Qualitative Risk Analysis And Identification

Risk Identification

Discuss about the Qualitative Risk Analysis and Identification.

1. One risk event that is particularly related to the chosen subject of research i.e. Wood Utilisation in Construction Structure, Malaysia is the enforcement of government guidelines regarding timber supply and procurement in order to control and restrict poaching of valuable trees to as much as possible. On such an event, wood supply would be cut down by a significant extent that will also affect the utilization of wood in construction structures of Malaysia. It is to be noted here that wood is one of the main materials that are used extensively in Malaysia for construction of large structures and hence, the construction industry will be dealt with a massive blow if such an event occurs any time in the future. In the last 15 – 20 years, poaching activities have increased considerably around the world and the targets are not only the animals but also valuable and / or age old trees (Brittain et al. 2018). The stolen woods are sold in the black market at a very high price and are supplied to various wood distributors in the construction industry. With the growing concerns of loosing high value trees, many countries have brought about strict guidelines in the timber industry that includes verification of the source of wood before procuring it from the supplier. If the same is applied in Malaysia, it is expected that the supply of wood will be cut down by a very significant margin that will also affect the industry negatively. With the decrease in the wood utilization in construction structure, the usage of other alternative materials will increase in the country resulting in downfall of the wood industry in the country.

1. Two key causes for the selected event are as follows.

1. Poaching – The main cause behind the selected risk event is the extensive poaching of timber in the country leading to the imposing of strict government guidelines regarding supply and purchase of timber. As a result, the wood industry will face a strict challenge regarding survival and most of the small and medium size timber industry will be forced to shut down due to lack of supply of timber (Wilfred and MacColl 2014). Moreover, competing industries like concrete industry, glass industry and others will gain a strong market advantage.
2. Non-Verification of Source of Wood – Another key cause for the selected risk event is the enforcing by the Government to verify the source of wood before procuring them from the supplier. This step might be taken by the Government in order to reduce poaching as well as illegal sale of wood in the market. The Government may feel it important to enforce laws in order control the movement of wood materials from supplier to the manufacturer (Mukul et al. 2016). With this control, many of the illegal wood suppliers will be shut down resulting in a significant cut in the supply that in turn will increase the price of wood by a significant margin. As a result, many small and medium organizations will not be able to survive and ultimately shut down. For large scale organizations, the cost benefit margin will be cut down resulting in significant problems in the market.

The 5-level consequence table is constructed as follows.

Risk	Consequence
Changing Requirements of Users with Time Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Insignificant
Supply Cut Down from One Supplier	Minor
Lack of Manpower	Moderate
Cost	Major
Poaching	Catastrophic

This table has been developed in order to arrange the risks associated with the project i.e. utilization of wood in construction structure in Malaysia. As per the initial analysis, there are numerous risks associated in the relevant project area. However, it is clear that all the associated risks cannot be managed or mitigated together. Hence, it is required to arrange the risks in terms of consequences so that the risks with bigger consequence on the project will be analysed, addressed and mitigated prior to the other associated risks. From the consequence table created, it can be seen that there are five risk elements that have been arranged in terms of their consequences in the project (Haimes 2015). The most catastrophic risk is poaching that have been discussed previously. This risk will have a massive impact on the wood industry in Malaysia. The risk element that can have major impact on the project is cost. If the cost of wood rises up significantly in the Malaysian market, the cost of processing and construction of wooden structures will also increase significantly. As a result, people will look for cheaper alternatives for construction of structures and hence, the wood industry will face a difficult challenge to overcome. Lack of manpower is another risk associated with the field of the project. Since this chosen industry is mainly related to the construction of structures, it is important to maintain sufficient manpower for providing continuous service for building of wooden structures. The next two risk elements include cut down of supply from one supplier and changes in user requirements within a short period of time (Hopkinson 2017). These two risk elements have minor or insignificant effects on the project and hence, they can be treated and managed later.

1. In spite of arranging the risks as per their consequences on the project, it has been seen that some of the risks have occurred before suitable mitigation actions could be taken. Hence, it has been determined that prioritization of the risks just on the basis of consequences is not sufficient. As a result, another criterion has been chosen to arrange the risks i.e. the likelihood of occurrence of the identified risks (Cleden 2017). Hence, the more effective way to accurately identify and arrange the risks as per the priority is to consider both the consequences and likelihood of the risks and obtaining a specific value by finding the product of the two. The risk with the highest product value will have to be treated on the highest priority with respect to the other associated risks. The function of the likelihood table is demonstrated in the following table.

Descriptor	Criteria / Objective
Almost Certain	The event is expected to occur in most circumstances
Likely	The event will probably occur in most circumstances
Possible	The event should occur at some time
Unlikely	The event could occur at some time
Rare	The event will only occur in exceptional circumstances

Combining the consequence table and the likelihood table, the following table is generated that defines the priority of mitigation of a particular risk.

RISK RATING	Insignificant	Minor	Moderate	Major	Catastrophic
Almost Certain	Moderate	Moderate	High	Extreme	Extreme
Likely	Low	Moderate	High	High	Extreme
Possible	Low	Moderate	Moderate	High	High
Unlikely	Low	Low	Moderate	Moderate	Moderate
Rare	Low	Low	Low	Moderate	Moderate

 

Now, the likelihood table for the identified risks can be developed as follows.

Risk	Likelihood
Changing Requirements of Users with Time	Possible
Supply Cut Down from One Supplier	Rare
Lack of Manpower	Possible
Cost	Likely
Poaching	Almost Certain

Furthermore, the risks can now be categorized and prioritized based on both consequences and likelihood as shown in the following table.

Risk	Consequence	Likelihood	Risk Rating
Changing Requirements of Users with Time	Insignificant	Possible	Low
Supply Cut Down from One Supplier	Minor	Rare	Low
Lack of Manpower	Moderate	Possible	Moderate
Cost	Major	Likely	High
Poaching	Catastrophic	Almost Certain	Extreme

Based on this table and the created risk rating, it can be seen that poaching is by far the most top priority risk that must be considered and suitable actions must be taken before the other risks.

1. For the selected risk in the project i.e. poaching, the consequence in the project has been determined to be catastrophic. As explained previously, with the growing concerns of loosing high value trees, many countries have brought about strict guidelines in the timber industry that includes verification of the source of wood before procuring it from the supplier. If the same is applied in Malaysia, it is expected that the supply of wood will be cut down by a very significant margin that will also affect the industry negatively (Modarres 2016). With the decrease in the wood utilization in construction structure, the usage of other alternative materials will increase in the country resulting in downfall of the wood industry in the country. Hence, it is evident that all these effects will be catastrophic for any organization involved in construction of wood structures. Again, this particular risk is assigned with “almost certain” likelihood i.e. this risk should occur very soon.

Qualitative Risk Analysis

1. Wood is considered as the main material that is utilized extensively for construction of large structure however due to the enforcement of government guidelines regarding procurement and timber supply, the construction market of Malaysia is facing lot of challenges. In order to resolve this issue, the construction industry of Malaysia needs to opt for other types of construction materials so that they can easily exist in the market without facing any type of issues. The level of residual risk is very little and thus it would not create much impact on the construction industry of Malaysia. First, in order to apply a specific risk treatment measure, it is important to understand various risk treatment types. Four main risk treatment procedures are risk avoidance, risk reduction, risk retention and risk transfer. For risk avoidance, a risk has to be avoided if it has serious consequences on a particular project. Accordingly, suitable risk management procedures are undertaken so that the risk is avoided. Risk reduction treatment is used when the risk cannot be entirely mitigated or solved. Risk retention is done when the risk does not have major impact on project and can be mitigated along the course of the project. Risk is transferred when the risk occurs in a specific department but cannot be solved by the same department. So it is transferred to a different department involved in the project. The risk treatment that is utilized in order to resolve the problem that mainly occurs due to the enforcement of government guidelines regarding procurement and timber supply can create secondary risk. The secondary risk is mainly due to the fact that the construction workers are not trained to construct the large infrastructures with other materials other than wood and thus they may face lot of issues and challenges. In order to resolve the challenges, it is very much necessary to provide proper training to the workers of the organization so that they can opt for other materials and can be able to construct the infrastructures without any issue.

1. Due to poaching, the government has imposed strict government guidelines regarding the purchase and supply of timber and therefore the construction industry of Malaysia faces number of challenges and issues. In order to resolve the risks, it is the responsibility of the government to stop poaching but in an appropriate manner so that the construction industry of Malaysia does not get impacted so much. The residual risk of the after the risk treatment plan is quite low and thus it is analyzed that it would not create much impact on the construction industry of Malaysia. After risk treatment is applied, the worst credible consequence for this particular industry is not completely eliminated as it is also dependant on various external factors. However, treatment can be done to reduce the possibility of worst possible consequence as much as possible. Also, after the application of risk treatment, the secondary risk may occur that is due to various government guidelines and regulations related to the timber industry. Hence, the risk treatments must be applied in such a way that the government regulations and guidelines are also fulfilled. Due to the risk treatment plan that is implemented, the small and medium size industries are forced to shut down due to unavailability of woods. In order to mitigate the risks and challenges, it is very much necessary for the small timber industry to adopt strategies that would be helpful for existing in the market and it will be done by opting to deliver materials like concrete, glass and more so that they can easily exist within the Malaysian market.

1. Due to the enforcement of strict guidelines by the government of Malaysia on the supply and use of timer, the construction industry has to opt for other types of materials like concrete and glass. The other types of materials that will be utilized for the construction of large infrastructures are quite costly and thus it would create number of financial challenges for the construction industry. In order to resolve the risk, the construction industry needs to manage their budget properly so that they can gain profit. It is identified that the risk treatment plan that is developed has very much little residual risk and after proper analysis it is identified that the residual risk of the treatment plan will not create much challenges for the construction industry of Malaysia. The treatment plan also creates secondary risk for the construction industry. Due to the rise in the cost of the construction materials, the cost of the infrastructure will also rise and thus the number of customers who wants to buy the infrastructure will decrease. In order to resolve the challenges, the construction companies need to manage the budget appropriately so that they do not have to lose their customers and at the same time they can be able to resolve their risks as well as challenges.

The risk register for the project is developed as follows.

Risk Register
Risk No.		Risk Description	Cause	Consequences	Impact	Likelihood	Rating
1	Legal/Regulatory	Extensive poaching of valuable trees may result in Government ban for purchase and use of wood from non-verified sources.	Extensive timber poaching in the forests	Government ban, strong restriction regarding procurement and supply of wood	5-Catastrophic	5-Almost Certain	Extreme
2	Finance	High cost of wood may result in significant rise in the cost of construction or supply of wood.	Increase in prices of wood due to lack of supply or government restrictions	Customers looking for cheaper and better alternatives	4-Major	4-Likely	High
3	Commercial	Lack of sufficient manpower in the industry may result in the delay of construction and customer dissatisfaction due to the same reason	Reduction in manpower in the industry	Customer dissatisfaction, rise of other alternative industries	3-Moderate	3-Possible	Medium
4	Commercial	One supplier may get shut down and will not be able to provide sufficient amount of supply wood to the organization	Various external reasons related to the supplier	Cut down in supply will result in decrease in service time and progress of wood construction works	2-Minor	1-Rare	Low
5	Commercial	Rapid change in the user requirements will result in losses of the company to change the project at various points of time	Changes in user requirements	Slow down in project progress, rapid and repeated change management processes	1-Insignificant	3-Possible	Low

Treatment	Residual Risk	Residual Risk Probability	Residual Rating	Who	When	Status
Verify source of wood before purchase	Incorrect information	High	High	Marketing Manager	PLEASE FILL	Active
Regulate costs to meet customer needs	Rapid changes in market	High	High	Marketing Manager	PLEASE FILL	Active
Recruit skilled manpower	None	–	–	HR Manager	PLEASE FILL	Active
Choose reliable and verified supplier	None	–	–	Marketing Manager	PLEASE FILL	Active
Provide services based on contracts	Too much demands from customer	Medium	Medium	Operations Manager	PLEASE FILL	Active

 

A major risk that happened in a project that I was involved in was during my research project when I was working on the internet in order collect data from various sources including literature. While using the internet, I surfed through various sources and website links in order to find relevant pieces of information. However, at one time, an advertisement popped up on the screen showing large discounts from a well known online shopping site. Attracted by such an offer, I instantly clicked on the link that redirected me to an unknown website. Unable to reach the website of the shopping site, I immediately pressed the back button and tried to return to my research work. However, within a few seconds, a large message popped up on the screen that said it had encrypted some of the files in the system using a technique that cannot be decrypted without a single key. It also said that unless I pay a certain amount of money in the form of bitcoins, the key will be automatically destroyed and I will never be able to retrieve the files encrypted. Furthermore, the charge will also go up if I try to manipulate the software or shut down the computer. I understood that I became a victim of ransomware – a major source of risk in the IT industry. According to Rabbi et al. (2016), ransomware is a software that is specifically designed to capture various files from a particular system and lock them with such strong encryption that cannot be decrypted using any means. Attempt to tamper the software by any means triggers an operation that deletes all the files captured from the system immediately. As per Glendon, Clarke and McKenna (2016), this is a very serious type of risk that cannot be solved by any method once it enters the system. Hence, the only way is to protect the system with suitable measures that will not allow any such type of software to enter into the system at all.

As I encountered the problem during the research project, I lost many of my files from the system and that I was a significant setback in my research project work. I realized that I needed to evaluate the risks in the project earlier and take suitable actions for mitigating the risks. Furthermore, I needed to be more aware regarding the use of the internet as there are millions of malicious links lurking in most of the websites that can inject malwares into the system at just one single click. While there are some malwares that do minimal damage to the system, some are extreme like the one I faced resulting in a loss of a huge amount of files and facing significant setback in my project work.

Risk Treatment

As a result of the significant setback, I took certain initiatives so that these risk events do not occur again in the near the future. I first reported to the project supervisor regarding the incident so that sufficient funding is available for taking actions against the encountered risk event. I appointed a network specialist to work on installation of system firewall that will be able to block the entry of any kind of malware or malicious files into the system. Furthermore, in case of attempted entry, the firewall will immediately notify the user so that he can take immediate mitigation action. Additionally, I installed antivirus software in order to delete any kind of malicious files that have already entered the system through some unauthorized sources.

The risk management actions were only taken after the risk event occurred and already significant amount of work have been lost. Hence, this can be considered as bad risk management because the risk event could not be avoided. What needed to be done was taking the precautions early so that the risk event could be avoided. Before starting the project, sufficient risk analysis was not undertaken and as a result, we were not prepare to counter any risk that could come our way during the course of the project.

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