PROJ6003 Project Execution and Control Online Tutoring

Introduction

Risk is an inherent part of any organization as there can be events that deviate an organization from its objective. Meiryani (2018) argued that there can be multiple risks for an organization. So, it becomes necessary for an organization to have a risk management strategy.

According to the case study by Kerzner and Kerzner (2013), Parks Corporation, is also facing several risks over the course of a subcontract project work.  Thus, there is a need to develop a risk management strategy for the organization by implementing a four-stage approach as follows: The first stage involves identifying the risk. The second stage involves developing a risk assessment framework in terms of probability and severity. The third stage involves developing a risk mitigation strategy. The fourth stage involves developing a reporting mechanism so that the risk can be prevented (Wysocki, 2012).

Risk Identification and Impact Assessment

Identification and Impact of Risks

Prima facia, the project seems to be a case of ‘communication risk’ only. However, based on insights from Chemutiri (2013), a detailed analysis was conducted and it was found that there were multiple causes of communication risk as discussed below.

The first cause was related to a lack of qualified personnel for the project. In recent history, Parks Corporation had focused more on production and less on R&D. Apart from a few experienced personnel, the company lacked the necessary R&D capabilities. The impact of this risk was observed during the entire project as the company faced a lot of technical issues for which the company had to spend significant resources to find a solution. The first instance was when Gary was asked to become a project manager from the project engineer, despite the fact that he lacked experience in project management. The company had project managers but they lacked experience in R&D projects. The second instance was that Gary was unable to find a balance between administrative and technical roles. He ended up executing more work and managing less work.  The third instance was that Gary had to do financial planning despite being a project engineer and he ended up miscalculating the expenses. This had an impact at the corporate level as higher profits were booked than the actual profits.

The second cause was unethical conduct in different stages of the project. The first instance was during preparing the RFP proposal. Gary and Gable were aware of the material lacking capabilities to operate in the specified range. Instead of intimating the customer about this risk, they thought of later convincing the client to change the specifications. This unethical conduct created a lot of issues during the project that delayed the project increased the cost, and damaged the goodwill with the customer. Another instance of unethical conduct was that when Gary and Evans came to know about the material lacking the age life specification, they hid this information from the senior management as well as from the customer.

The third cause was the lack of understanding of the scope of work properly. Parks Corporation had FFP (Firm-Fixed Price) contract with Lord. The company was unsure of the test matrix, and failure would have resulted in a changed scope of effort. As a result, a new test matrix had to be developed that delayed the project. While the customer was happy with the new matrix, but the customer stated that the additional cost burden had to be borne by Parks Corporation only. In the later stages, as the budget exceeded the estimates, Gary wanted to remove two of the four production runs (as part of a trade-off) to reduce costs, however, the customer did not agree to it.

The fourth cause was communication break-down, both internally as well as externally. The first instance was that Gary was not easily accessible to the Lord’s team. Also, he did not share any agenda with the customers before meetings that resulted in the Lord’s team not being able to actively contribute to meetings and needed additional time to understand the data.  The second instance was that the internal personnel team as well the customer team were not aware of new material development. They were informed only after the material was developed. This came as a shock to other personnel and customers. The third instance was a lack of coordination between the internal teams in preparing the verification mix. The impact was that the project was delayed and many employees had to work on overtime. The fourth instance was after eight months into the project when Gary and Grey tried to coordinate the schedule of engineering and production, however, the two teams were not aware of the existing schedule and accused Gary and Grey of keeping others in dark. The fifth instance was when due to a revised schedule of testing, some testing had to be done during holidays. Many personnel were not available due to holidays or were occupied in other projects, and a team from the customer was scheduled to monitor the testing over the holidays and the plan could not be rescheduled. The impact was that Gary had to do all the work.

Probability and Impact Matrix

Based on the insights from the Project Management Institute (2013), the probability and impact matrix for the above-mentioned risks is presented below.

Response Strategies

While the actual causes of the above-mentioned risk were different, however, the overall impact was a breakdown in communication. Thus, the response strategies were focused on two aspects:

First, to improve the communication between Parks and Lord, the customer decided to establish an office at Parks, so that their team can closely monitor the progress and engineer-level discussion can be facilitated without going through the project team. Second, the Lord’s team asked Gray to prepare detailed minutes of meetings. Third, the Lord’s team asked Gary for sharing weekly documented minutes of all technical interchanges between personnel from Parks and Lord.

Second, to overcome the communication breakdown among between different teams at Parks, Gary had to focus more on executing both technical and administrative tasks, instead of managing the tasks. For example, since he was not able to get personnel during a holiday for testing, so had to do it on his own. Due to his experience as an engineer, he was able to get the desired results as per the customer’s requirement. Also, he had to undertake different administrative tasks (meeting of minutes, financial planning, and bills) on his own, despite administrative tasks not being his forte.

The above strategies for improving communication (internally as well as externally) can be considered to be appropriate, however, the strategies were reactive in nature. Therefore, there is a need for a proactive strategy as well, that will be discussed later.