Risk Governance and Control: Financial Markets & Institutions/ Volume 7, Issue 4, Fall 2017, Continued - 1

PROJECT RISK MANAGEMENT:

A REVIEW OF AN INSTITUTIONAL
PROJECT LIFE CYCLE
Wanjiru Gachie *
* University of KwaZulu-Natal, South Africa

Abstract
How to cite this paper: This article is a desktop analysis of project risk management
Gachie, W. (2017). Project risk
management:
involving a project management institutional restructuring. The
A review of an institutional project life pragmatic nature of this research allows for the literature review
cycle. Risk Governance and and the document analysis to be integrated and presented as both a
Control: Financial Markets & Institutions,
descriptive and analytical research. The analysis demonstrates that
7(4-1), 163-173.
http://doi.org/10.22495/rgc7i4c1art8 the project committee did not proactively manage project risk. The
restructuring was a change management project, entailing the
Copyright © 2017 The Authors implementation of many organisational changes, such as
This work is licensed under the Creative restructuring, lay-off of some part of the administrative workforce,
Commons Attribution-NonCommercial adoption of new technology, provision of new approaches to well-
4.0 International License (CC BY-NC established procedures, and implementation of new performance
4.0).
initiative, the process which should have been managed with an
http://creativecommons.org/licenses/b
y-nc/4.0/ effective integrated risk strategy and plan. Analysis of the
restructuring project risk management exhibits little evidence of a
ISSN Online: 2077-4303 systematic (computer based or manual) record that should have
ISSN Print: 2077-429X
provided policies, procedures, and structures for managing risk.
Received: 30.04.2017 The article concludes that the restructuring risk process was
Accepted: 16.10.2017 inadequate and it could not have ensured a successful project. An
JEL Classification: G34, L81
analysis of the restructuring project risk monitoring and control
DOI: 10.22495/rgc7i4c1art8 exhibits a reactive rather than proactive application of risk
management procedures. The analysis further indicates that the
committee failed to make use of the various project risk
management processes, standards, and guidelines. Based on the
conclusions, the article recommends that project risk planning,
strategy, control, and monitoring should be put in place for future
institutional projects. The project management team should also
put in place procedures for primary stakeholders engagements,
identify and address their nature of interest and power in future
risk management projects.

Keywords: Project Management, Risk, Risk Management, Project

Lifecycle, Restructuring, Project Success, Project Failure, Risk
Standards and Guidelines, Risk Factors

1. INTRODUCTION Job redefinition in terms of separation

functions and the implementation of performance
This is article is a pragmatic desktop analysis of management system;
institutional risk project management as a The introduction of a comprehensive integrated
requirement of institutional social transformation Management of Information System.
and governance for the effective and efficient This article is an analysis of the root causes of
performance. The restructuring project had a major poor perception of an institutional restructuring
responsibility that aimed at bringing institutional project from the perspective of what happened,
transformation in key functions, activities, and what could have happened and what should happen
systems. The restructuring project addressed the in the future with special reference to the
following key issues: management of project risk. The restructuring
Reorganisation and restructuring in order to project was a form of change management, which
disengage from non-strategic to strategic value- entailed the implementation of various
adding activities with special reference on the organisational changes such as, restructuring,
institutional core competences; adoption of new technology, lay-off of some part of

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the administrative workforce, provision of new How was the concept of risk addressed in the course
approaches to well-established procedures, and of the institutional project life cycle?
implementation of new performance initiative, the
process of which should have been managed with an 3. PROBLEM STATEMENT
effective integrated risk plan and strategy.
The main purpose of the restructuring project This article examines risks management associated
was to improve and enhance efficiency and with an institutional project management cycle. A
effectiveness and consolidate progress five years review of the institution shows the presence of a
post-merger. The impetus to undertake the risk framework - Enterprise Risk Management.
restructuring was to “simplify and streamline for However further analysis indicates that the
success” the operations for the implementation of restructuring project did not observe the process of
core institutional mandates. The purpose was, risk management. Therefore, this article provides an
therefore, consistent with the objectives of analysis of what should have been undertaken and
undertaking a reorganizational project as identified what should be done in the future management of
in the literature. In spite of the some of the risk project. There are three levels of risk
efficiencies gained, the restructuring project did not management within the institution, specifically:
achieve its main objectives successfully. Analysis of 1) Strategic- that relates to long term
the project life cycle showed that the restructuring institutional issues (<=6 years).
did not adhere to the systematic nature of project 2) Tactical - that relates to medium term
management, contributing to poor risk institutional issues (>6 years).
identification, analysis, evaluation, and treatment, 3) Operational - that relates to short term
thereby hindering project integration. Too many institutional issues (>3 years or month to month).
changes were introduced over a short period. This article, therefore, analyses the institutional
The risk from this study is viewed as an risk management with special reference to the
uncertainty that affects the institution economically, restructuring project that had an impact on all the
sustainably and socially (Kerzner 2006, p. 711). above three levels of the project.
Therefore, prudent risk and uncertainty
management is the key to successful project 3.1. Significance of risk management
management (Chapman a Ward 2004, p. 858). The
ever-changing conditions of the marketplace have The overall motivation and goals of this desktop
borne a witness of the demise of a multitude of research are to highlight the importance of
business and few remaining organisations have integrating risk management into the overall project
escaped the necessity for restructuring. life cycle (Nuseibah, Quester, & Wolff, 2016:231). Lai
Acquisitions, buyouts, and downsizing have become (2011:2) refers to the motivation of a research as the
common occurrences in the last decade, which fundamental reason that provides the purpose of
include restructuring. The effectiveness of the the research. This research:
restructuring efforts is largely determined by the is an illumination of the importance of
ability to manage risk proactively. The proactive integrating risk management plan and strategy into
management of risk during the entire project cycle the entire project management cycle to the
reveals trends and performance so that early institution’s primary stakeholders (project members,
remedial actions are implemented. Therefore, an employees, and trade unions to name a few);
orderly and systematic risk project management is provides vital review of the literature on risk
vital in the course of the entire restructuring project. management, which is, thereafter, used to inform
The article commences with the focus question the risk management process;
that drives this study, followed by the problem provides a contribution to academic literature
statement and the significance of undertaking risk in an effort to address risk management challenges
management analysis and review. The paper then that institutions face in the process achieving long-
presents the research design, namely the desktop term post restructuring objectives;
analysis of the institutional restructuring project, a demonstrates the close relationship between
case study undertaken in the context of change academic research and professional practice in the
management. Limitations, that could possibly area of risk project management;
threaten the study, were identified and proactively serves a useful purpose, as lessons learnt for
managed. Due to the pragmatic nature of the study, future institutional project management.
the literature review has been presented in such a
way that it mirrors the actual restructuring events
4. RESEARCH DESIGN
that have occurred.
To address the research question, this research
2. FOCUS QUESTION undertook a desktop analysis of the project risk
management of an institutional project cycle. This
The primary objective of this desktop research is to research shows that the institutional restructuring
examine the construct of risk management within an fulfils important characteristics that are essential to
institutional project life cycle. Saunders, Lewis, and qualify as a project. According to Fraser (2011:27) a
Thornhill (2012:680) define a research question as case study as a discipline is not restricted to a
the primary enquiry that will drive the study and particular industry. The research was undertaken in
which the researcher seeks to address or answer. the context of change management and the case
The research question is viewed as the forerunner of study conforms to the generally accepted definition
the research objective. The focus question driving of a project as “a unique temporary undertaking
this research is: with a definite start and finish” Project Management
Institute-PMI 2008:4; Turner 2009:6; Fraser 2011:28).

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The research adopts a pragmatic approach to data Managing risk is an essential component in
analysis because the research is interested in the managing the complexity associated with project
practicality of management risk in organisations. restructuring for “value creation” (Turner, Anbari, &
According to Creswell (2014), a paradigm or a Bredillet, 2013:14; Mir and Pinnington 2014:208).
worldview can be regarded as a set of opinions, Value can be sustained during the project cycle by a
philosophies, and beliefs that act as a guide to series of stakeholders’ engagements that will satisfy
researcher’s activities. Saunders, et al. (2012:667) their needs through voluntary agreements (Ketokivi
perceive philosophical worldviews as a paradigm, & Mahoney, 2016:132; Gachie & Govender,
which assists in scrutinizing phenomena under 2017:124A).
research. A research design provides with the Therefore, Risk the PMI (2008:237) proposes
strategic plan for undertaking the research (Babbie, that the project objectives should be stated in terms
Mouton, Vosrter, & Prozesky 2001:74; Kothari of the impact and probability of decreasing the
2004:2). The research undertakes a desktop analysis probability and impact of events adverse to the
to gather and provide an article on project risk project and simultaneously increasing positive
management. This research employed both a events and outcomes.
descriptive and analystical data analysis to gain and According to Hillson (2009:6) uncertainty and
provide an accurate profile of an institutional risk risk are not synonyms. This is because risk deals
management. Kothari (2004:2) and Sekaran & Bougie with how uncertainty will influence the institutional
(2013:393) describe a descriptive research as one performance and, in terms of sustainability, social
that describes the variables and used in the responsibility, and most importantly, in economic
identification of the occurrence of the phenomenon material form (Kerzner 2006:710; Kerzner 2006:231;
under study. Handfield, Monczka, Giunipero, Patterson 2011:375).
Having been provided with the introduction, The restructuring project thus was exposed to a
the focus question significance of the research, the ‘double risk’ factor, namely managing sustainability
problem statement, and the research design, the risks associated with internal stakeholders
next section examines the concept of risk and risk productivity and vulnerabilities associated with the
management. unexpected (Le Grange 2003;(Gachie & Govender,
2017B:12).
5. LITERATURE REVIEW Traditionally risk has been viewed as
“uncertainty that matters” (Hillson, 2009:6).
This section briefly explores the concept of project However, this article contends that risk is
risk and the factors that constitute viewing a project multifaceted [positive and negative effects] and ever
as risky. However, due to the pragmatic nature of evolving. The institutional project leaderships
this study, further exploration of the literature has should have engaged in risk management activities
been interwoven with the results and discussion. for compensating for the inherent uncertainty
The objective is to avoid the duplication of during project management cycle. The International
information because the literature review has been Organization for Standard ISO-DIS 31000 (2009:1)
utilised as a ‘reference dictionary’ during the describes risk as “effect of uncertainty on
analysis and presentation of the results and objectives” while the Australian and New Zealand
discussion. In so doing, readability and Standard ASNZS (4360:2009) define risk, as “the
comprehension of the study have been enhanced. chance of something happening that will have an
impact on objectives.” This article defines risk as the
5.1. Definition of risk and risk management possibility that an event will occur, which will
benefit or adversely affect the attainment of the
The Turnbull (1999), the APM- Association for restructuring objectives. Having defined risk, the
Project Management (2006), the PMI- Project article undertakes a brief discussion of the concept
Management Institute (2008); the Australian New of risk management.
Zealand Standard AS/NZS 4360:2009; and Larson Kerzner (2010:711) and the PMI (2004:237)
and Gray (2011:211) define project risk as describe risk management as the practice of and the
“… an uncertain event or condition that, if it act of dealing with risk, which includes risk
occurs, has an [positive or negative] effect on at least one planning, risk assessing [identification and analysis],
project objective.” management of issues of risk, implementing risk
Scholars Dallas (2006:34); Hillson (2006:184); management strategies and risk control and
Larson & Gray (2011:211) Calabrese, (2016:12) monitoring. The AS&NZS 2004 defines the risk
concur this definition of risk, which is viewed as management process as:
offering a double benefit in terms of opportunity “The systematic application of management
and threat within a single project. According to policies, procedures, and practices to the tasks of
Hillson, (2006:185) defining risk from the reviewing communicating, establishing the context,
perspective of opportunity and threat offers a identifying, analysing, evaluating, treating, monitoring
and communication risk” (AS/NZS 2004. p. 4).
significant implication for risk management within
Project risk management demonstrates the
the project cycle. An opportunity is an event that
value of proactive planning for projects as a way to
can have a positive impact on project objectives
anticipate and mitigate serious issues that could
(Larson & Gray, 2011:227). The PMI (2008:28-32)
adversely affect the project during and at some
identifies four different types of response to an
point in the future (Atto 1997:4; Williams 1995:23;
opportunity namely, exploit, share, enhance, or
Pinto 2007:237; Mir and Pinnington 2014:204). Risk
accept. Furthermore, Dallas (2006:66) perceives risk
management process will, therefore, require the
as the flipside of value, implying that risk and value
project members to become the devil’s advocates
management are two interrelated concepts that
during the entire project cycle, because in the
should be undertaken as paralleling in a project.
wording of the old age “an ounce of prevention is

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worth a pound of cure.” Having provided a brief 2000). The concept of freezing and unfreezing was
discussion of the concept of risk and risk not considered during the project cycle. Change
management, the article examines the factors that management is critical from planning, controlling,
made the institutional project management risky. reporting and recording changes during the project
cycle (Larson and Gray, 2011:230).
5.2. Factors that made the institutional project
management risky 6. RESULTS AND DISCUSSION

The restructuring project faced both individual risk The results and discussion are presented in a format
(probability that an event or condition occurs) and that seeks to address the research focus questions,
the overall project risks (a sum of the individual in so doing, the attempt is made to provide a
risks) (Ozguler & Yilmaz, 2016:237). Factors that complete picture of risk management from
made the restructuring project inherently risky in conceptual to project closure. The results and
terms of individual and overall project risks include: discussion are also conducted in such a way as to
complexity that ranged from human interfaces, provide a mirror reflection that seeks to determine
management of various differing restructuring sub- the extent to which the restructuring project
projects, relational and technical issues brought in adhered to generally accepted project management
risk into the restructuring. Managing risk project in standard and principles.
a large, complex institution it may be prudent to Mapping risk guidelines and standards onto the
repeat the risk identification, assessment, restructuring project
monitoring and control during the entire project Figure 1 adapted from AS/NZS (4360:2009:11
cycle (Larson & Gray, 2011:230; Ozguler & Yilmaz, and Dallas (2006:149) provides a framework
2016:237); consisting of major components of the risk
uniqueness even though the institution had management process that has been analysed in this
undertaken a merger previously (five years ago), the study.
restructuring project was a relatively new and Figure 1 shows that the risk management
unfamiliar undertaking; process commences with the identification of the
assumptions and constraints entails guesses of risk context, followed by risk planning, risk
what will or not happen (assumptions) in the future assessment, risk analysis, risk evaluation, risk
and constraints (things not to be done), carrying a treatment and finally risk monitoring and control.
hidden undisclosed risk; The use and application of a formal project
stakeholders and people the unpredictability of management processes will ensure that the
project provided an opportunity for risk to creep institution delivers valuable projects on a consistent
into the project. The project management team did basis (Kohlbacher & Gruenwald, 2011:6; Calabrese,
not constitute those with experienced project 2016:8; Gardiner, 2016:75). The PMI (2008:60)
management skills, thereby introducing risk and proposes six risk processes, integrated into a
uncertainty. Trade Unions and employees also project, that ensure risk management. The
imposed requirements and conflict leading to the integration of various project components should
poor restructuring project acceptance. The improve the entire project over the long haul (Larson
institutional project faced the resistance of buy-in and Gray, 2011:13: Chapman & Ward, 2004:855;
from internal stakeholders. Some of the perceived Gardiner, 2016:72). Table 1 proposes a more
benefits of risk management have to do with the detailed risk management process, which should
undertaking of a cost-benefit analysis for project have acted as the foundation for analysing the
risk management. Awareness of perceived benefits restructuring project risk management. The
of risk management should have helped the development of awareness of these risk standards
committee to sell and encourage the internal and guidelines would have positively influenced the
stakeholders to invest and support the restructuring restructuring project.
project vision, mission, and critical success factors; Figure 2 depicts the major components
resistance to change the revolutionary nature proposed for the management of risk adapted from
of restructuring project from the stable known state Hillson (2009:28). Figure 2 should have been utilised
to the unknown unfamiliar unstable future brought as a formal risk response implementation.
in the element of risk and uncertainty (Oakland

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Figure 1. Proposed framework for the implementation of the institutional risk management

Institutional Risk context

What is the Analyze the project to identify risk sources decision-
risk about? In making through a flatter competency based structure.
addition, why? (project deliverables should be well defined)

Institutional Risk planning

In this project should have entailed deciding how to
approach, conduct and manage risk activities (should
Primary risk analysis
What, where Proposed
are the risks? have produced project risk plan and strategies,
proactively mitigate project risks) institutional Risk
identification
strategies
What is known
about the  Maintain MIS
Institutional Risk assessment
risk? database
For the project, committee should have entailed:
1. Identification of risk sources
2. Identification of risks as they arise.
3. Group and associate risks
4. Prioritize and organize  Communicate
and illuminate
How
important is
the risks? Institutional Risk analysis
Should have entailed grouping and analyzing risk by  Monitor and
severity of impact, likelihood and controllability control risk
(Analyse using quantitative and qualitative techniques process
clarify ownership and responsibility)

 Review
What is at risk
Institutional Risk evaluation will entail: decision,
and why?
1. Set criteria for risk evaluation objectives, and
2. Decide on the ranking criteria assumption
Secondary risk analysis

3. Select priorities

What should
be done about Institutional Risk treatment should have entailed: 
risk? 1. Identify and evaluate options
2. Develop strategic measures
3. Develop contingencies
4. Allocating responsibilities
5. Implement risk strategy and treatment

Institutional Risk monitoring and control

Should have entailed keeping track of progress in
resolving the identified risks, monitor and adjust

Source: created and proposed by the researcher

Table 1. Proposed mapping risk process onto the restructuring project

Description of process Proposed to the restructuring project

Should have involved:
Risk process initiation- involves getting started, Risk definition in terms of objectives, scope and other practical parameters of
namely deciding what is to be achieved the restructuring risk management process.
Risk management planning- RMP – involves Making decisions on risk approach, planning, and risk execution management
getting started on the plan namely, decide risk activities for the restructuring project. Definition of the RMP parameters,
approach. standards and guidelines.
Risk identification- involves the search for risks Identifying and determining the specific risk factors that are expected to affect
in order to determine which risks might affect the project. The committee should have analysed the project to identify sources
the project. of the risk.
Quantitative risk analysis- entails numerical Qualitatively determining the potential impact of the risk factors and their
analysis of the effect of the identified risks. likelihood to occur. Evaluating the key characteristics of individual risks, thus
Qualitative risk analysis. –involves Setting recognising risk patterns of exposure and prioritising risk for further action.
priorities of the risks for subsequent further Further statistical determination of the potential impact of risk factors and
analysis or action. assessment of overall project risk exposure.
Risk response planning and implementation Developing options and actions to enhance opportunities and reduce threats to
involve making decisions on what to do, the restructuring objectives. Also determining appropriate response strategy
analysis to action the development of options and actions for each individual and overall risk.
and actions in order to enhance opportunities Risk response implementation of the agreed plans and determine the effect of
and reduce threats to project objectives. the strategy and any resultant secondary risks.

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Description of process Proposed to the restructuring project

Risk monitoring and control - involves keeping Track identified risk, monitor residual risk, identify new risk, execute risk
up-to-date. That is achieved by tracking, response plans, evaluate effectiveness, and create a knowledge base for the
identifying risks and monitoring any residual future institutional projects lesson learned.
ones.
Some guidelines such as (Committee of - The use of formal and informal information policy should be implemented
sponsoring organisation (COSO) 1992) as defining key components of performance management information system
including Risk Communication – involve (PMIS) for risk communication
telling others, who needs to know. This is - “Computer produced the report” is not positive evidence that the data is
achieved by providing information to the right valid and reliable.
people at the right time; precedes monitoring, - Risk communications should flow in the hierarchy, across functions or down
control, and serves to inform relevant through all layers of management and responsibility.
stakeholders about the current level of risk and - External communication through periodic compliance and performance
implications. reports to internal and external concerned stakeholders for decision-making.
Risk review and post-project review which - Risk review should have served the purpose of review of changes in
involves capturing lessons both negative and identified risks and overall project risk exposure on the RMP.
positive for future projects - Post-project review to serve in the identification of risk-related lessons
learnt for future institutional projects.
(Source: created by the author for this project)

Figure 2. Proposed generic risk management process (Source: Hillson 2009:28)

RISK PROCESS INITIATION

RISK IDENTIFICATION

QUALITATIVE RISK ASSESMENT

[optional]

RISK RESPONSE PLANNING

RISK RESPONSE IMPLEMENTATION

RISK REVIEW
[Repeat throughout the project]
RISK COMMUNICATION

POST-PROJECT RISK

7. PROPOSED STANDARDS AND GUIDELINES FOR 1. Establishment of a formal board to account for
THE RESTRUCTURING PROJECT RISK risks.
2. Developing an institutional framework for
MANAGEMENT
Enterprise risk management (ERM)
3. Establishing a structured risk assessment
The following standards and guidelines should be
process
considered in the restructuring of the future project
4. Developing a risk based control environment.
risk management. These proposed standards and
5. Establishing risk monitoring and control systems
guidelines should inform future institutional
6. Embedding the process of ERM into the
projects.
institutional overall strategy.
1) The South African King II III and IV reports are
7. Establishing risk assurance processes.
corporate governance guidelines for South Africa
8. Incorporating risk related aspects into the
organisations that propose that organisational
integrated sustainability reporting.
strategy, risk, and opportunity are inseparable
2) British standards such as BS 6079, which is
elements. The King IV (2016) adopts the ‘comply or
applicable to the of risks management process in
explain’ principles with regard to applicable laws
projects. BS 6079 standard identifies and provides a
and regulations. King IV (2016) further recommends
framework for a healthy risk management culture.
that an organizational board should maintain a
3) Sarbanes-Oxley Approach –which proposes
sound system for risk monitoring, development, and
‘comply or else, is ‘one size fits all’ framework that
management of control objectives and priorities
cannot logically be suitable in South African context
(King IV 2016). This article, therefore, proposes the
because the scales of business carried out by
following essential steps that should have been
organisations vary to such a large degree and bring
integrated within the institutional project risk
along a high cost of compliance from the time of
management process:
inception in 2002.

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4) Turn-bull U.K report (1999) is a standard for all the restructuring project committee should have
good corporate governance across private and public created a simple checklist to follow for risk
sectors in U.K that recommends that all businesses management. This article contends that risk
should put in place a robust risk management management process is important but not
process. sufficient. Other factors and integration issues are
5) European Association for Project Management, important in the RMP. Combining two or more
which is a form of PRAM - Project Risk Analysis processes within a single study is logical and it
Management that is a generic methodology for risk offers practical value for effective and efficient risk
management. PRAM presents a logical and management.
systematic alternative in place of ad hoc approach to The guidelines and standards offer conflicting
risk analysis. Key aspects of PRAM are: risk management approach. Some of guidelines and
- Recognise that risk management has its own life standards offer traditional while others offer
cycle separate from project cycle. contemporary risk management approach. On the
- Apply different risk strategies at various points one hand, some standards apply the traditional risk
in the project’s life cycle. process namely the waterfall ‘metaphor’ model
- Integrate multiple methodologies for managing where a project life cycle is divided into distinct
risk in a coherent, systematic approach, rather than phases (Larson & Gray, 2011:598). On the other
use “pick and choose” approach. hand, contemporary risk management provides
Some of the shortcoming of some of the risk smaller elements ‘chunks’ building up to the
standards and guidelines aforementioned include: delivery of the whole project. The article is
The absence of providing a step for capturing concerned whether evolutionary development,
lessons learnt. Some guidelines have briefly rather than the waterfall model, is more successful
included the need to capture lessons, as a small (Larson & Gray, 2011:587). According to Kerzner
part of a wider ‘Monitoring and Review’ step. (2006:709), risk management within a project is
Hillson (2009:28) states a wider malaise: the determined as a disciplined, continuous process of
reluctance of many organisations [such as the planning, assessment [identifying and analysis],
restructuring] to undertake a post-project review or handling, controlling, and monitoring. As a result,
[risk] lesson learnt at the end of the [restructuring] the system integrates other risk processes
project (or at significant intermediate milestones). planning, costing, budgeting, controlling
The effort to perform such a review is too much for monitoring, quality, and scheduling. Providing a
the already disbanded restructuring committee, sample of proposed project management guidelines
despite the obvious benefits that can accrue. this article attempts to integrate these standards
The guidelines and standards failed to and guidelines for simple application in future
acknowledge that risk management is more than a institutional projects (see Table 2, adapted from
process. Hillson (2009, 70) notes that it is a Hillson 2009:29). Table 2 compares previously
common myth for organizations to think that risk proposed risk management standards and
management is just a process, an impression guidelines and maps them into a single generic
reinforced by most risk guidelines and standard. integrated framework for risk management
The lack of attitude towards risk management as process.
more than a process has resulted to the notion that

Table 2. Proposed mapping of generic risk management process

AS&NZS
PMBOK - PMI
APM Body 4360:2009 Risk BS31100:20
Informal chapter 11 Risk
Formal knowledge Management Management 11Risk
step of Project Management
process of Project Risk (also ISO& DIS of Risk by Manage-
the 4360:2008M Standard by
the step Management 31000 Risk OGC (M_O_R) ment- Code
process anagement IPM
and analysis Principles and of Practice
of Risk
Guidelines
Initiation of [strategic
Planning risk Establishment of Identification Context of
Starting risk Initiating organisation
management the context context Risk
response objective]
Identification
Risk Identifica- Identification Identification of Identification Identificatio
Identification of Risk and
search tion of Risk of Risks Risk of Risks n of Risk
description
Performing
Qualitative
Quantitative
Priorities risk analysis analysis of Risk Risk Assessment
assessment Assessment Assessment
Setting Performing evaluation of Risk estimation of Risk
of risk
Quantitative
risk analysis
Decisions Risk
Planning Planning Risk
what to planning Planning
responses responses
do response
Treatment of Response to
Risk Treatment of Risk
Risk Risk
Action response Implementatio
- Implementing
steps implementat n responses
ion
Commu- Communicat Consultation and Reporting
- communicate Risk reports
nicating ion of Risk Communication Risk
Monitor &
Control,
Up to Review of Management control risks Embedding Risk
Monitor, and
date data Risk process Control, Monitor, and review reviewing
review
and review
Post-project
- - - - -
review
(Source: adapted from Hillson 2009:29)

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8. DISCUSSION OF THE ANALYSIS OF THE Clearly defined and visible executives support
RESTRUCTURING PROJECT RISK ENVIRONMENT for the restructuring project is critical for project
success.
The restructuring project carried an inherent risk in Explicit policies must be communicated to
terms of the management of both the process and primary stakeholders.
phases and the internal stakeholder’s acceptance. Adoption of transparent activities for managing
Analysis of the restructuring project exhibits a risk is critical.
reactive risk management process and ad hoc The existence and creation of a culture that
practices, which were a little more than emergency supports and understands the importance of
fire extinguishers. Further analysis indicated that maximising value, monitoring and controlling risk
there was no formal appointment of a professional should be implemented.
project leader. Therefore, there was a lack of an Fully embedding management processes to the
appropriate project leader in terms of competencies institutional objectives is vital.
to handle the complex activities required during the Implementation of effective plans and regular
restructuring. Internal institutional executives acted reviews should be undertaken to ensure that the
as the project leaders and team. benefits of the risk management processes are
Change management is a major element of the realised and lessons learnt implemented for future
risk control process (Larson and Gray, 2011:230). projects.
The restructuring project was analysed within the Policy for managing risk should be developed
concept of change management. The analysis and implemented in order to achieve strategic and
showed that unmanaged change took place during operational objectives aligned with the institutional
the restructuring process, thereby, exhibiting a high vision, mission and strategies. Policy documents
risk in contrast to implementing a formal change should serve to provide clear guidelines on risks
management process. This article, therefore, management (Turner, 2009:7; Fraser, 2011:28;
proposes that the institution should have Turner, Anbari, & Bredillet, 2013:11). A key for
undertaken a proactive approach to the controlling the costs, associated with a project,
identification and handling of risks and involves documenting responsibility (Calabrese,
uncertainties. Scholars such as Jaafari (2004; 2016).
2004:301); Simister (2004:42); Chapman and Ward Training on risk management should be an
(2004:858) and Gardiner (2016:72) posit that integral part of the entire project management cycle.
uncertainty and prudent risk management should be According to Dallas (2006:80), training is the first
the key to a successful project management. The strand of an effective risk plan.
illegal strikes that followed the restructuring project Change management should be incorporated
are the indication of poorly implemented change into the future project cycle proactively in order to
management. manage risk. Change and risk are closely associated
The institutional project committee should (Chambers & Rand, 2010:497). Project leaders should
have prepared contingency strategies to be used as establish a conducive environment in which the
opportunities, rather than undertaking reactive project stakeholders are comfortable to raise issues
management too late. According to Larson and Gray and concerns and admit mistakes (Larson and Gray,
(2011:223), a contingency plan is an alternative plan 2011:230).
for managing unforeseen risk. The contingency plan Spectrum of acceptance and stakeholder
such as a risk response matrix and prototyping will analysis is vital for the project success. Projects are
represent activities that will mitigate or reduce the subject to influences from stakeholders, whose
negative effect of the risk event (Hamilton, Byatt & pressure can generate change, increase costs, delays
Hodgkinson, 2010:1; Larson and Gray, 2011:223; and risks (Dallas 2006:91). The improved
Bosch-Sijetsema & Bosch, 2015). “Scenario planning relationship among the institutional secondary
is risk contingency planning, without really moving stakeholders such as funders, insurers, media, and
organizational resources.”(Larson and Gray, regulators should be managed proactively to reduce
2011:31). Scenario planning is a structured process adverse effects on the project.
of thinking about future possible environments that Triple bottom line philosophy, which integrates
would have a potentially high impact that could have sustainable development of pillars, namely
disrupted the institutional project Hamilton, Byatt & economic, social and environmental, should be
Hodgkinson, 2010:1; Larson and Gray, 2011:31). included in future risk management plans and
philosophy (Elkington, 1998; King IV, 2009).
Risk monitoring and control should be
8.1. Identified elements that have an effect on risk
integrated into future project cycle for proactively
project management managing risk. According to Chambers & Rand
(2010:465-469) potential for cost saving (for
Identification of critical success factors (CSFs) is vital example recycling materials and less waste) is a vital
for managing project risk. Embedding CSFs in the component of risk management. Project members
risk management framework cannot be understated. should be vigilant with respect to monitoring of
The proposed framework should link opportunities potential risks and identify new land mines that
(value) and risk management actions to the could derail a project (Larson and Gray, 2011:230).
institution’s strategic objectives in order to ensure Delivery is the second strand of the risk plan
that value and risk activities are aligned for the (Dallas, 2006:81). Delivery of risk management
successful delivery of project objectives (Ciutiene, services using tools and techniques described by the
Venckuviene, & Dadurki, 2016:49). The following PMI (2008) and other risk guidelines should be
points provide the basis for compiling the CSFs that adopted proactively. Definition of potential sources
apply specifically to the restructuring project of risk should be incorporated in a hierarchical risk
adapted from Oakland (2000:26):

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breakdown structure (RBS); perhaps drawings from 10.1. Further research

industry standard or from ‘own’ template should be
utilized. Institutional transformation through the process of
mergers and restructuring is a prominent
9. CONCLUSION characteristic of the 21-century organisations. The
South African Minister of Higher Education released
Based on the results and analysis of the research the National Plan for Higher Education in February
findings the following conclusions are drawn. 2001, which has resulted in the number of public
Enterprise risk management (ERM). The analysis higher education institutions being reduced from 36
showed that ERM adhered to the King III and IV. to 23 through the mechanism of mergers. The
However, no formal project closure took place. Risk process of restructuring has also followed these
management was not conducted as a separate mergers as the institutions struggled to adapt.
component of the entire project. The project lacked Therefore, it is essential for the risks associated with
a formal risk response and implementation plan. the project management and outcomes of these
Institutional executive support and mergers and restructuring to be evaluated on an
Organisational culture. Risk management was not ongoing basis. Therefore, there is clearly room for
implemented interactively; neither “top-down” nor research to be undertaken both, at respective
“bottom-up” approach was adopted. The institutions and on a wider scale and comparisons of
institution’s executives showed support for the outcome to be undertaken both locally and
project but did not proactively identify with the internationally.
project risks as they occurred. Therefore, a
mismatch between the primary stakeholders’ 11. RECOMMENDATIONS
expectations and the project leadership hindered the
project success. According to Kippenberger (2000:2), Based on the conclusions reached, this research
an organisational culture has a significant influence reasonably draws several recommendations aimed at
on the effectiveness of the risk management improving future institutional projects.
process. 1. In future projects, the institution should
Opportunities for managing changes were not distinguish stakeholders in terms of primary versus
formally put into consideration. The adoption of secondary stakeholders and identify, as well as
freezing and unfreezing techniques for managing address their nature of interest and power in risk
change was essential. Proactively managing change management.
in the form of affected stakeholders, namely 2. Future projects should adopt and integrate
employees and trade unions would have ensured specific solid risk management planning, monitoring
project success. The stakeholders actively tried to and control process, and strategy.
sabotage the project success. 3. Updating of the existing risk and system policies,
Poor perception and attitude towards a formal procedures, and guidelines should be conducted on
risk strategy. The institutional executives exerted a regular basis and applied in future projects.
pressures to get the project done quickly, which 4. In the context of restructuring risk, management
resulted in eliminating “unnecessary’ activities such should commence from the onslaught of the project
as documentation and proper project closure and and continually managed as an on-going integrated
setting unrealistic deadlines. The project control and iterative cycle.
then became an issue of ‘firefighting’ rather than 5. A reputable risk management process should
proactively managing and eliminating potential risk adhere to and be embedded within the institutional
threats. project management philosophy.
No contingency risk planning took place. There 6. Future projects should include initiatives of well-
was a lack of adequate attention to problems and thought out and sustainable internal change
challenges as they occurred. Contingency plans were management campaign aimed at engaging the
not in place for dealing with problems as they primary stakeholders, building relations, improving
emerged so they would not turn into big problems in communications, thereby dispelling fears and
later project phases. anxieties in order to minimise risk. Change is
inevitable in risk management. Therefore, the
10. LIMITATIONS OF STUDY adoption of a well-defined change management
process early in future project management
Limitations are those constraints that affect the planning cannot be understated.
generalizability, applications to practice or utility of 7. While it may be impractical, project managers
research findings. Limitations can also be the should touch-base with primary stakeholders on a
consequences of research design or data collection regular basis. Holding regular stakeholder meetings
methodology, which has an impact on the to review and provide an update on the status of the
interpretation of the findings (Burke, 2010:109). The project contributes positively to risk management.
desktop nature of this research can hamper 8. Establishment of an institutional ‘project office’
generalizability of the research to other institutions. is vital for sustainable risk management. The office
Nevertheless, the researcher made extensive use of will operate as a future library of case studies
project management principles, and supplemented consisting of lessons learnt, both positive and
the data by gathering information during the open negative. Formal documentation of research process
discussion forums conducted officially throughout and outcome will serve as criteria that will ensure
the project cycle, thus making the research findings future project success. Lessons learnt act as
to be adoptable, applicable and useful in other guidelines and risk analysis templates that provide a
settings that relate to project risk management. quick insight into proactive management during a
project life cycle.

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