute factors. These factors are directly related to the project and the company’s business. ZHANG and SONG (2020, p. 5) further mentioned that these factors are correlated and influenced by each other. The risk management team evaluates the risk factor to find out preventive measures for the risk. Laing O’Rourke has been running their business successfully over the decades and faced numerous risk factors in the construction sites. They implement strategic plans to analyse the nature of risk and act accordingly.

The above figure systematically pointed out the risk management process through the risk maturity model (Huemann 2016). First, the risk factors should be identified, and then proper analysis and assessment of the risk are essential to get the result. Then risk should be controlled, and the review of the whole process is articulately described to complete the cycle. To manage the risk of the Darlington Bridge Upgrade Project, the project manager of Laing O’Rourke can implement project management tools such as risk assessment and SWOT to gain the best result (Wei et al. 2018).

Recommendation
S- Specific	The Risk related cases need to identify properly.
M- Measurable	With the help of the risk management team, all minds of risk can be understood properly, and the risk signals also can find out.
A- Attainable	Therefore, the company’s SWOT analysis is highly needed after a particular time gap.
R- Relevant	The risk’s nature also needs to be found with some proper evidence.
Time Bound	It will take around six months to 1 year to resolve all the risks for this particular company.

Table 3: Recommendation for the company development purpose

(Source- Self-created)

Conclusion

The Australian construction-based company Laing O’Rourke has undertaken a Darlington Bridge Upgrade project. This report seriously evaluates the risk factor compared with the other journals. The predominating risks are identified in the evaluation process. The risk assessment identifies the nature and source of the risk. Still, in the conclusion, one needs to consider that risk management is an ongoing process and cannot be solved within a stipulated time or in one time period. Risk management can also be termed the crisis management of the project. The calculations, matrix, and data overview the ongoing risk factors. The company takes the help of scientific invention to mitigate the risk factor and to become specific in their approach. The literature review gives an authentic approach to the analysis of the report. The recommendation is given with the perception to strengthen the loopholes of the company, and implementing the tools will provide effective results.

References

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BREDESEN, RE DRAPALIK, M, & BUTT, B 2017, Understanding and acknowledging the ice throw hazard - consequences for regulatory frameworks, risk perception, and risk communication. Journal of Physics: Conference Series, 926(1),.

Chapman, RJ 2016, The rules of project risk management: implementation guidelines for major projects, Gower, Surrey England. [Appendix H]

Chatterjee, K Zavadskas, E K, Tamošaitien?, J Adhikary, K & Kar, S 2018, A hybrid MCDM technique for risk management in construction projects. Symmetry, 10(2), p.46. Available at: https://www.mdpi.com/2073-8994/10/2/46

Hillson, D 2009, Managing risk in projects, Gower, Farnham. [pp. 44-46]

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Huemann, M, 2016, ‘Auditing projects and programs, in JR Turner (ed.), Gower handbook of project management, 5th edn, Routledge, New York ch 6.

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Kendrick, T, 2015, Identifying and managing project risk: essential tools for failure proofing your project, 3rd edn, American Management Association, New York. (Chapter 10)

LI, Q L E I J, TIAN, W Y A N Y, ZHANG, H, ZHANG, H & XIANG, Q 2020, Risk estimation of large complex bridge construction based on factor analysis. IOP Conference Series.Materials Science and Engineering, 780(7),.

MENG, F, 2021, Information Management Strategy of Bridge Construction Technology Based on Big Data. Journal of Physics: Conference Series, 1852(3),.

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WANG, J, HE, J, HAN, Y, DENG, L & LI, W 2020, Risk Assessment on the Construction of Vacuum-Aided Concrete Filled Steel Tube Pouring. IOP Conference Series.Earth and Environmental Science, 455(1),.

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ZHANG, H & SONG, X 2020, Applications of Monte-Carlo method for risk assessment of buildings at service stage. Journal of Physics: Conference Series, 1549(3),.