Risk Management Essay Example | Topics and Well Written Essays - 2500 words - 2

Risk Management - Essay Example Often, an infrastructural construction project involves a number of phases before final completion and transfer to the contract awarding authority. The phases include the appraisal phase, the design phase, the construction phase, and the operation phase. Although there are some cross-cutting risks across the phases, some are unique to each phase and hence it’s often important to independently review the risks in each phase. This paper addresses the risks likely to be encountered in each phase of an infrastructure construction project. However, before doing this, it is important to highlight the key steps involved in risk control process including risk identification, risk management, and risk response. Risk identification Risk identification involves determination of the risks are likely to impact on the project as well as documentation of the characteristics associated with the risks identified. This is not a one-time environment, rather it should be performed regularly and m ore especially through the whole project cycle. This is due to the fact that risks themselves are dynamic and change with time. Risk identification must be able to address internal as well as external risks. Internal risks are often within the projects control and as such can be eliminated or minimized through internal mechanisms. On the other hand, external risks are often beyond the project’s influence. Generally, there are a whole range of tools which can be utilized in risk identification including brainstorming, interviews, feedback from past projects, specialists use, and workshops, among others. Risk management This is a part as crucial as the risk identification itself. Often failures at this point can cost the organization lots of money and time. Risk management involves determination of the appropriate control tools as well as the appropriate responses towards dealing with the emerging or risks or their impact whenever they occur. Risk management involves risk quant ification where there is an evaluation of risks as well as the risk’s interactions as a means of assessing range of possible project outcomes. This is mainly aimed at determination of the risk events which warrant response. The process is often complicated due to a number of factors although not limited to how opportunities as well as threats can interact in unpredictable ways or a single risk event which constitutes multiple effects. Often it goes beyond simple mathematical expressions in order to attain precision and reliability. Risk response Determination of Appropriate Risk response techniques is crucial to successful control of the risks. A combination of management techniques are often employed in evaluation of the best methods suited the risk faced by infrastructure projects. These include risk reduction, retention of risk, and transfer of risk (Richardson, 2010, p. 23). Identifying appropriate risk management techniques therefore requires assessing of the interaction effects touching on a range of factors including safety, construction procedures and operations, financial decisions and strategic decision making. Risk reduction takes a two dimensional perspective. This includes reducing the likelihood or frequency of events occurrence and reduction of the consequences that an event is expected to have in case it takes place (Richardson, 2010). Risk transfer