Management Essay Example | Topics and Well Written Essays - 1750 words - 1

Management - Essay Example In this context, the management of risk has become an indispensable part of strategic management. It should be noted that the risk management approaches used by businesses worldwide are not standardized. This means that organizations of different size and characteristics can choose the risk management approach that best suits to their needs. Current paper focuses on risk as an element of the project management. Reference is made to a particular company, the Informative Web Systems (IWS). The firm operates in the Australian market for about a decade. Since last year, the performance of the firm has been deteriorated, being decreased for about 8% compared to 2009. The failures of the project risk management of the firm have been considered as responsible for this outcome. The current project risk management of the firm is evaluated compared to other project risk management approaches – as presented in the literature. ... In businesses the effects of risk are usually related to the decrease of organizational performance. The level at which risk can be estimated by reviewing the common consequences of similar risks in businesses operating in the same industrial sector (Khosrowpour 2001, 142). In accordance with Kaye and Graham (2006, 6) one of the most usual characteristics of risk is that it cannot be fully eliminated; it can always appear, in different forms, even it has been already faced successfully. Moreover, Bowden, Lane and Martin (2001, 5) note that the failures in managing risk can have a series of consequences for the businesses involved, including ‘sanctions for directors, civil claims and legal costs’ (Bowden, Lane and Martin 2001, 5). The effective management of risk means that risk related to the operations of a particular organization is effectively identified and addressed (Bowden, Lane and Martin 2001, 165). Referring specifically to the risks related to projects, Merna a nd Al-Thani (2008, 42) noted that the management of such risk refers to a series of non-monetary issues/ needs, such as: environment, people, ethics and quality (Merna and Al-Thani, 2008, 42). 2.2 Project risk management approaches in Informative Web Systems (IWS) 2.2.1 Project risk management in IWS - overview One of the priorities of the project risk management approach used in Informative Web Systems is the limitation of risk in the beginning of each project – reference is made to the risks related to the initial phases of the firm’s projects. Because of the need for continuous update of the technology involved in the development of the firm’s project, the risk management approach developed by the firm’s managers has been based on the following principles: a) risk related to