Running head: MANAGING RISKS IN PROJECTS 1

Managing Risks in Projects

Name

Wentworth Institute of Technology

Commented [PJ1]: The following paper is an example of a synthesis. A synthesis paper uses multiple sources to explore one specific topic and shows where those sources agree and/or disagree on that topic. This example paper is more objective than analytic—that means that the writer does not share his/her opinion on the topic, but instead simply presents the ideas found in the sources themselves.

MANAGING RISKS IN PROJECTS 2

Abstract

This paper explores four articles on risk management practices for project managers.

These sources look into the process of risk management and how it may be different than

the process most project managers are used to. Like much of project management, there

is no one way or practice that will guarantee success in risk management. This paper will

delve into how risk management can be implemented to offer the best chance for success.

Commented [PJ2]: An abstract introduces the topic and offers a brief summary of the paper’s key points.

Commented [PJ3]: In the topic sentence of the abstract, the writer identifies the paper’s topic.

Commented [PJ4]: In the remainder of the abstract, the writer identifies the key points that he/she will develop using the source material.

MANAGING RISKS IN PROJECTS 3

Managing Risks in Projects

Risk management is both the science and art of identifying and planning for

various problems that may be encountered while working on a project. More than ever

before, organizations are launching innovative projects in order to stay on top of their

industries. As rapidly changing technologies become more and more ubiquitous, projects

are marked by “increasing complexity, uncertainty, and ambiguity” (Podean, Benta, &

Mircean, 2010). In response to these complexities, organizations and the project

managers they employ realize that planning for the unexpected is just as important as

achieving strategic objectives.

Projects that fall victim to various risks can upset the iron triangle of scope,

budget, and time. Planning for risks helps to ensure quality deliverables, on time and on

budget (De Meyer, Loch, & Pich, 2002). Ongoing planning during a project lifecycle

means that executing risk management procedures may be as dynamic as executing the

project itself (Stanleigh, n.d.).

Risk Management Steps

Stanleigh (n.d.) held that there are four main steps in the risk management

process: identifying the risk, assessing the risk, developing responses to the risk, and

developing contingency plans or preventive measures for the risk.

Identify the Risk

During the identification step, the project team must brainstorm all possible

sources of risk (Stanleigh, n.d.). This is one of the most important and difficult steps in

the process, since “it’s not possible to anticipate everything that can put a project’s plan

or schedule at risk” (Gray, 2005).

Commented [PJ5]: The writer begins the essay by introducing the topic (risk management) and by giving a definition of that term.

Commented [PJ6]: The writer begins weaving source information into the paper. Notice how the writer leads into the quoted material and follows up afterward with framing information and context—the quote isn’t just plopped in there without introduction or explanation. For additional tips, view the Learning Center handout on Integrating Sources.

Commented [PJ7]: There are no quotes around this idea, but it is information gathered from a source and rephrased in the writer’s own words—it is a summary. Summaries of source material are very common in APA Style and are often preferred over quotations. You still need to cite when you summarize. In this example, the writer has included all the necessary citation information in the parentheses at the end of the sentence.

Commented [PJ8]: APA Style recommends breaking a paper down into sections if it helps with readability and organization. Because risk management is process-based, it makes sense for the writer to break down the process of risk management into sections. Notice how the “four main steps” of this process, introduced in this main section, are broken down into four sub-sections that follow. For addition section tips, view the Learning Center handout on Sections.

Commented [PJ9]: Here, the writer uses multiple sources to develop the main point of this section. Using one source, they identify a method for identifying risk (brainstorming), and using another, they elaborate on the importance and shortcomings of that method.

MANAGING RISKS IN PROJECTS 4

Gray (2005) itemized the common types of risk to look for: financial resource risk

(example: funding is cut), human resource risk (example: key team member leaves during

a project), supply risk (example: flow of resources from a third party stops), and finally,

quality risk (example: project outcomes compromised because of rushing to finish).

Beyond considering these fundamental risks, balancing when to end the identification

process is important, as having to plan for every possible outcome is impossible.

Assess the Risk

A high level assessment of risk would categorize the various risks that were

identified as either acceptable or unacceptable (Stanleigh, n.d.). To do this a project

manager must assess the negative impact each risk may pose, ideally drilling it down to a

dollar value (Gray, 2005). Yet while a dollar value is good for putting impact into

perspective, there are additional merits to doing a mixture of qualitative and quantitative

assessment: “Past experience, gut feeling, lessons learned and historical data should all be

weighed in when making judgments about risk” (Podean et al., 2010). Additionally,

Podean et al. (2010) recommended assessing if project components are on the critical

path to get an idea if they might delay the project overall. This type of assessment is

called “duration cruciality” and allows managers to see how an isolated risk could impact

the project as a whole.

Develop Responses to the Risk

Responses to risk fall under three main categories: avoidance, mitigation, and

acceptance (Stanleigh, n.d.). Say, for instance, a project consists of developing new

memory to go inside PCs and the project team identified a risk in that a supplier may be

unable to fulfill the quantity of chips the project needs. Possible solutions would be to

Commented [PJ10]: When this source was first cited, all author names were written out (Podean, Benta, & Mircean, 2010). For sources with more than two authors, all citations after the first need only list the first author followed by “et al.” For additional tips, view the Learning Center handout on In-Text Citations.

Commented [PJ11]: In this paragraph, 3 of the writer’s 4 sources are used to develop the main point of the section. Information from each source is arranged in a way that helps the reader see how each source corresponds and relates to each other.

MANAGING RISKS IN PROJECTS 5

find an alternative supplier for the chips (avoidance), find a variety of suppliers for the

chips (mitigation), or develop a contingency plan if the supplier falls through

(acceptance).

Develop a Contingency Plan or Preventative Measures for the Risk

During the final step of risk management, a response to the identified risks must

be agreed upon and implemented. A contingency plan should be ready to be put into

action at a moment’s notice if the risk becomes a reality (Stanleigh, n.d.). If the

acceptance option was chosen in the example above, this might include drafting a list of

backup suppliers or developing an alternative chip in-house. Understanding what needs to

be done in case a risk becomes a reality alleviates some of the stress of the situation and

helps to prevent the need for crisis management (Stanleigh, n.d.).

Uncertainty Management

Like Gary (2005), De Meyer, Lock & Pich (2002) agreed that it’s impossible to

anticipate every risk a project may face: “Uncertainty is an inevitable aspect of most

projects” (De Meyer, et al., 2002). Uncertainty can be classified into four types (from

least uncertain to most uncertain): variation, foreseen uncertainty, unforeseen uncertainty

and chaos. These classifications do not necessarily go against traditional project risk

management theory but in fact complement it in terms of how one would assess various

risks.

De Meyer et al. (2002) stressed that risks in each of these four classifications

require the project manager to manage differently. The less uncertainty there is about a

risk the more a project team can rely on planning. In contrast, the more uncertainty there

is about a risk, the less a project team can rely on planning. In the case of significant

Commented [PJ12]: Here, the author creates a new section to discuss an aspect of risk management that is slightly different from what has previously been discussed. Separating this information into its own section helps the reader digest it and see how it both relates to the previous points made.

MANAGING RISKS IN PROJECTS 6

uncertainty, a project team must keep an open mind as they move forward and learn as

the project develops (De Meyer et al., 2002).

Conclusion

Project risk management does not guarantee that projects will be a complete

success but it certainly helps. As Stanleigh (n.d.) noted, “Proper risk management will

reduce not only the likelihood of an event occurring, but also the magnitude of its

impact.” Organizations have a lot to gain when proper risk management techniques are

implemented throughout the project lifecycle.

Commented [PJ13]: The conclusion offers a concise wrap-up. In this example, the writer reminds the reader why, overall, risk management is important.

MANAGING RISKS IN PROJECTS 7

References

De Meyer, A., Loch, C. H., & Pich, M. T. (2002). Managing project uncertainty: From

variation to chaos. MIT Sloan Management Review, 60-67.

Gary, L. (2005, October). Managing project risk. Harvard Management Update.

Podean, I. M., Benta, D., & Mircean, C. (2010, April). Overlapping boundaries of the

project time management and project risk management. Informatica Economica,

14, 156-163.

Stanleigh, M. (n.d.). Risk management...the what, why, and how. Business Improvement

Architects.

Commented [PJ14]: View the Learning Center Handout on the References page to learn more about formatting. This writer has used four print articles for source material. Your References page may look a little different if you use a variety of sources, like websites, online articles, podcasts, and more.