According to Allen et al. (2015), the probability or threat of injury, damage, liability as well as any type of negative occurrence which is generally caused due to some internal or external vulnerability is defined as risk. It is identified that risk mainly creates possibility of losing some original investment and as a result the chances of difference between the original investments to expected return generally differs a lot. In project, risk is considered as an uncertain event or condition which either creates positive or negative impact. It is stated by Brack et al. (2015) that every project faces number of risk and in order to resolve the opportunities as well as threats that are highlighted by the risk with the help of proper management strategy. The risks that are associated with the project can be easily resolved with the help of five main processes of risk management which mainly include risk identification, risk management planning, qualitative risk analysis, risk response planning as well as risk monitoring and control.
Project risk is defined as an uncertain condition or event that generally creates either positive or negative impact on the objectives of the project. There are number of risks that are associated with the project. According to Cagliano, Grimaldi and Rafele (2015) cost related risk in project mainly occurs due to scope creep or due to improper estimation of budget however slippages in schedule of the project causes schedule risk which not only delay the project but also enhances the cost of the project. On the other hand, performance related risk in project generally fails to produce proper consistent results with the specifications of the project. There are number of different types of risk like strategic risks, governance risk, operational risks as well as market risk, external risk as well as legal risk. It is opined by Fleming and Koppelman (2016) that project risks generally include internal risks that are generally associated with each stage of the project plus external risks that are generally beyond the control of the project team. An external risk that arises outside the organization generally affects the ultimate value that is generally derived from the project. In addition to this, seriousness of the project risks generally depends on the nature as well as magnitude of the possible end probabilities as well as consequences. It is stated by Glendon, Clarke and McKenna (2016) that if a risk event does occur within the project then it is quite necessary to handle the risk in order to mitigate the impact of risk.
It is identified that hospitality industry generally faces unique sets of risks in their daily operations and therefore in order to mitigate those risks, it is quite necessary to implement proper risk management processes. Effective risk management strategy helps in identifying, analyzing as well as assessing risks that are generally associated with number of different sources including legal ramifications, accidents, natural accidents as well as cyber security breaches and more (Hering et al. 2015). The risks like food safety, liquor liability as well as branding that are associated with hospitality industry generally creates negative impact on the day to day operations of the industry that further creates negative impact on the yearly revenue. In addition to this, cyber security is considered as the second highest risk which leads hospitality industry to constantly deal with social engineering attacks like phishing (Hornstein 2015). In order to resolve this issue, most hospitality business allocate capital as well as time in order to implement risk management strategy that not only mitigates the risks but also assists in improving sales, customer service as well as operational efficiency.
It is stated by Hwang, Zhao and Toh (2014) that implementation of risk management strategy is quite important as risk management strategies helps in identifying the strengths, weaknesses, opportunities as well as threats that are associated with hospitality industry. The strategies of risk management mainly help in contributing within the success of the hospitality industry by properly establishing lists of external as well as internal risks. The plan that is made with the help of risk management strategies generally assists in including various types of identified risks, probability of occurrence as well as potential and proposed actions in order to mitigate the risks (Hwang, Zhao and Toh 2014). The risks are generally categorized into low risk, medium risk as well as high risk and they are generally mitigated as per their probability of impact. As per the risk management strategies, the project managers maintains proper communication with the project sponsors as well as stakeholders in order to run the project smoothly and for communicating the plan (Kaiser, El Arbi and Ahlemann 2015). This generally helps in setting proper expectation before the people who provide funds to the project so that project can be ale to run smoothly without creating any disruption. It is found that with the help of proper identification, avoiding as well as dealing with potential risks, the hospitality industry can be able to respond effectively when any type of risk occurs.
By implementing risk management strategies within the hospitality industry, one can ensure that the chances of risk will be minimized or mitigated. Proper risk management processes helps in allowing the hospitality industry to maximize their profits by minimizing the expenses on various activities that are generally required for resolving problems (Kerzner and Kerzner 2017). In addition to this, risk management strategies within hospitality industry helps in creating proper risk aware culture, risk management objectives as well as proper infrastructure of risk management for managing risk in accordance with the approach of risk management (Marcelino-Sadaba et al. 2014). In addition to this, risk management plan assists the hospitality industry to avoid big disaster, enhance revenue by saving expenses, helps in providing proper competition as well as increases sense of responsibility for exploring new opportunities.
The venue “Georges Paragon” which is one of the leading seafood restaurants is highly popular for its blue as well as white interiors. It is identified that the restaurant helps in providing proper experiences to the customers however after proper research it is analyzed that the restaurant faces some design problems. The issues that are associated with the venue generally affect the user experience of the customers. In order to resolve this issue, it is quite important to analyze the risks that are associated with the venue appropriately. It is identified that risk management procedure is generally applied within the venue by conducting a risk assessment.
The risk ranking and filtering is considered as one of the most significant method that is generally utilized for risk management. This method is also known as relative risk ranking, risk indexing as well as risk matrix and filtering. This method mainly works by breaking down the entire risk into various different components for evaluating the components and their entire contribution within the overall risk (McNeil, Frey and Embrechts 2015). This tool will be helpful in considering the factors that generally affects the risks that is mainly faced by the organization. The factors mainly include event likelihood, time to impact, financial severity, injury severity as well as reputational impact severity. The risk ranking tool generally helps in listing all the various potential risk events which can create adverse impact on the organization and helps in illustrating the control that the organization has for managing as well as mitigating the risks (Paquin, Gauthier and Morin 2016). In the first step, appropriate scale for each of the factor is identified in order to decide how the controls are helpful in addressing the factors as well as risk.
The risk ranking tool is based on a matrix whose axes are the ranks for probability as well as consequences. Both the combination of risk likelihood as well as consequence generally assists in creating risk rank (Press et al. 2015).The risk rank matrices are generally utilized in order to assess the risks that are generally associated with the venue. The procedures that are generally utilized in order to assess the risks that are associated with risk assessment are as follows:
Identification of hazards: For identifying the hazards that are associated with the venue one need to understand the difference that generally exists between hazard and risk (Sadgrove 2016). It is identified that a hazards are generally identified by utilizing number of different techniques.
Decide the impact: Once the risks or hazards that are associated with the venue are identified then it is quite important to understand the impact of the risk. Analyzing impact of the risk is quite necessary in order to understand who might be in the venue will be harmed and by what procedure.
Identification of opportunities: While identifying the risks it is very much necessary to identify positive risks as well as opportunities. It is necessary to list all the events that would affect the venue in a quite positive manner (Schwalbe 2015). Analyzing positive impact is also necessary for the venue of Georges Paragon
Determining likelihood and impact: It is very much important to establish how likely the risk will occur for determining the impact of risk in context to time, cost, quality as well as benefits. It is very much necessary to analyze the impact as well as the likelihood of the risk.
Evaluating risks: After proper identification of risk and its impact, it is very much necessary to analyze the procedure that must be utilized in order to resolve or mitigate the issue. It is identified that the risks can either be resolved by utilizing proper risk management strategy (Silva et al. 2014). The strategies that are applied include avoidance, risk control, risk transfer, loss reduction, and duplication of resources as well as self retention. These strategies are quite helpful in managing the risks that are
Treating risks: This step is also referred as risk response planning. During this step, the risk which are ranked highest are identified for setting out proper plan in order to treat as well as for modifying risks in order to achieve acceptable levels of risks (Taylan et al. 2014). It is identified that in order to minimize the probability of various types of negative risks it is quite important to create proper strategies as well as preventive plans so that the risks can be easily resolved. Proper risk treatment measures must be provided for the risks that are ranked highest in order to resolve them effectively.
Assigning owners: An owner must be assigned to each of the risk so that each of the risk that is associated with the venue “Georges Paragon” will be properly monitored. The risk owners must be involved with stakeholders as well as team members in order to get the best possible buy-in (Schwalbe 2015). The owners generally collaborate with various possible actions that must be properly taken in order to mitigate the risks appropriately.
Review risks: Proper time must be kept for identifying new risks that are associated with the venue in order to monitor the progress. Risk management is the procedure that must be utilized in each of the project phase in order to analyze that the strategies or steps that are taken are helpful in resolving the risks associated with the venue (Sadgrove 2016).
Report on risks: The risks that create impact as well as likelihood within the range of four and higher should be listed on the status report (McNeil, Frey and Embrechts, 2015). It is very much important to encourage discussion about the important risks that are associated with the venue so that the executives can be able to get proper chance of providing input as well as direction for mitigating the project risks.
|
2.2 Venue Risk analysis form |
||||||||||||||||||
|
Risk / Opportunity Identification |
Risk & Opportunity Analysis |
Post Treatment Risk & Opportunity Analysis |
||||||||||||||||
|
Number |
Date Logged |
Raised By |
Status |
Type |
Description (Cause/Event/Effect) |
Proximity |
Category |
Likelihood |
Consequence |
Level (pre treatment) |
Treatment Response |
Treatment |
Treatment Update |
Owner |
Residual Impact |
Likelihood (post treatment) |
Consequence (post treatment) |
Level (post treatment) |
|
1 |
1/5/2018 |
Improper accessibility of the venue |
Active |
Threat |
Due to improper accessibility of the venue, the customers face difficulty in reaching the restaurant with the help of public transport like bus, car, taxi as well as by foot. |
1/20/2018 |
Accessibility risk |
Likely |
Major |
High |
Reduce |
The venue must provide proper accessibility to the customers so that customers can easily reach the restaurant by utilizing public transport like car, taxi and more. |
2/4/2018 |
Project manager |
It generally creates impact on the restaurant income |
Possible |
Critical |
High |
|
2 |
1/7/2018 |
Location of the venue is not close to the public transport’ |
Active |
Threat |
The location of the venue must be at place where people can easily reach without facing any difficulty. |
1/21/2018 |
Location risk |
Possible |
Major |
High |
Accept |
The restaurant must be in a place from where they can easily get public transport |
2/5/2018 |
Project manager |
It generally creates impact on the accessibility of the restaurant |
Possible |
critical |
high |
|
3 |
1/9/2018 |
Improper maintenance of the venue |
Active |
Threat |
Proper maintenance must be provided to the venue from time to time |
1/22/2018 |
Maintenance risk |
Possible |
Moderate |
Medium |
Reduce |
Proper maintenance facility must be provided to the venue |
2/6/2018 |
Project Manager |
It generally creates impact on the restaurant |
Possible |
Moderate |
Low |
|
4 |
1/10/2018 |
Improper training to the workers |
Active |
Threat |
Proper training facility must be provided to the workers so that they can be able to work properly |
1/23/2018 |
Training risk |
Possible |
Major |
High |
Reduce |
Proper facility of training must be provided to the workers of the organization so that they can be able to manage the operation effectively |
2/7/2018 |
Human resource manager |
It generally creates impact on the operation of restaurant |
Possible |
Moderate |
high |
|
5 |
1/11/2018 |
Improper quality of service to the customers |
Active |
Threat |
Proper quality of service must be provided to the customers |
1/24/2018 |
Customer service risk |
Possible |
Major |
Medium |
Reduce |
Proper quality of service must be provided to the customers so that more number of customers get attracted. |
2/8/2018 |
Quality analyst |
It generally creates impact on the yearly revenue of the restaurant |
Possible |
Moderate |
high |
|
6 |
1/13/2018 |
Improper condition of systems within the restaurant |
Active |
Threat |
Due to improper condition of the system the workers of the restaurant faces difficulty in providing proper customer service |
1/25/2018 |
System risk |
Possible |
Moderate |
Medium |
Reduce |
The condition of the system that are utilized in the venue must be improved |
2/10/2018 |
Project Manager |
It generally creates impact on the customer service |
Possible |
High |
Low |
|
7 |
1/14/2018 |
Low affordability |
Active |
Threat |
Due to higher prices, only the people above the middle class can afford the restaurant thus affordability of the restaurant is low |
1/26/2018 |
Affordability risk |
Possible |
Moderate |
High |
Reduce |
The restaurant must enhance their affordability so that middle class people can also visit the restaurant |
2/11/2018 |
Financial manager |
It generally creates impact on the prices of the restaurant |
Possible |
Moderate |
Low |
|
8 |
1/16/2018 |
Lack of proper staffing |
Active |
Threat |
The staffing of the restaurant is not proper and as a result the members of the organization are not able to provide proper service |
1/28/2018 |
Staffing risk |
Possible |
Moderate |
Medium |
Reduce |
Proper staffing facility must be provided to the venue so that proper customer service must be provided |
2/12/2018 |
Human resource manager |
It generally creates impact on customer service |
Possible |
Low |
High |
|
9 |
1/17/2018 |
Hike in price of raw materials |
Active |
Threat |
Due to hike in raw materials the venue faces number of financial risks |
1/29/2018 |
Price risk |
Possible |
Moderate |
Medium |
Reduce |
The restaurant needs to manage their budget so that they can run the organization operation smoothly |
2/13/2018 |
Financial manager |
It generally creates impact on financial budget of the company |
Possible |
Moderate |
Medium |
References
Allen, M., Carpenter, C., Hutchins, M. and Jones, G., 2015. Impact of risk management on project cost: an industry comparison. Journal of Information Technology and Economic Development, 6(2), p.1.
Brack, W., Altenburger, R., Schüürmann, G., Krauss, M., Herráez, D.L., van Gils, J., Slobodnik, J., Munthe, J., Gawlik, B.M., van Wezel, A. and Schriks, M., 2015. The SOLUTIONS project: challenges and responses for present and future emerging pollutants in land and water resources management. Science of the total environment, 503, pp.22-31.
Cagliano, A.C., Grimaldi, S. and Rafele, C., 2015. Choosing project risk management techniques. A theoretical framework. Journal of Risk Research, 18(2), pp.232-248.
Fleming, Q.W. and Koppelman, J.M., 2016, December. Earned value project management. Project Management Institute.
Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc Press.
Hering, D., Carvalho, L., Argillier, C., Beklioglu, M., Borja, A., Cardoso, A.C., Duel, H., Ferreira, T., Globevnik, L., Hanganu, J. and Hellsten, S., 2015. Managing aquatic ecosystems and water resources under multiple stress—An introduction to the MARS project. Science of the total environment, 503, pp.10-21.
Hornstein, H.A., 2015. The integration of project management and organizational change management is now a necessity. International Journal of Project Management, 33(2), pp.291-298.
Hwang, B.G., Zhao, X. and Toh, L.P., 2014. Risk management in small construction projects in Singapore: Status, barriers and impact. International Journal of Project Management, 32(1), pp.116-124.
Kaiser, M.G., El Arbi, F. and Ahlemann, F., 2015. Successful project portfolio management beyond project selection techniques: Understanding the role of structural alignment. International Journal of Project Management, 33(1), pp.126-139.
Kerzner, H. and Kerzner, H.R., 2017. Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Marcelino-Sádaba, S., Pérez-Ezcurdia, A., Lazcano, A.M.E. and Villanueva, P., 2014. Project risk management methodology for small firms. International journal of project management, 32(2), pp.327-340.
McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts, techniques and tools. Princeton university press.
Paquin, J.P., Gauthier, C. and Morin, P.P., 2016. The downside risk of project portfolios: The impact of capital investment projects and the value of project efficiency and project risk management programmes. International Journal of Project Management, 34(8), pp.1460-1470.
Press, A., Rosenberg, D., Fishbein, J., Batliwalla, F. and Spyropoulos, A.C., 2015. External Validation of a Risk Assesment Model for Bleeding Risk in Medical Patients: Findings from the Improve Investigators in a Tertiary Health System.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.
Schwalbe, K., 2015. Information technology project management. Cengage Learning.
Silva, V., Crowley, H., Pagani, M., Monelli, D. and Pinho, R., 2014. Development of the OpenQuake engine, the Global Earthquake Model’s open-source software for seismic risk assessment. Natural Hazards, 72(3), pp.1409-1427.
Taylan, O., Bafail, A.O., Abdulaal, R.M. and Kabli, M.R., 2014. Construction projects selection and risk assessment by fuzzy AHP and fuzzy TOPSIS methodologies. Applied Soft Computing, 17, pp.105-116.
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