Answer to Question #170172 in Economics for Muka

Question

Risk identification is the process of listing potential project risks and their characteristics. Risk identification plays a key role in the success of managing risk. Failure in the identification of risks can cause inadequacy in the whole process of risk management which then leads to non-achievement of organizational objectives. Tools and techniques facilitate the process of identification, and need to be adopted on the basis of firms’ characteristics.

Required:

Assume you have just been recruited as a financial risk manager at your dream company and one of your task on the first day of reporting at work is to perform risk identification and assessment activities and filter inessential or false threats and focusing on company/project-related risks in order to make the project/company less risky. Identify a company of your choice and conduct a risk identification process using at least 3 tools of risk identification. The risks should be unique to the company of your choice. In addition you should explain the merits and demerits of the risk identification tools you shall use. (50 Marks)

Answer 1

Risk identification involves identifying and classifying sources of a risk to realize what must be managed in a construction project. Risk identification is the first step in Risk management process, as the potential problems must be identified before assessment, respond and control of the risk can take place.

3 risk identification tools and techniques that can be used are:

• Documentation Reviews,
• Information Gathering Techniques,
• Brainstorming.