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MGT8077 Project Risk Management Assignment Sample

MGT8077 Project Risk Management

INTRODUCTION

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This study proposes a methodology for analysing the link between Risk Management adoption and company performance by examining the moderating influence of sustainability reporting methods. Value-added metrics, such as economic value added, are used to assess business success (EVA). Businesses' overall performance benefits greatly from an effective ERM implementation. As a result of this lack of research, it is difficult to determine how ERM adoption and reporting on sustainability might affect an organization's financial performance. There are many commercial organisations throughout the world that do not include sustainability measures into their long-term business plans.In running a project, the company plans for 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 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 standardized quality, the company will not succeed in the selling process. All the company departments are correlated and have to 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 CONTEXT

2.1 ORGANISATIONAL INFORMATION

Laing O'Rourkeis is an Australia-based construction company established in 2001. It was the extension of John Laing Plc, a construction firm based by R O'Rourke & Son, founded in 1978. They work for clients located in the Middle East, Australia, and the U.K. They build shopping malls, buildings, private property for individual clients and organizations.

2.2 PROJECT DETAILS

The construction-based company Laing O'Rourke has undertaken 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 implements techniques and new methods to build a 3,000 tonne, 180-meter bridge. This method is never seen in the entire nation before. On this basis, the risk profile of the project could be regarded as quite high as indicated in Table 1.

2.3 RISK ANALYSIS OF THE PROJECT

The company's risk is considerable finance, skilled labor, using expensive modern machinery, shortage of resources, violating government policies, and other terms and regulations (Kendrick 2015). The companies have hired the best panel of experts to combat the risk coming in front of their execution process. As per the view of Vladimirova et al. 2018, the experts learn about the nature of risk, whether internal or external, for risk identification (Hilton 2009). As per Wang et al. 2020, The risk identification process leads to analyzing the organization's scope, methodology, and organization communication. It has a significant impact on the execution process of the company.

3. LITERATURE REVIEW

3.1 INITIAL SCANNING OF RESOURCES

While evaluating the literature, seven articles were considered of which four were chosen as the final articles to do literature review. The details of the articles and their relevance to this anslyis are provided in Appendix A]

the following tables would explain the risk assement evaluating the sevral factors such as natural disaster, production malfunction.

3.1.1 RISK IDENTIFICATION

The generated risk by unpredictable events will fail the company's planned strategy. The companies have realized the unforeseeable danger that comes in their way and creates problems in surviving in Civil Industry.

Accordion to LI et al. (2020, p. 10), sustainable construction concept offered by the company gives long-term economic feasibility, high-quality product, eco-friendly production. Here, the taken two journals compare and contrast have been made to identify the risks a bridge project may face.

The selected first journal is "Study on Risk Assessment of Bridge Construction Based on AHP-GST Method" by Huang et al. (2018, p. 7), published 2018. According to Huang et al. (2018, 5), the association of identified risk factors is with the complexity of the project's geographical location, the 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 the protection coverage from any damages. Risk management focuses on Superstructure, Economic constructability, and safety while building a bridge. The construction cost must meet the cost of the resource and labor. The extended construction period plays a crucial role as if the construction period is, the relative cost of construction will increase. Natural calamities like floods and typhoons are significant risk factors in the building. 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 serves as the strength to be the guiding factor of many scholars experts in this field. The weakness of the journal is less recommendation in dealing with the adjoining risk of the project.

The selected second journal is "Information Management Strategy of Bridge Construction Technology Based on Big" by Meng (2021, p. 20). In comparison 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, issues in the water supply, using new technological assistances can create the problem, construction machinery failure, power failure can delay the finishing schedule of the project, there can be a mechanical collision and damaging in the construction site, most important climate factors like storms, fires can damage the project. In some cases, even such hazards are caused by human errors, but other such hazards are caused by natural elements. The purpose of this is not to go into a detailed study of the dangers that the state has to deal with and how it can be better prepared for a disaster, but rather to present some common hazard issues that may jeopardize an organization's ability to operate with minimal disruption and to mitigate damage in an emergency. The strength of the journal is the research data, the numerical statistics of the risks associated with the project. The weakness of the journal is not sufficient fundamental information of the risk factors given.

3.1.2 RISK ANALYSIS AND EVALUATION

The risks must be identified and taken into consideration when planning the project. A risk assessment or evaluation process has several factors, such as analyzing 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. Analyzing the risk factor helps to cope with the many possible risks. It provides the ground to recheck the company's risk management strategies. Intuitionistic fuzzy set theory (FTA) may be used to assess system reliability when failure data for system components is missing or inadequate. Using IFS theory and expert judgement, the framework was able to gather information about unknown failures. A temporal fault tree with TIFN-representated failure data for system components uses intuitionistic fuzzy operators to characterise the logic gates. IFSs are distinct from standard fuzzy sets in that they distinguish between evidence supporting an element's inclusion and evidence against it. It has been shown numerically that the suggested framework is effective. Intuitionistic fuzzy TFT analysis is a valuable tool for dynamic reliability assessment when the failure data cannot be represented with high certainty, according to the tests.

The selected journal is "Safety risk Assessment for Construction of Highway on Plateau Mountainous" by Tian et al. (2021, p. 14); the risk analysis is index form. The comprehensive analysis evaluated disaster risk in the journal, including manage risk, economic trouble, social risk, disaster risk, and topographical risk of the project. The implied risk matrix method is to get the idea of the importance of the risk. The used risk columns analyze risk influence and 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 in avoiding the risk of the project. The selected second journal, "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 the safety risk event in the construction process. Safety risk 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), the company has undertaken the survey process, which is dynamic. The survey analyzes the source of the risk factor; the company evaluates the risk with scientific calculation to get accurate and specific results to identify the basis of the risk. The total systematic analysis of the risk factors is the strength of the journal. The weakness of the journal is not sufficient recommendation or the alternator plan to execute the project. [Refer to Appendix B]

4. Risks

Table 1-Risks

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 maintained correctly.

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

Lack of skills in team members may lead to failure of the project.

Low

4

Performance risk

Performance risk may lead to excess financial challenges (Chapman 2016)

Medium

6

Market risk

Credit, liquidity as well as 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

RECOMMENDATION

By focusing on ERM, IT, and competitive advantage, current study provides a first empirical step toward deeper understanding of control systems and risk management. There are a slew of implications to be drawn from this investigation. Although earlier research only investigated its use as a dummy variable or its implementation via a simple inquiry [80,103,124,124], this study assessed all eight components of ERM in order to evaluate it. Because it examined ERM's components and competitive advantage as a whole, this research added to our knowledge of its total impact. There has been no study done on ERM in Iranian companies to the knowledge of the researcher. It is hoped that the findings of this research would help to improve the ERM situation in Iran and other developing nations, particularly in the Middle East. Additionally, this research sheds light on ERM's global idea and execution. Iran was included in this study, which broadened the applicability of earlier research to the Middle Eastern country. In addition, the research framework and methods of this study were expanded in a variety of ways. In the first place, this research went beyond prior ERM studies in that it evaluated each of the eight components of ERM independently to provide a more complete picture of ERM in Iranian financial institutions. First and foremost to our knowledge, this study extends earlier models of ERM by taking into account competitive advantage as a company value element that was not previously tested empirically in previous frameworks. A third emphasis of this research was on the link between ERM and competitive advantage and the moderating function of IT as the primary intangible asset of today. An investigation into how IT might enhance the impact of ERM on a company's competitive advantage had not been done to date, as far as the researcher was aware. To the best of the researcher's knowledge, this is the first study to use three economic phenomena: enterprise resource management, information technology, and competitive advantage. A strong risk management system is increasingly in demand in today's business transactions and economy due to the complexity of the current environment and its changes. In light of the fact that financial institutions play an essential role in sustaining and enhancing economic development, risk management in such organisations has a significant impact on their performance and the general economy of the country. There is fierce rivalry among Iranian financial institutions; the ones who can effectively handle and overcome their problems and dangers are more likely to be successful. According to the conclusions of this research, ERM and IT have a significant role in enhancing competitive advantage. A better global and market position may be a consequence of firms and managers increasing and improving their risk management system and IT skills. In addition, the insights help managers better understand how the ERM system may be improved by promoting IT and all of its facets. Based on the empirical data that IT is a major success element in ERM practise, new tactics will be developed. Even more significant is the fact that this research can serve as a useful tool for financial regulators in Iran, as well as policymakers and planners, to emphasise the importance of designing sophisticated ERMs in order for organisations to cope with a rapidly changing global economy, rapid technological changes and deregulation. This research might serve as a standard for academics and non-academics alike in the fields of enterprise resource planning (ERM), information technology (IT), and competitive advantage. It's important to keep this study's shortcomings in mind when we do further research. In the first place, the applicability of the findings is limited. Even though the companies chosen for this study were financial institutions, their characteristics, rules, and procedures may not be representative of all businesses in all sectors. As the research was done in Iran, there is a chance that the results may vary in other nations. In addition, the analysis only included financial firms that have adopted ERM. As a result, the study's limitations may lead to new research endeavours. First, more research is needed concerning the nature and significance of ERM in developing nations. ERM's notion and its place in the context of models, frameworks, and theories should be re-evaluated for future study. Moderation and mediation variables may be used to different aspects of an organisation (e.g., organisational culture, training, auditing system and etc.). According to past research, only financial institutions that have adopted ERM were used in the present study.

SWOT: It is the tool that analysis the strength, weaknesses, opportunities, threats to identify the risk factor. As per the view of Bredesen et al. (2017), tells to implement the tool to determine the strength factor of the project. Simultaneously after getting the strength factors of the company, weakness automatically comes up in the critical evaluation. The flaw exposes the company's work to get effective results. The environment where the project is lacking, or some missing factors can be detrimental to the execution of the project. The analysis gives the platform for the adverse risks (Chapman 2016). Opportunities are considered positive risks, and threats are considered negative risks. The classification of findings of the SWOT in a four-squid grid. Laing O'Rourke has studied the four-squid grid before planning the project. The company mainly focuses on the strength to overcome their weakness.

Risk assessment: A new tool 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 the business of the company. Zhang and Song (2020, p. 5) further mentioned that these factors are correlated to and influenced by each other. The risk management team evaluates the risk factor to find out preventive measures of 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 tactics strategic plans to analyze the nature of risk and act accordingly.

Figure 3-A risk maturity model

(Source: Huemann 2016)

The above figure pointed out the risk management process through the risk maturity model systematically (Huemann 2016). First, identifying risk factors should be done; secondly, proper analysis and risk assessment are essential to get the result. Thirdly, controlling risk should be c, and lastly, the review articulates and describes the whole process 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

though IT and Aritficial integellince nba dmachine elarning..

SWOT to gain the best result.

CONCLUSION

The Australian construction-based company Laing O'Rourke has undertaken Darlington Bridge Upgrade Project. This report seriously evaluates the risk factor compared with the other journals. The identification of predominating risks is in the evaluation process. The risk assessment identifies the nature and source of trouble. Still, in the conclusion process, one needs to consider that risk management is ongoing. Solving risks is not possible within a stipulated time or one time period. Risk management is also the crisis management of the project. The calculations, matrix, data give an overview of the ongoing risk factors. The company takes the help of scientific invention to mitigate the risk factor and become specific in their approach. 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, Robert J, 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., Viewed 1 March 2022,<https://www.mdpi.com/2073-8994/10/2/46>.

Hillson, D 2009, Managing Risk In Projects, Gower, Farnham. [Pp. 44-46]

Huang, R, Peng, K & Zhou, W 2018, 'Study On Risk Assessment Of Bridge Construction Based On Ahp-Gst Method', IOP Conference Series. Earth And Environmental Science, 189(4),.

Huemann, M, 2016, Auditing Projects And Programs, In JR Turner (Ed.), Gower Handbook Of Project Management, 5th Edn, Routledge, New York Ch 6.

Huymajer, M, Woegerbauer, M, Winkler, L, Mazak-Huemer, A & Biedermann, H 2022. 'An Interdisciplinary Systematic Review On Sustainability In Tunneling—Bibliometrics, Challenges, And Solutions'. Sustainability, 14(4), Pp. 2275. Viewed 1 March 2022,< https://www.mdpi.com /2071-1050/14/4/2275/htm>.

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, Qleij, Tian, Wyany, 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),.

Picone, D, Tucker-Evans, M & Roberts, D 2015, Lady Cilento Children's Hospital Review Operational and building commissioning, Queensland Health, Viewed 1 March 2022,

< https://www.health.qld.gov.au/__data/assets/pdf_file/0023/443912/final-report-lcch-commissioning-review.pdf>.

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Vladimirova, I, Zemskov, P & Tsygankova, A 2018, 'Model of risk management of construction project based on transaction costs'. In MATEC Web of Conferences (Vol. 193, p. 05025). EDP Sciences. Viewed 1 March 2022,<www.matec-conferences.org/articles/matecconf/abs/ 2018/52/matecconf_esci2018_05025/matecconf_esci2018_05025.html>.

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),.

Wang, K Lu C, & Li, Q 2021, Study On Identifying Significant Risk Sources During Bridge Construction Based On Grey Entropy Correlation Analysis Method. Mathematical Problems In Engineering, 2021. Viewed 1 March 2022,< https://www.hindawi.com/journals/mpe/ 2021/6618039/>.

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),.

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