CPMGT302 UOPX Risk Management

CPMGT302 UOPX Risk Management

Introduction

International expansion plays a major role in increasing profitability. However, it exposes organizations to various risks that could affect organizational performance. The most common risks include operational inefficiency, legal issues, and ineffective management. Therefore, organizations need a risk management plan that can be implemented to eliminate the risks or reduce their impact on the business. This paper reviews a proposed risk management plan for Verizon Communications Inc. by focusing on the objectives and goals, tools and techniques, organizational roles and responsibilities for effective risk management, information sources that may be used by the project team for risk identification, the risk management documentation that will be required for the project and the role of risk management in the project planning process.

Describe the objectives and goals, tools and techniques, and organizational roles and responsibilities for effective risk management for the project.

One of the objectives and goals for effective risk management for Verizon Communication Inc.’s expansion into China is establishing a reliable customer base. The company needs to identify its target market in China and where they are located to select a strategic location to set up business operations. The second objective is to create effective measures to deal with unavoidable risks. The third goal is to select the most effective market entry strategy based on the risks that could affect the company’s growth in the global market. For instance, if the company identifies one of the risks as financial loss due to a limited customer base, it may opt to use strategic alliances as the market entry method by partnering with a company that has established broad brand awareness and a good brand image. We offer assignment help with high professionalism.

One of the tools and techniques that Verizon Communications should consider for effective risk management is root cause analysis. According to Sarakbi (2019), root cause analysis is a systematic process used to identify the leading cause of events or problems and the most effective way to respond. It includes various steps that are connected. The first step is defining the problem by analyzing a situation or event. The second step is gathering data on various aspects of the problem or event. The third step is identifying the factors contributing to the problem. The fourth step is determining the leading causes of each underlying factor. The fifth step is recommending and implementing solutions to address the identified problem. Another tool and technique that Verizon Communications should consider is the probability and impact matrix. According to Ropot (2014), a probability and impact matrix is used to prioritize risks based on their importance and impact on the project. The company can then deal with the most critical risks first based on whether the risk is acceptable or unacceptable. The project team will also use SWOT analysis in risk management planning. According to Samset (2010), SWOT analysis evaluates an organization’s strengths, weaknesses, opportunities, and threats. Verizon Communications Inc. could use SWOT analysis to identify opportunities that can be leveraged to enhance its success in China and information about its threats to prepare the risk management plan that will be used to eliminate the threats.

The main organizational role and responsibility that Verizon Communications should consider in its risk management plan is to coordinate the various stakeholders for the project and ensure that the company’s mission and vision are considered in handling operations in the global market. The second role and responsibility is to provide major inputs to major stakeholders on the company’s general exposure to risks. Another role and responsibility is to define the cost of expanding into China based on the opportunities and risks identified using root cause analysis and probability and impact matrix. Verizon Communications should also consider monitoring the risk preventive and protective measures to ensure that the risks are managed effectively.

Describe various information sources that may be used by the project team for risk identification.

The project team needs to understand the business environment in China to predict the risks that the business could face. One of the information sources that may be used is case studies on organizations operating in the telecommunications industry in China. The case studies can be sourced from the internet and business journals. Another source is online surveys. The company may create an online survey with questions related to the telecommunications industry in China and any anticipated risks that a company could face. The team may also brainstorm to identify any potential risks the business could face and the most effective measures to address them.

Identify and describe the risk management documentation that will be required for the project. Examples include RMP and risk management logs or registers.

According to Hopkin & Institute of Risk Management (2012), risk management documentation includes recording all critical aspects of risk to guide the project team in identifying and classifying project risks. The risk management documentation that will be required for Verizon Communication risk management is a risk register. According to Jankensgard & Kapstad (2021), a risk register is a document that records all identified risks, the probability of occurrence, and the impact of the risk on the project. The project team will create a risk register using the risk register template that includes various components. The first component is risk identification, including the risk name or identification number. The second component is risk description, which will include a brief explanation of the risk based on whether it is financial or operational. The third component is the risk breakdown structure, which will include a chart listing all risks and the likelihood of occurrence. The fourth component is risk categories, which will include categorizing the identified risks that can affect the project, such as external or technical risks. The fifth component is risk analysis, which will include a review of the probability of risk occurrence and the impact of the risk. The sixth component is risk priority, which will include assigning a score to every risk by multiplying the probability values and risk impact. The seventh component is probability, which will include predicting the likelihood of the risk occurrence. The eighth component is risk response which will include risk mitigation measures selected to deal with the risk. The ninth component is risk ownership which will include selecting team members to take responsibility for every risk. The risk register will be updated regularly to include any new risks and eliminate those that have already been addressed.

Explain the role of risk management in the project planning process.

According to Ropot (2014), risk management is a structured and planned process that focuses on helping the project team identify, quantify, and classify risks and control and manage them. One of the roles of risk management in the project planning process is to balance the project input and output to manage risks that could limit the project’s success. Hopkin & Institute of Risk Management (2012) argue that risk management is also a continuous process that needs to be implemented in a project from when it is initiated to when it is completed. It should be implemented at the initial stages of a project to ensure that the project team is prepared to deal with any risks within the project. Another role of risk management in the planning process is preparing stakeholders for potential problems that could arise unexpectedly during the project. Risk management also helps the project team design ways to transform risks into opportunities to enhance project success. The main risks that Verizon Communications Inc. should consider in its risk management plan are operational risks, legal risks, and market risks. Operational risks arise from failures within an organization’s operations, such as technical failures or mismanagement. Verizon Communications Inc. could face operational risks because it is venturing into a new market that requires different business practices compared to what it is currently using in its home country. Legal risks are defined as financial risks arising from legal issues such as lawsuits. Verizon Communications Inc. could face legal risks if it does not adhere to the laws and regulations regulating business operations in China. Legal risks could significantly impact the company’s success in China because of its limited brand awareness in the country. Market risks arise from changes in prices. They may be classified as non-directional or directional risks. Directional risks arise from movements in the price of stocks and changes in interest rates. Non-directional risks are defined as volatility risks arising from changes in the business environment.

Risk Breakdown Structure

A risk breakdown structure is a hierarchy displaying the identified risks in a project. It categorizes risks based on their impact on the project. According to Salama (2021), a risk breakdown structure is used to create a risk identification checklist by taking the lowest levels in the structure and identifying various generic risks in every area based on prior experience. The table below identifies various risks that Verizon Communications Inc. may face when expanding into China.

Conclusion

Risk is a common issue in every business. Thus, the a need to understand how to manage various risks that could affect business operations effectively. Expanding operations into a new market exposes a business to various expected and unexpected risks that could have a long-term impact on the success of the business in the new market. Verizon Communication Inc.’s expansion into China requires leveraging various opportunities because the telecommunications industry in China is highly competitive. The company also needs to manage risks that could affect its operations effectively. The main risk management tools and techniques that the company needs to consider in its risk management process are root cause analysis, probability, and impact matrix, and SWOT analysis. The project team should also ensure that there is proper risk management documentation using a risk register. The team may use the risk breakdown structure to identify the main risks and complete the risk register. The project team also needs to be informed about the organizational roles and responsibilities that should be met for effective risk management.

References

Hopkin, P., & Institute of Risk Management. (2012). Fundamentals of risk management: Understanding, evaluating, and implementing effective risk management. Kogan Page Publishers.

Jankensgard, H., & Kapstad, P. (2021). Empowered enterprise risk management: Theory and practice. John Wiley & Sons.

Ropot, J. (2014). Project management. Duration, project planning, risk management. GRIN Verlag.

Salama, M. (2021). Risk management and Agile project management. Event Project Management. https://doi.org/10.23912/9781911635734-4781

Samset, K. (2010). SWOT analysis. Early Project Appraisal, 182-187. https://doi.org/10.1057/9780230289925_18

Sarakbi, R. (2019). Root cause analysis of cost overrun in construction projects under different market sectors.

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Risk involves uncertainty, the lack of knowledge of future events, and the measures of profitability and consequences of not achieving the project goal. Your organization has decided that to be successful in the global economy, it must expand its supply base into China or another country approved by your faculty member. This has become a strategic project for the organization.

CPMGT302 UOPX Risk Management

Select an organization with which you are familiar as the basis of the paper.

Write a 1,400- to 1,750-word paper in which you address the following risk management items for this supplier global expansion project:
Describe the objectives and goals, tools and techniques, and organizational roles and responsibilities for effective risk management for the project.
Describe various information sources that may be used by the project team for risk identification.
Identify and describe the risk management documentation that will be required for the project. Examples include RMP and risk management logs or registers.
Explain the role of risk management in the project planning process.

Create a risk breakdown structure that outlines the organization’s risk categories.

Consider the following categories:
Project risks
Business
Contract relationships with customers and suppliers
Management
Political
Organizational risks
Project management risks
Cost estimates
Schedule estimates
Communication
Technical risks
Production risks
Manufacturing concerns
Logistics
Support risks
Maintainability
Warranty
External risks
Procurement
Material availability
Lead times
Quality
Market

Format your paper consistent with APA guidelines.

Submit your paper and risk breakdown structure.