The paper "Risk Management Tools and Techniques" is a brilliant example of an assignment on management. From the lectures, I was able to learn a lot about risk management which will be substantial in my daily activities and also my career. I understood that projects, as well as programs, involve some risks and for that reason, it is important to use the risk management tools and techniques to develop risk plans and strategies. The risk methods and tools enable project managers to efficiently manage risks. The examples of risk tools and techniques discussed throughout the semester are Monte Carlo, scoring models, decision trees, sensitivity analysis, and many others. I learned that for a risk plan to be effective it ought to be accompanied by one of the risk tool or technique which will hold in risk avoidance, mitigation, and also acceptance in some rare cases.
Projects should be run well by managing risk at different levels which are the portfolio, program, project, and also the operational level. A decision tree is a useful tool in managing risk since it shows the contingency of the risk. I learned that there was a need for a healthy culture of risk management to be availed for organizations.
The stakeholders involved in projects for an organization ought to understand well the need for risk allocation and utility. They should have a risk appetite so as to undertake risk aversion appropriately. Additionally, other stakeholders such as employees in an organization should appreciate and understand risk in an organization for proper risk management procedures in the organization. I learned that it was important for organizations to set up a healthy risk culture so as to take the risk seriously for proper management.
From the topic of the psychology of risk with the help of the bow tie tool, I learned that setting an appropriate risk culture was a challenge for most of the organizations. It was also important for stakeholders to understand the psychology beneath risk to come up with useful guidelines for a proper framework for managing risk properly. Additionally, organizations should know the various approaches for dealing with risks so as to address the issue of risk management in the organization. I also learned that the positive and negative sides of risks.
Risks are typically negative, but it may make an organization see opportunities that may be beneficial to the organization in the growth of the firm. I concluded proper risk management does not entail fearing to fail in the project but instead removing the barriers which hinder the success of the organization. Since project management is success focused on producing products and services, it is important to manage risk appropriately. Organizations should identify opportunities as well as the risks to attain the targets set in the project.
From this, I concluded that managing risk in a project is the alternative for being managed by risk. Each project manager ought to be aware of the practices and approaches to risks for effective risk management procedures. Understanding contingency reserves and PERT is imperative for an organization. Project managers should identify and manage risks to an organization to prevent difficulties in the future. The risk management tools and techniques provide supportive guidance for organizations to come up with proper policies, procedures, strategies, and plans for efficient managing of risk.
ReferencesENGG 3853 – Risk Management Tools & Techniques unit by Lecturer Aminah Wehbe