Risk Management Essay Example | Topics and Well Written Essays - 2000 words

Risk Management - Essay Example Apart from corporate institutions, there have been other times when nations, states, municipals, companies and individuals have had the task of undertaking major developmental projects such as the construction of malls, stadiums, roads, bridges and so on. These are also projects that demand a carefully tailored project management scheme to ensure successful completion (Department of Defense, 2008). Among the core components of project management is the management of risk, including procurement risks. This paper shall therefore review the role of project management in ensuring success in project delivery; particularly with an emphasis on procurement in the supply chain management of projects. Overview of Project Management The need to manage projects is set rolling by the fact that there are projects to manage. It is just right to therefore first give an indication of what a project is. In the view of Smith (2009), â€Å"A project is a group of activities undertaken to meet one or mo re specific objectives.† This means that a project is made up of a series of tasks that must be delivered as a process rather than an event (Department of Defense, 2007). ... Among all the works that the project manager must do, risk management is one area that when slightly overlooked could lead to a lot of disastrous failure. The following sections therefore narrow the discussion on project management down to risk management with particular emphasis on the risk that comes with procurement. What is Risk? In project management, risk may simply be referred to as an uncertainty (Clinger-Cohen Act of 1996). This means that risks arise when in the course of the project delivery, certain uncertainties pull their heads. The Project Management Informed Solutions (2012) identifies two major sources of project risks, which they claim come from dependencies and assumptions. With reference to dependencies, there could be both external and internal dependencies to the project and each of these could result in major uncertainties that are unknown to the project manager. This brings to context, the discussion on procurement as a major entity that possesses a lot of ris k to project managers. The reason why this is so is that in procurement, project managers hardly have any infleucne on the external manipulations that will be associated with the process. For instance once the bidding process in opened and a procuring company is landed upon, all the determinants of the items that are being sourced to be delivered becomes dependant on the procuring agent rather than the delivering company. Ultimately, risk could therefore be given as the product of impact and probability. There shall later be detailed discussion on probability and impact as the component of risk. Importance of Risk in all Projects Having