BRIDGE INTERNATIONAL COLLEGE

Program in Master of Art in Project Management

COURSE: PROJECT RISK MANAGEMENT

INDIVIDUAL ASSIGNAMENT

NAME ID NUMBER

1. LIBEN FEYISA BIC-M0195/15

SUBMITTED TO: Gemechu Abdissa (Ph.D.)

October 08, 2023

BURAYU, OROMIA,

ETHIOPIA

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1. A company is developing a new product but is facing several potential risks. How would you identify,
assess, and mitigate these risks to ensure the project's success?

When you’re planning your project, risks are still uncertain: they haven’t happened yet. But eventually, some of
the risks that you plan for do happen, and that’s when you have to deal with them. There are four basic ways to
handle a risk.

1. Avoid: The best thing you can do with a risk is avoid it. If you can prevent it from happening, it
definitely won’t hurt your project. The easiest way to avoid this risk is to walk away from the cliff, but that
may not be an option on this project.
2. Mitigate: If you can’t avoid the risk, you can mitigate it. This means taking some sort of action that will
cause it to do as little damage to your project as possible.
3. Transfer: One effective way to deal with a risk is to pay someone else to accept it for you. The most
common way to do this is to buy insurance.
4. Accept: When you can’t avoid, mitigate, or transfer a risk, then you have to accept it. But even when you
accept a risk, at least you’ve looked at the alternatives and you know what will happen if it occurs. If you
can’t avoid the risk, and there’s nothing you can do to reduce its impact, then accepting it is your only
choice.
5. Risk Identification
A more disciplined process involves using checklists of potential risks and evaluating the likelihood that those
events might happen on the project. Some companies and industries develop risk checklists based on
experience from past projects. These checklists can be helpful to the project manager and project team in
identifying both specific risks on the checklist and expanding the thinking of the team. The past experience of
the project team, project experience within the company, and experts in the industry can be valuable resources
for identifying potential risk on a project.

6. Risk Evaluation
After the potential risks have been identified, the project team then evaluates each risk based on the probability
that a risk event will occur and the potential loss associated with it. Not all risks are equal. Some risk events are
more likely to happen than others, and the cost of a risk can vary greatly. Evaluating the risk for probability of
occurrence and the severity or the potential loss to the project is the next step in the risk management process.
7. Risk Mitigation
After the risk has been identified and evaluated, the project team develops a risk mitigation plan, which is a plan
to reduce the impact of an unexpected event. The project team mitigates risks in various ways:

 Risk avoidance
 Risk sharing
 Risk reduction
 Risk transfer

2. A construction company has won a bid to build a new bridge, but there are several uncertainties
surrounding the project. How would you develop a risk management plan to ensure the project stays
on track and within budget?

Developing a risk management plan for a construction project, especially one involving a new bridge, is crucial to ensure
its success. Here's a step-by-step approach to creating a comprehensive risk management plan:

Identify Risks:

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 a. Assemble a multidisciplinary project team that includes engineers, architects, project managers, and risk management
experts.

b. Conduct a risk identification workshop or brainstorming session with key stakeholders to identify potential risks.
Consider all aspects of the project, including technical, environmental, financial, and operational factors.

c. Categorize the risks into different types, such as design, construction, environmental, regulatory, financial, and
market-related risks.

Assess Risks:

a. Evaluate the potential impact of each identified risk on the project. This should include financial, schedule, safety,
and quality impacts.

b. Assess the likelihood or probability of each risk occurring. Use historical data, expert opinions, and industry
benchmarks to estimate probabilities.

c. Create a risk matrix to prioritize risks based on their potential impact and likelihood.

Develop Risk Mitigation Strategies:

a. Develop a risk mitigation plan for each identified risk. This plan should outline specific actions to minimize the
probability or impact of each risk.

b. Assign responsibility for each risk mitigation action to team members, ensuring accountability.

c. Create contingency plans or alternative construction approaches for high-impact, high-probability risks.

d. Develop a budget contingency to cover potential cost overruns due to identified risks.

Risk Monitoring and Management

a. Implement regular risk monitoring and reporting mechanisms to track the progress of risk mitigation efforts.

b. Establish key performance indicators (KPIs) or early warning indicators to detect potential issues or risks before they
escalate.

c. Continuously review the risk landscape and adapt to new risks that may emerge during the construction phase.

Communication and Reporting:

a. Maintain open and transparent communication with stakeholders, including the client, project team members,
subcontractors, and regulatory bodies.

b. Provide regular updates on the status of risks and risk mitigation efforts, including any changes in the risk landscape.

Documentation and Records:

a. Maintain detailed records of all risk assessments, mitigation plans, and actions taken.

b. Use a centralized system to store and manage risk-related documentation for easy access and reference.

Training and Awareness:

a. Ensure that all team members are aware of the risk management plan and their roles in implementing it.

b. Provide training and awareness programs to enhance the risk management skills of the project team.

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Continuous Improvement:.

a. Use the lessons learned from this project to inform and improve risk management practices for future construction
projects.

In summary, a well-structured risk management plan for a construction project involves systematic risk identification,
assessment, mitigation, monitoring, and communication. It helps the construction company proactively address potential
challenges, maintain project timelines, and stay within the budget, ultimately ensuring project success.

3. A company has experienced several major financial losses due to poorly managed risks. How would
you create a culture of risk awareness and mitigation within the organization to prevent future losses?

Creating a culture of risk awareness and mitigation within an organization is essential to prevent future financial
losses. Here's a step-by-step approach to fostering such a culture:

Leadership Commitment:

Start by gaining strong commitment from top leadership, including the CEO and senior executives. They should
endorse and actively participate in the risk management culture initiative.

Define Risk Management Goals;

Clearly define the objectives and goals of the risk management culture. Ensure that everyone in the organization
understands the importance of managing risks to prevent financial losses.

Establish a Risk Management Team:

a. Create a dedicated team or appoint a Chief Risk Officer (CRO) responsible for overseeing the risk
management program. This team should have the authority and resources to implement risk mitigation
strategies.

Risk Assessment and Identification:

a. Conduct regular risk assessments to identify potential risks that the organization may face. This should
encompass financial, operational, compliance, and strategic risks.

b. Involve employees at all levels to participate in the identification of risks. Encourage them to report risks and
near-miss incidents.

Risk Mitigation Plans:

a. Develop clear and actionable risk mitigation plans for identified risks. These plans should specify
responsibilities, timelines, and measures to reduce or eliminate the risks.

b. Involve relevant departments and employees in the development of mitigation strategies. Encourage cross-
functional collaboration.

Communication and Training:

a. Communicate the importance of risk management and the organization's commitment to it. Use various
communication channels, including company-wide meetings, newsletters, and training sessions.

b. Provide ongoing training and education on risk management principles, procedures, and best practices.
Ensure that employees at all levels understand their role in risk mitigation.
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Incentives and Recognition:

a. Implement a system of rewards and recognition for employees who actively participate in risk management
and contribute to successful risk mitigation.

b. Recognize and reward teams or individuals who develop innovative and effective risk mitigation strategies.

Regular Reporting and Monitoring:

a. Establish a system for reporting and monitoring risks and mitigation efforts. Regularly review the progress
and effectiveness of risk management plans.

b. Use key performance indicators (KPIs) to track and measure the success of risk mitigation efforts.

Learning from Past Mistakes:

a. Encourage a culture of learning from past mistakes and near-misses. Conduct post-incident reviews to
identify root causes and improve risk management practices.

Continuous Improvement:

a. Encourage a culture of continuous improvement in risk management. Regularly revisit and update risk
assessments and mitigation plans based on changing circumstances and emerging risks.

Share Success Stories:

a. Share success stories of how effective risk management prevented potential financial losses. Use these stories
as examples of the benefits of risk awareness and mitigation.

By implementing these steps, an organization can foster a culture of risk awareness and mitigation, reducing the
likelihood of future financial losses and improving overall resilience and performance.

4. A project team is struggling to identify and assess potential risks in their project. How would you
recommend implementing and utilizing risk management tools and techniques to effectively identify
and address these risks?

Implementing and utilizing risk management tools and techniques can greatly assist a project team in
identifying and addressing potential risks. Here are some recommendations for the project team:

Define Clear Objectives;

Clearly define the project's objectives, scope, and constraints. This will provide a solid foundation for
understanding what risks may impact the project.

Assemble a Diverse Team:

Form a cross-functional team that includes individuals with diverse expertise relevant to the project. Different
perspectives can help identify a broader range of risks.

Brainstorming Sessions:

Conduct brainstorming sessions with the project team to identify potential risks. Encourage open and creative
thinking without judgment. Use techniques like mind mapping to visualize and categorize risks.

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Use Risk Registers:

Create a risk register or risk log to systematically record identified risks. This document should include a
description of the risk, its potential impact, the likelihood of occurrence, and the proposed response.

Historical Data Analysis:

Analyze historical project data to identify common risks or issues that have arisen in similar projects. Lessons
learned from past experiences can be invaluable in risk identification.

SWOT Analysis:

Perform a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) to identify both internal and external
risks that can affect the project's success.

Expert Interviews;

Consult with subject matter experts within and outside the organization. Experts can provide valuable insights
into risks specific to the project's industry or domain.

Simulation and Modeling:

Use simulation and modeling tools to create scenarios that help anticipate potential risks and their impact on the
project. This can be particularly useful in complex or large-scale projects.

Risk Workshops;

Organize workshops or facilitated sessions specifically focused on risk identification. These sessions can
encourage team collaboration and help uncover risks that might be overlooked individually.

Risk Analysis Tools:

Utilize quantitative risk analysis tools and techniques, such as Monte Carlo simulations, to assess the potential
impact and likelihood of risks more accurately.

Risk Checklists:

Use industry-specific or project-specific risk checklists as a reference to ensure that common risks are not
missed.

Risk Metrics and Key Indicators:

Develop key performance indicators (KPIs) that can serve as early warning indicators for potential risks.
Regularly monitor these metrics throughout the project's lifecycle.

Continuous Monitoring;

Continuously monitor and update the risk register as the project progresses. New risks may emerge, and the
likelihood or impact of existing risks may change.

Documentation:

Ensure that all identified risks are documented in the risk register with sufficient detail for assessment and
response planning.
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Communication;

Maintain open and effective communication within the project team regarding identified risks. Encourage team
members to report new risks or changes in risk status.

By implementing these tools and techniques, the project team can systematically identify and assess potential
risks, allowing for proactive risk management and better project outcomes. It's essential to view risk
management as an ongoing and integral part of the project's life cycle.

5. A project manager is facing multiple risks and uncertainties throughout their project. How would you
establish a systematic approach to identify, assess, and manage these risks to ensure timely
completion and overall project success?

Establishing a systematic approach to identify, assess, and manage risks is crucial for project success. Here's
how a project manager can go about it:

Form a Risk Management Team:

Assemble a cross-functional risk management team that includes members with diverse expertise related to the
project. This team should have a clear understanding of the project's goals and objectives.

Risk Identification:

Begin by identifying potential risks that could affect the project. This includes technical, financial, operational,
and external risks.

Conduct brainstorming sessions with the project team to gather insights and input on potential risks.

Risk Categorization:

Categorize identified risks into different types, such as technical, schedule, cost, quality, and external risks. This
helps in organizing and prioritizing the risks.

Risk Assessment:

Assess each identified risk by considering its potential impact and likelihood of occurrence. Create a risk matrix
to prioritize risks based on these factors.

Risk Quantification:

Use quantitative techniques, such as Monte Carlo simulations or cost-benefit analysis, to estimate the potential
financial impact of high-priority risks.

Develop Risk Mitigation Strategies:

Develop clear and actionable risk mitigation plans for high-priority risks. Each plan should include specific
actions, responsibilities, timelines, and budget considerations.

Consider creating contingency plans or fallback strategies for risks with a significant potential impact.

Risk Monitoring:

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Implement a robust risk monitoring system that tracks the status of identified risks throughout the project's
lifecycle.

Use key performance indicators (KPIs) or early warning indicators to detect risks as they emerge.

Communication and Reporting:

Maintain open and transparent communication within the project team and with stakeholders. Provide regular
updates on the status of risks and risk mitigation efforts.

Use clear and concise reporting to inform stakeholders about the project's risk landscape.

Documentation and Records:

Maintain detailed records of all risk assessments, mitigation plans, and actions taken. Use a centralized system
to store and manage risk-related documentation for easy access and reference.

Training and Awareness:

Ensure that all project team members are aware of the risk management plan and their roles in implementing it.

Provide training and awareness programs to enhance the risk management skills of the project team.

Continuous Improvement:

Conduct regular reviews to assess the effectiveness of risk mitigation strategies and the overall risk
management plan.

Use the lessons learned from this project to inform and improve risk management practices for future projects.

Risk Database:

Maintain a centralized risk database to catalog and manage all identified risks. This can serve as a valuable
resource for future projects.

By following this systematic approach, the project manager can effectively identify, assess, and manage risks,
ultimately ensuring timely completion and overall project success. It's essential to view risk management as an
ongoing and integral part of the project's life cycle.

6. Imagine you are the CEO of a tech company facing a major security threat. How would you identify
the risks, make a decision, and take action to protect your company and its data?

As the CEO of a tech company facing a major security threat, it's crucial to take swift and decisive action to
protect the company and its data. Here's a step-by-step approach:

Risk Identification:

Immediately assemble a cybersecurity incident response team consisting of IT professionals, cybersecurity

Identify and document the specific security threat. Understand the nature of the attack, the potential impact on
the company and its data, and the vulnerabilities that have been exploited.

Risk Assessment:
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Assess the severity and scope of the security threat. Determine the potential impact on data confidentiality,
integrity, and availability, as well as the financial, reputational, and legal consequences.

Collaborate with cybersecurity experts to conduct a comprehensive risk analysis, including a review of existing
security measures.

Decision-Making:

Based on the risk assessment, make informed decisions regarding the immediate response to the security threat.
Determine whether the threat is ongoing, and if so, whether it is necessary to isolate affected systems or
networks.

Decide whether to engage with law enforcement agencies, such as the FBI, to investigate the incident and
potentially track down the attackers.

Communication and Transparency:

Maintain open and transparent communication with internal and external stakeholders, including employees,
customers, partners, and regulators. It's critical to inform them of the situation without disclosing sensitive
information.

Coordinate with public relations and communication specialists to ensure that messaging is consistent and
provides assurance that the situation is being addressed.

Containment and Eradication:

Implement immediate measures to contain the security threat and prevent further damage. This may involve
isolating affected systems or networks, revoking unauthorized access, or blocking malicious activity.

Work with cybersecurity experts to identify and eradicate any malware or vulnerabilities that may have been
exploited.

Recovery and Restoration:

Develop a plan for recovery and data restoration. Ensure that backup systems are in place, and data can be
retrieved and verified for integrity.

Implement necessary updates and patches to fortify security and prevent a similar incident from occurring in the
future.

Legal and Compliance Considerations:

Consult with legal counsel to understand the legal obligations, including data breach notification requirements
and potential liabilities.

Review compliance with relevant regulations, such as GDPR or HIPAA, to ensure all requirements are met.

Cybersecurity Enhancements:

Invest in enhancing the company's cybersecurity infrastructure, including the deployment of advanced threat
detection systems, employee training on cybersecurity best practices, and the implementation of a robust
incident response plan.

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Post-Incident Review:

Conduct a comprehensive post-incident review to identify lessons learned and areas for improvement in the
company's security measures and incident response procedures.

Continuous Monitoring:

Implement continuous monitoring of the company's security landscape to detect and respond to emerging
threats promptly.

Public Disclosure (if necessary);

If the security threat is significant and has a broad impact on customers or the public, consider disclosing the
incident publicly while following legal and regulatory requirements. In a situation of a major security threat, a
rapid and well-coordinated response is crucial. As the CEO, your leadership and decision-making play a pivotal
role in protecting the company and its data, maintaining trust with stakeholders, and preventing future incidents.

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