5 Effective Risk Management Techniques that will Change Your Business Success

Five Effective Risk Management Techniques that will Change Your Business Success

This is because of the fact that risk management is crucial to the overall functioning of an organization, as it is a tool through which it executes its business in the face of uncertainty and safeguard its valuable assets in a risky world. The modern business environment is characterized by volatility and, hence, the adoption of beneficial risk management dynamics has become a key component of sustainable growth and source of competitive power.

The first step in knowing risk management is to know the threats which can affect the goals of the organization. These hazards vary between business insecurities and logistics interruptions to computer hacking and enactment of regulation provisions. With the creation of advanced risk management strategies, a business is able to deal with problems before they become major concerns.

Risk management is an act of assessing, analyzing and offsetting the mitigated risks and doing so in a systematic manner. Organizations should also assess the likelihood and magnitude of every risk and order them by the present threat on operation. Such a strategic view also allows the companies to manage effective use of funds and apply specific solutions.

The latest risk management integrates high-level technologies and data analytics to improve the process of decisions made. Real-time monitoring systems and predictive modeling avoid future challenges and assist organizations in responding promptly to arising threats. These are some of the technological developments that have transformed the risk management practice of businesses.

Learners enrolled in business courses should realize that risk management involves more than conventional insurance and security provisions. It includes strategic planning, financial management as well as operational excellence. Learning these ideas equips students with qualities that employers in most fields are willing to pay top money to acquire.

In http://StudyCreek.com, we also have all the tools and guide in studying risk management to enable the student excel. Our site offers step by step course work, research support, and hands on information that improves grades.

To access more views on the methodologies of risk management and industry-best practices students may visit http://DissertationHive.com where they are presented with a lot of research materials and scholarly articles.
Effective risk management involves constant observation, periodical evaluation and the flexible plans that can be updated in accordance to the changes in business environment and threats.

SAMPLE QUESTION

Provide an example of the upside of risk and explain the concept.

2. Explain how Enterprise Risk Management varies from traditional risk management?

3. What are five examples of internal and external drivers of an organization’s risk culture?

4. Provide an example company, give a description of the organization and its work area. Define what a SWOT is.  Perform a SWOT for your example company and rationalize each of the company characteristics you choose.

5. Explain what a KPI is.  How might we use KPI’s in doing a risk analysis for an organization.  Choose five KPI’s for the Amazon organization and explain why you have made your choices.

6. Explain the Delphi Techniques.  How might it be used in coming to consensus on risk identification related to an IT driven project?

7.  A popular hotel has continued to lose business in its room service food sales over the last five years.  Using the Six Sigma DMAIC process explain what you would do in each step of the process to improve the sales – provide relevant, practical details. What statistics would you apply and why?

8.  Explain the Plan, Do, Check, Act concept – provide a practical example.  How might it be applied in improving project quality?

9. Explain the concept of Continuous Improvement – provide an example. How might it be combined with a Lean approach.

10. Explain the primary inputs and outputs in the Project Management Institute Quality Knowledge Area.8.  Explain the Plan, Do, Check, Act concept – provide a practical example.  How might it be applied in improving project quality?

11. Explain the concept of Continuous Improvement – provide an example. How might it be combined with a Lean approach.

12. Explain the primary inputs and outputs in the Project Management Institute Quality Knowledge Area.

Requirements:

Your response will be considered complete, if it addresses each of the components outlined above.

• Use of proper APA formatting and citations – If supporting evidence from outside resources is used those must be properly cited. A minimum of 7 sources (excluding the course textbook) from scholarly articles or business periodicals is required.
• Include your best critical thinking and analysis to arrive at your justification.

Text

Title: Managing Project Risks 

ISBN: 9781119489733

Authors: Peter J. Edwards, Paulo Vaz Serra, Michael Edwards

Publisher: John Wiley & Sons

Publication Date: 2019-08-13

ANSWER

Risk Management and Project Quality Analysis
1. The Positive Side of Risk: the Idea and the Example
Risk has always been known as the negative form of things, however, the upside of risk is the positive side that showcases the potential of a good result that is higher than the actual result. Hillson (2009) defines risk as uncertainty, which in the course of its occurrence is expected to show a positive or negative outcome to the adoption of goals. The advantage of risk is thus comprises the potential advantages that organizations may reap by engaging in strategic risk taking.

Examples: Tesla venturing into put a lot of money into the electric vehicle technology in the early 2000s was a major upside risk. Traditional auto industry depicted the electric vehicles as dangerous and unprofitable to invest in, however, the Tesla management could see the immense possibility of market disruption, environmental change, and evolution of technology. Such risk-taking has brought Tesla to become the most highly-priced car company globally and it led to its involvement in the electric vehicle movement.

The idea is not to say that risk management need not only be aimed at reducing threats but also at identifying opportunities to exploit. A firm with well controlled upside risk is capable of gaining competitive advantages, innovation breakthrough, and high levels of performance.

2. Comparisons between Enterprise Risk Management and Traditional Risk Management
Enterprise Risk Management (ERM), is a paradigm shift of the conventional process of risk management. According to the Committee of Sponsoring Organizations (COSO, 2017), ERM is a process that is implemented by the board of directors and other personnel of an entity followed by the management with the purpose of identifying possible events and manage risk within the risk appetite of the entity as applied within a strategy setting and across the enterprise.

Key Differences:
Conventional Risk Management Enterprise Risk Management
Departmentalized perspective Company-wide perspective
Focus on hazard risks Considers strategic, operational, financial, and compliance risks
Reactive threat mitigation Proactive opportunity identification

Limited senior management involvement Board and C-suite leadership
Compliance-driven Value-creation focused
Traditional risk management typically operates in departmental silos, addressing specific risks as they arise.

3. Internal and external Risk Culture Drivers
Risk culture is that together of values, beliefs and behaviour that determines how an organization determines, evaluates, and responds to risk. As the Institute of Risk Management (2012) states, risk culture spreads to every single level of an organization and it is largely influential in terms of effectiveness of risk management.

Internal Drivers:
Leadership Tone and Behavior: Risk awareness and commitment exhibits by the executive
Organizational Structure: Structure and span of control and reporting structures
Performance Incentives: Incentive systems which encourage or discourage risk taking
Communication systems: Systems of information flow and risk reporting
Training Development Risk education and competency building programmes

External Drivers:
Regulatory Environment: Laws and requirements of compliance
Industry Standards: Benchmarking and Best practice expectations
Economic Conditions: Volatility and Economic uncertainty:
Stakeholder Expectations: Demands of investors, customers and the community
Competitive Landscape: Market Dynamics and Competitive pressure

4. Apples inc- SWOT analysis.
Company Description Apple Inc. is a multinational technology company that operates out of Cupertino in California. The organisation develops, produces and market consumer electronics, computer software and internet services. The main Apple business segments are smart phones, tablets, PCs, smart watch and other services such as App Catalog, iCloud, and Apple Music.
SWOT Definition: SWOT analysis is a management instrument of appraising of Strengths, Weaknesses, Opportunities, and threats that an organization is exposed to. This model allows organizations to know their internal strengths and external environment forces which affect strategic decision-making.
SWOT Analysis of Apple Inc:

Strengths:
Brand Loyalty and Premium Positioning: Apple has a superior customer loyalty due to progressive design and exclusive experience to its users
Ecosystem Integration: Product connectivity through Apple offers the ability to retain and cross-sell the products to customers
Financial Resources: Cash strength to fund large investment in research and development and strategic acquisitions

Weaknesses:
Premium pricing strategy: Premium prices restrict penetration in the price-sensitive segments
Overreliance on iPhone Income: High capital concentration causes the company to be at the mercy of iPhone business fluctuations in the smartphone industry

The options of limited customization: Inability to modularise like the competition using closed ecosystem solution
Opportunities:
Emergent Markets: Expansion: The increasing population of the middle-class in emerging markets is also an unexplored market
Augmented Reality Technology: AR uses and opportunities in the field of games, knowledge and business
Health Technology Integration: increase the capacity of healthcare with Apple Watch and health monitoring services

Threats:
High Competition: Samsung, Google, and the other manufacturers keep challenging the market position of Apple
Regulatory Scrutiny: The investigation by the antitrust and privacy laws can affect the conduct of business
Supply Chain Disruptions: Weaknesses in global supply chains in the manufacturing and supply process

5. Risk Analysis and Key Performance Indicator (KPIs)
Key Performance Indicators (KPIs) reflectable numbers that measure organizational performance relative to organizational strategic performance. Regarding risk analysis, KPIs deliver alarming warnings and allow active risk management based on monitoring (Parmenter, 2015).

Amazon KPIs for Risk Analysis:
Customer Acquisition Cost (CAC): It calculates the effectiveness of marketing and sustainability of customer acquisition. According to increasing CAC, there is a possibility of market saturation or challenges related to competition.
Order Fulfillment Accuracy Rate: Keeps track of customer satisfaction and the state of operation. A falling accuracy is an indication of risk of supply chain or quality control.
Employee Turnover Rate: Reflects the condition of each organization and its ability to retain talents. This results in business outage and risk of losing knowledge through high turnover.

AWS Revenue Growth Rate: Cloud Services Growth and position. A shrinking growth augers this company off competition in the lucrative cloud computing business.
Inventory Turnover Ratio: Evaluates efficiency in management of the inventory and other demand forecasts. The Turnover is Poor and Turnover is a sign of lack of cash flow, and obsolescence.
The KPIs help Amazon to determine the emergence of risks, keep track of performance patterns, and take corrective measures in time before the problems become major ones.

6. Delphi Technique and IT Project Risk ID
The Delphi Technique represents a method of structured communication, which allows reaching to a masterable agreement among expert groups by repeatedly questioning the experts by using questionnaires. This method was formulated by RAND Corporation and it eradicates geographical limits and decreases groupthink bias (Rowe & Wright, 2011).

IT Project Risk Identification-use:
Selection of Experts Panel: Form a group of various IT specialists such as project managers, developers, security experts and business analysts
Preliminary Risk Questionnaire: Share risk identification questionnaires that identify risks thoroughly ranging in technical, operational and strategic risks

Anonymous Response Collection: Hard to be biased when the experts have to provide opinions without disclosing their identities
Statistical Analysis: Interpret answers in search of areas of consensus and wide variations of agreement.
Feedback Round: Deliver condensed results and demand improved/ polished opinion relying on group ideas
Agreement Achievement: Keep repeating until acceptable degree of agreement levels are achieved
In the case of IT projects, the Delphi Technique allows the elicitation of technical risks (challenges in system integration), operational risks (user adoption) and strategic risks (technology obsolescence) using the collective expertise of different people, and reducing the influence of personal biases.

7. Hotel Room Improvement using the Six Sigma DMAIC Process
The DMAIC (Define, Measure, Analyze, Improve, Control) is a process improvement approach having a structured method to tackle problems. Incorporated into the falling sales of hotel rooms service:

Define Phase:
Problem Statement: In the last five years, room service has run a reduction of 30 percent on sales.
Project Scope: Emphasis on food content, speed of delivery and satisfaction level amongst the customers
Success Metrics: Build sales by 20 percent, raise customer satisfaction levels to 4.5/5.0
Team Composition: Add food service manager, cook, front desk personnel and customer focused representatives

Measure Phase:
Current State Assessment: Gather baseline information in delivery times, order accuracy and customer complaints
Data Collection Systems: Enact order tracking, customer feedback survey and sale analytics
Performance Metrics: The average time of delivery (45 minutes), the accuracy of the order (78 percent), the level of customer satisfaction (3.2 of the total of 5.0).

Analyze Phase:
Root Cause Analysis: Use fishbone diagrams and 5-why analysis to identify underlying causes
Statistical Analysis: Apply regression analysis to correlate factors with sales decline
Key Findings: Long delivery times (45+ minutes), menu complexity, staff training gaps, and outdated ordering systems

Improve Phase:
Solution Development: Streamline menu, implement mobile ordering, enhance staff training
Pilot Testing: Test improvements on selected floors with controlled groups
Implementation: Deploy solutions systematically with change management support

Control Phase:
Monitoring Systems: Establish actual-time dashboards for key metrics
Standard Operating Procedures: Document progressed approaches and schooling materials
Continuous Monitoring: Monthly opinions with corrective action protocols

Statistical Applications:
Regression Analysis: Identify variables maximum strongly correlated with sales performance
Control Charts: Monitor procedure stability and come across versions
Hypothesis Testing: Validate improvement effectiveness via statistical significance checking out
eight. Plan-Do-Check-Act (PDCA) Cycle
The PDCA cycle, evolved by using Walter Shewhart and popularized through W. Edwards Deming, gives a scientific method to non-stop improvement. This iterative method allows corporations to put into effect changes systematically while gaining knowledge of from consequences (Deming, 2000).
PDCA Components:
Plan: Identify possibilities, examine modern country, expand improvement hypotheses
Do: Implement changes on small scale, gather facts, record experiences
Check: Analyze outcomes, compare real vs. Anticipated consequences, pick out lessons found out

Act: Standardize successful improvements, abandon unsuccessful approaches, begin new cycle
Practical Example – Software Development Quality: Plan: Development team identifies high bug rates in code releases and plans implementation of automated testing Do: Implement automated unit testing for one module, train developers on testing frameworks Check: Analyze bug reduction rates, developer productivity, and testing coverage metrics Act: Expand automated testing across all modules, establish testing standards, update development processes

Project Quality Application: PDCA enhances venture exceptional via organising continuous improvement cycles that deal with nice problems systematically. Teams can practice PDCA to high-quality planning, assurance activities, and manage processes, making sure that high-quality improvements are sustained and scaled throughout initiatives.

9. Lean and Integration of Continuous improvement
Continuous improvement is commitment of organizations to continuous development of processes, products and services. This philosophy underlines that the active recognition and practice of improvements to the organization should be enjoyed by all the members of the organization (Bessant & Caffyn, 1997).
Example TPS (Toyota Production System) is an example of continuous improvement provided by the use of kaizen events, employee suggestion, and systematic solving of problems. Employees of Toyota share ideas on how to improve, and there are thousands of improvements applied at all levels of building each year.

Lean Integration: Lean approach is all about making value adding without wastes (muda). Together with continuous improvement:
Value Stream Mapping: Find chances of improvement at the process level
Waste elimination: Attempt to continually improve that which does not add value
Employee Empowerment: Involve employees in finding solutions and solutions where they can find solutions to Adaptation of Change: Involve employees in determining and undertaking changes

Standardization: Document and standardize successful improvements
Measurement Systems: Track improvement impact on key performance indicators
The combination creates powerful synergy where lean principles guide improvement focus while continuous improvement ensures sustained enhancement momentum.

10. Project Management Institute Quality Knowledge Area
PMI Quality Management Knowledge Area covers processes that assures project deliverables that fulfill requirements of the stakeholders and also the organizational standards. This area of knowledge combines quality-related planning, assurance, and control efforts all over the project lifecycle.

Primary Inputs:
Project Charter: Decides what is expected and what constitutes success of the project.
Requirements Documentation: Describes which requirements stakeholders will accept Results Documentation: Describes what has been accomplished Literature Review Results Documentation (what has been done): Give information about what has been achieved (Results Documentation) through literature review
Stakeholder Register: Determines stakeholders in the quality results of the project
Risk Register: Records quality risks and demerits of risks prevention measures
Organizational Process Assets: quality policies, procedures and historical information

Primary Outputs:
Quality Management Plan: Explains quality standards, quality goals and quality control.
Quality Metrics: Identifies quality attributes, and acceptance attributes that are measurable
Quality checklists: Delivers formal verification forms of quality
Quality reports: Quality performance and suggestions about improvements are reported
Change Requests: Papers that provide quality changes to the project scope or process applied

Process Integration: The three processes that make up quality management run synergistically:
1. Plan Quality Management: Provides quality plan and quality criteria
2. Manage Quality: Installs quality assurance operations and process enhancement
3. Control Quality: Monitors delivers and confirms compliance to requirements
Through this integration process, quality concerns are instilled in the entire project lifespan starting with the project initiation to project exit thus qualities of the deliverables are to the expectation of the stakeholders and in-line with the organizational requirements.

11. Constantly Enhancing and Lean Strategy (Extended)
The concept of continuous improvement is not just a set of one-off improvement activities but instead, it becomes part of the organization. The strategy here has acknowledged that small pieces of improvement when performed in tremendous phases accumulate to become huge competitive advantages.

Lean Methodology Integration: The combination of continuous improvement with lean principles creates comprehensive improvement systems:
Just-in-Time Production: This option eliminates bogus inventory, but also demands perpetual enhancements in projection of demands as well as relationships with the suppliers
Poka-Yoke (Error Prevention): Introduces a mistake proof facility to eliminate defects and this is backed by an on-going development in error identification and elimination

Kanban Systems: A visual representation of the working process and locates areas that may be slowing it down, so that it can be improved indefinitely, both in terms of process flow and capacity capacity.
5S Methodology: It systematically arranges workplace combined with cultivating a philosophy of continuous improvement in the mind of the employee.

Example Realization: A manufacturing firm that undertakes lean-continuous improvement may include improvement teams in which they meet every week to find out where wastes can be reduced. These work groups apply value stream mapping as the way to visualize the process, employ kaizen events with the intention of fixing certain issues and keeping improvement tracking boards so they could survey better.

12. PMI Quality KA in Details
Quality Knowledge Area encompasses ample project quality management framework by the Project Management Institute as per the project lifecycle. This line of knowledge places much stress on the concept that quality is the responsibility of all people and has to be proactivly managed as opposed to being controlled upon completion.

Enlarged Input Analysis:
Project Management Plan: Combines quality and incorporates it into the scope, schedule and cost management works
Project Documents: truth regarding tracability project document, assumption log, and lessons learned Register structure quality planning

Enterprise Environmental Factors: Industrial norms, regulatory compliance and organizational quality culture
Organizational Process Assets: Quality policies, processes, templates and historical data on projects

Expanded Output Analysis:
Quality Management Plan: Describes the quality freeze, quality objectives, quality roles and responsibility and quality control activities
Quality Metrics: Delineates given, measurable characteristics of quality, in the case of defect density, customer satisfaction scores and benchmarks of performance etc.

Process Improvement Plan: Describes analytical process that systematically approaches project processes in the framework of improvement
Quality Control Measurements: Actual performance measures the quality in relation to the set metrics
Critical Success Factors: To manage quality successfully, it is to be integrated with all domains of project knowledge, engaged stakeholders at all stages of project lifecycle and observe and enhance quality execution. To ensure customer satisfaction and value creation by the stakeholders, the organizations have to strike a balance between quality cost and quality benefit.

Conclusion
In order to manage risks and to have quality projects, there should be integrated management approaches that involve both the old and the new frameworks. The companies should be able to build extensive risk culture, they should adopt organized improvement system, and they should focus on the creation of value to the stakeholders. A sustainable competitive advantage and a resilient organization is formed through the extent of enterprise risk management with continuous improvement processes and structured quality management.

The following aspects are all about the leadership commitment and employee involvement and systemic way of applying the established methodologies towards success in these areas. Companies that are adept in risk management and quality management establish atmospheres within which innovation flourishes, stakeholders are pleased and long-term success is attained.