Olympics 2012 Risk Management Business Report
In fact, the management team can handle threats effectively through proper documentation of peril assessment, involvement of responsible individuals, and frequent revisits on potential impact. There are various individual risks including people, financial, weather, and technical. Once the possibility of occurrence and the related loss have been estimated, preventive measures include avoidance, sharing, transfer, and threat reduction. Table of Content Executive Summary 2 Introduction 4 Key Risk Areas of an Olympic Games Project 4 Early and Systematic Identification and Assessment of Risks 5 Appropriate Resources Allocation 5 Adoption of the Best Overall Risk Management Approach 6 A Risk Management Process for an Olympic Games project 6 Risk Identification 6 Risk Evaluation 8 Risk Monitoring 9 Conclusion and Recommendations 11 Individual Risks 11 Risks’ Evaluation 12 Potential Mitigation Strategies 13 Works Cited 15 Risk Management Business Report Introduction The Olympic 2012 Games’ governance model operated a risk management model that fitted its complexity and growing scale.
In fact, the organizing committee controlled disastrous events such as terrorism incidents, breakdown of London’s rail system, floods, volcanic ash clouds, power blackouts, and disease outbreak. The interaction of disparate casual processes gives unanticipated results with large potential impact. For instance, during the London 2012 Olympics, the global financial crises caught the organizers unawares and it made some private developers to withdraw (Jennings, par 2). Consequently, the scheme had to seek government backup through a refinancing package. The large-scale events such as the London 2012 Olympics should evaluate all activities that may be affected. Clearly, it results in damages that spill over to other parties, who may not be direct participants. Adoption of the Best Overall Risk Management Approach The management team should be keen on adopted risk mitigation schemes because the capital outlay engaged in a task implies that potential hazard is equally large unless carefully monitored.
They should ensure that anticipated balance between intangible and tangible costs and benefits are actually achieved. Actually, all participants should seek to manage potential risks using the best way possible despite divergent capabilities and interests. The relevant requirements such as new technology and unusual contractual or legal requirements should be availed for a successful threat reduction according to Chapman and Ward (2006). Surely, an Olympic Games project should provide specific control measures resulting from sensitive social, environmental, or safety issues and political, economic, or financial aspects. Categorization is another method of identifying the source of risk. Examples of classification of potential risks include cost, technical, client, schedule, contractual, environmental, people, weather, political, and financial (Cooper 2014). The individual category can be further subdivided into perils that are associated with human such as failure to possess required skills for project execution and sudden unavailability of the mission’s key persons.
Clearly, a risk breakdown structure is used to categorize identified threats using a table and give their details for a better understanding of where they have the greatest concentration. Risk Evaluation Second, a risk assessment should be conducted to evaluate its probability of occurrence, severity, and potential loss. The risk evaluation step takes place well in a workshop setting and addresses the threats with a higher rating on both impact and likelihood (Cooper 2014). Risk assessment is essential in minimizing the impact of the mission’s uncertainty. The issues and trends should be reviewed every month by the project teams while implementation brush ups should be done by program executive. Various checkers should be involved such as SROs, funder’s quarterly risk working groups, and audit committee of the ODA Board (Pinto 2016).
Reporting a threat frequently should be part of the project status recording and the anticipated costs should be included. The basic ways of managing risk include avoiding, mitigating, transferring, and sharing. Avoidance of a threat is the best thing that can be done in a project by preventing it from taking place through development of an alternative strategy with higher success probability (Loosemore et. al pg. Distinction of risks that are reasonably foreseeable and the ones that are ‘self-inflicted’ is an effective risk management scheme. As a matter of fact, the hazards that can be clearly foretold can be avoided through proper planning and careful execution. The protection should focus on events that are beyond the management’s control such as political unrest, weather, and employees’ strikes, which have significant impact on a task (Chapman and Ward 2006).
Indeed, focusing on reaction and recovery though insurance, control and command structures, and safety plans is appropriate in risk management. Finally, peril sharing is agreeing that loss has occurred and having alternatives. Indeed, it is essential for an Olympic project to plan for hazards from the beginning and continually organize mitigation strategies throughout. The mission may share hazardous activities by working collaboratively with companies in a host country if the task is international in order to minimize labor, political, and legal perils. al pg. Third, adverse weather conditions such as snowstorm and hurricanes may pose potential threat to a scheme. Clearly, this is an external risk, which may make it difficult for the players and spectators to participate optimally. The team members may not complete the project on time due to interruption of meteorological condition, especially where most activities are taking place outdoors as noted by Kerzner (796).
Furthermore, some portion of the project may be destroyed by adverse weather such as collapsing of a structure due to strong winds, which will force the organizers to restart again. The financial risk has greater possibility of occurring and has a negative impact on the project, especially where the procurement firm has a history of late delivery. Likewise, this threat has a high impact because key equipment is essential in successful implementation of a scheme and their absence can bring the mission to a halt according to Loosemore et. al (53). The threat may arise from loss of equipment during the project, provision of low quality work by the employees, fluctuation of costs of different items, and increased costs of maintaining the staffs.
The weather risk also has a greater possibility of occurring. Risk reduction is another good strategy of dealing with people threat by enhancing safety measures to minimize workplace accidents. The leaders should handle the members with dignity to keep them eager to participate in the project. Truly, it is important to develop strong interpersonal and communication skills among the teams as well as keeping them motivated throughout to minimize the turnover rate (Kerzner pg. A strong feedback channel should be established to ensure all issues raised by members are dealt with effectively. The financial risk can be mitigated through avoidance. This risk should be monitored at all times because of its highly unpredictable nature. The technical skills should similarly be avoided.
As a matter of fact, the team leading a project should invest in learning how to use different equipment and restrain from purchasing items which they have no idea how to operate them. On the same note, complex projects that require new technology should use existing techniques that have proven successful instead of embracing innovative systems that are lowly priced but are peculiar to the group (Kerzner pg. Efforts should be made to acquire and engage people who have the experience and expertise in order to realize the profits and benefits gained by a successful project. Kerzner, Harold. Project Management: Case Studies. John Wiley & Sons Inc, 2017. Loosemore Martin, Raftery John, Reilly Charles, and Higgon David. Risk Management in Projects.
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