RISK MANAGEMENT: ARTICLE REVIEW & REVIEW OF RISK MANAGEMENT APPLICATION IN AN ORGANIZATION
This research has two objectives. The first objective is to review an article dealing with project risk management. The second objective is to review the application of risk management in a real organization.
The article reviewed deals with risk factor analysis. Kindlinger and Darby (1-5) presented this article at the Project Management Institute Annual Seminars & Symposium in September 2000.
Kindlinger and Darby (1) describe a six-step risk factor analysis process. The six steps in the risk factor analysis process are as follows:
List all activities and tasks involved in the project
Develop a risk-ranking scale for each risk factor identified in relation to each activity or task
Rank the risk for each activity or task for each risk factor
Sum the risk rankings for each activity or task
Identify possible risk reduction actions for each activity or project task
The development of the list of project activities and task s begins with a review of the project work-breakdown structure and the baseline schedule for the project. This review leads to the development of a project activity flow chart. The flow chart facilitates the identification of schedule risks and cost risks associated with the project Kindlinger and Darby (1).
Kindlinger and Darby (1) define a risk factor as an issue with a potential to "drive the behavior of top-level schedule and cost performance measures for a given activity". Risk factor identification involves assessing each activity included on the project activity flow chart in relation to the potential for (1) technical risk, (2) schedule risk, (3) cost risk, and (4) funding risk (Kindlinger and Darby 1-2).
Technical risks involve scope definition, project design, and operational factors with a potential to affect task performance. Schedule risks concerns the adequacy of the time all...