The risk management process is imperative in identifying, assessing, monitoring, and management of risk. These steps are vital in analysing the vulnerability of the risks through prioritization based on their severity. Risk assessment is an essential step in the risk analysis stage. Applying risk management strategies entails the identification of potential risks to a business and the subsequent enactment of prioritizing on their occurrence. Therefore, risk analysis comprehensively prioritizes the occurrence of risks. In this case, the identified risks are determined on their likelihood to occur and the consequences regardless of the risk treatment put in place. Nevertheless, before the identified risks go through risk monitoring stage, their threat levels and severity are determined. Accordingly, the versatility of a successful risk management plan provides a detailed explanation of the components of risk management which includes, risk identification, analysis and the mitigation strategies that are further used in stipulating the risk treatment processes (Aven, 2008).
In order to identify threats and vulnerabilities to an organization, risk analysis provides a procedural process of deciphering all the mentioned uncertainties. According to Aven (2008), risk analysis is fundamental in ascertaining the probable impacts of the identified risks and their subsequent implementations on how they can be eliminated or reduced (p.3). Concisely, risk analysis is the procedural investigation of the uncertainties and risks that are encountered in organizations. There are two methods used to undertake risk analysis, namely; qualitative analysis and quantitative analysis.
[...] Heldman, K (2009) Pmp Project Management Professional Exam Study Guide: Epub Edition. John Wiley & Sons Inc. [Online] Available at: [http://books.google.co.ke/books?id=MDvlyPBpAiMC&pg=PA450&dq=risk+reass essment&hl=en&sa=X&ei=FJrNUfuaN4jfswattIFQ&ved=0CEEQ6AEwBA#v=onepage&q= risk%20reassessment&f=false (Accessed on June 28, 2013). Kerzner, H (2013) Project management: A systems approach to planning, scheduling, and controlling. Hoboken, New Jersey: John Wiley & Sons, Inc. [Online] Available at: http://books.google.co.ke/books?id=QgQQC5qRtzgC&pg=PT863&dq=risk+monito ring+and+control+in+project+management&hl=en&sa=X&ei=bFnNUc- bI8qUswbF0IDQCw&ved=0CEAQ6AEwAw (Accessed on June 28, 2013). McGeorge, D and Palmer, A (1997) Construction Management; New Directions. London; Blackwell Science. Newell, MW (2005) Preparing for the project management professional (PMP) certification exam. [...]
[...] This is in regard to the dynamic nature of some risks as the project progresses on. According to Kerzner (2013), risk monitoring and control stage is a crucial stage where the managers make sure that risk plans are executed whilst watching over for the newer risks. These sentiments are shared by Newell (2005) who states that this stage is vital even in the process of keeping track of the identified risks and implementing strategies that effectively reduces the risk (p. [...]
[...] Therefore, the risk monitoring and control stage is vital during the lifetime of the project. The major purposes of risk monitoring and control are to determine if: project assumptions are still valid, proper risk management policies and procedures are being followed and keeping track of the identified risks and the probability of the new ones occurring. Newell (2005) posits that it is essential to recognize the vital tools and techniques that are included in the stage, for example, in the process of identifying new risks and evaluating the effectiveness of the risk responses catered during the risk reassessments and risk audits respectively (p.190-191). [...]
[...] The other method that is employed in describing risk analysis is quantitative approach. In this case, quantitative was adopted and briefly mentioned in the final presentation because of the reasons discussed above. Nevertheless, this method should have proved worthwhile in this study, as it is most relevant in addressing and evaluating the identified risks (“Department of Commerce, 2004). As opposed to the qualitative risk analysis approach, quantitative risk analysis approach embraces the use of numerical data in describing the frequency of the occurrence of the threats and their consequences. [...]
[...] On the other hand, technical performance measure outlines the completed milestones of the project and helps identified if the planned objectives are achieved. PMBOK (2004) also explains the significance of reserve analysis in evaluating the eventualities that may happen and stipulating the adequate requirement set aside to counter such risks. Lastly, the status meetings provide an effective environment where risks are discussed and their remedies realised. According to PMBOK (2004), these meetings should regularly prioritize risk management as an agenda in the regular meetings held by the members of the project. [...]
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