Risks will be classified depending on what they are related. According to Frenkel (2005), legal, technological, project management, internal and recurring risks are some of the aspect to which risks will be classified to by the firm. Recurrent risks involve things which are done over and over. Products will need to be marketed to avoid the risk of rejection. Continuous product improvement will be made to discourage product retardation. Internal business risks are those risks that have a bearing to stakeholders of the enterprise. The absence of a quality manager promotes a lack of quality control to projects. Production process risks will stall operation of the firm. Failure to the budget will impoverish project due to inadequate finances. Inadequate labor will cause the implementation to lag behind schedule.
Das (2006) says that project management risks emanate from failure to manage projects well. The framework should be well set to give time and quality guidelines. Leadership should be given after consultation to avoid opposition. Teamwork should be promoted to prevent resistance. External consultation should be efficient and fast to avoid delays. Actions should be well formulated to avoid delay. Technological risks are those that are related to technology issues. Skills must be adequate to prevent poor quality. Machines and equipment must work optimum to prevent delays due to downtime. Leadership must be well versed in technology to prevent resistance to mechanical resistance. Legal risks are those that are related to policies and regulations. Compliance of the project to government policies will avoid launching problems.
The combined happening of risks will stall while the program is giving it a 100 percent failure (Khatta, 2008). However, the rats of the impact of the aspects of risk events vary. Internal business risk has the highest risk, standing at 40 percent. Project management risks are the next in line for they have a risk of 30 percent. Recurring risks are third in line in the probability of happening with a chance of 15 percent. Technological risks have a chance of 10 percent of arriving. Legal risks are last in line for they have a low chance of 5 percent.
Rationale for probability
(2005) says that internal risks are the moving parts of the project. Finances, labor, process and quality management are the most critical part to allow take off of a project. Project management risks are the oiling parts that make the project move for they are second in line. Visionary leadership, teamwork, effective consultation, well-formulated framework, and schedule allow that project implementation to be smooth.
Recurring risks need to be monitored for they play a role in making products acceptable in the market (Das, 2006). Products must be well sold by using different sales promotion activities. Research and development of products are critical in establishing the quality of goods that meet customer needs and expectation. Technological risk offers operational management to the product. Equipment and machines should be well running to promote competition of production schedule. Skills should be square to ensure proper use of resources. Leadership should be effective to promote transformational change. Legal risks lead compliance with the law. Processes should meet policies and procedures set by the government.
According to internal business risks will starve the company resource wise. Project management risk will delay in production leading to losing of competitive advantage of the enterprise. Recurring risk will result in losses due to failure to make sales and attract customers. Technological risk will lead to poor quality products that do not meet consumers’ wants and expectation. Legal risk will result in cancelation of business operating certificate.
Rationale for impact
Finances are used to acquire all supplies required for the implementation of the firm. Lack of funds means a company will not pay salaries and allowances to employees. Employees should be adequate to ensure that no overworking which will affect the quality of products. The absence of a quality manager makes firm not control quality to meet customer needs as well as use resources in a prudent manner. Competitive advantage puts a company a mile ahead of competitors. Leadership should be adequate. Ineffective leadership results in failure to rally members into a team but rather promotes opposition. Weak leadership will consult late in the implementation stage leading to failure to stay within the framework and schedule.
losses emanate from lack to promote products as well as invest in research. Lack of customer awareness measures puts the firm at a crossroad for they cannot buy a product they have not heard. Lack of research and development puts products in the market through push method. Push method is where no consideration of needs and expectation of customers were done. The poor quality product is caused by lack of skills, faulty machines, and firm leadership. Employees who are inadequately skilled will produce substandard products. Broken machines make production be rushed to cover for a time during breakages. Strict leadership does not embrace transformation that includes technology changes. Cancelation of business will cause the dissolution of the firm or payment of enormous fines for noncompliance when the company wants to
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