Part 1: Risk Identification

Introduction to Risk Management

The idea of risk can be dated back to the early years. This concept was employed before making a decision. However, RM is comparatively novel to the field of business. Currently, scholars are conducting studies on RM in the discipline of project management (PM) because every new business comes with different types of risks which affect corporations. Rahman & Adnan (2020) attribute to Voetsch’s literature, which accounts for a significant rapport between the RM tactic and the project’s success. Such firms regularly fail to establish value-added project RM techniques because they use the tick-the-box method (Kutsch et al., 2014). Besides, risk management is a type of procedure that assists managers in identifying, evaluating, and minimizing risks. Effective RM strategy can improve the success of a project, and it is vital to maintain the procedures of RM’s performance regularly. Shahbaz et al. (2018) ascertain that there is a considerable number of criteria that can be employed to determine the general performance of a company and measure the efficiency of the activities. Low deployment of RM’s effectiveness in the project may fail. Thus, without critical evaluation of RM, a company is incapable of tracking risk mitigation progress. As a result, identifying risks in organizations plays a vital role in ensuring the overall success of a project. This far, risk management can be termed as the systematic procedure of identifying, analyzing, and responding to project risk. It entails leveraging the likelihood and costs of positive accounts and minimizing the possibility and consequences of adverse actions to project goals.

Identification of Risk

Risk identification is the first step in the RM process is ordinarily informal and performed in different ways depending on the company and the project team. The procedure entirely depends on the experience and the research of executed projects (Aven, 2016). This being a primary phase, a combination of tools and techniques may be used to identify the risk in any project. Projects may find it hard to eliminate hazards, but when they have been placed, it becomes easy to control them. RM becomes effective if the source of the risk is known and allocated before any difficulties occur. RM’s chief purpose is that the investors should prepare for possible issues that can arise unexpectedly throughout a project (Cervantes-Cabrera & Briano Turrent, 2018). Moreover, it will not only facilitate anticipating challenges in advance but also preparing oneself for their unexpected occurrence. This subtopic aims to obtain a list of risks that can have a cascading impact on a project’s development. Different techniques can be applied for mitigating the same. Sufficient identification of risks is the initial step to a successful RM.

Risk Assessment

Risk assessment (RA) is the second stage in the RM procedure, where the identified risk is critically analyzed for probable risks. RA is described as a shortlisting of risks starting from low to the highest impact on the project. Additionally, RA consists of qualitative and quantitative risk.

Qualitative Risk

Qualitative registers the identified risk in a formal way. Moreover, a risk register is employed for validating; Firstly, for classification and reference. This technique aids the identification of the source of risk and referencing refers to the unique reference number provided for each of the identified risks (Korombel & Tworek, 2011). Secondly, the risk description involves outlining a brief and precise description of the risk. Thirdly, the association to other threats. In any circumstance, any activity is rarely autonomous of activities that occur concurrently, and this will always be the case for risk for successful implementation of RM. Fourthly, the potential impact, the weight of threats on a project is determined in cost and quality. Below is an example of a registry entry that plays an integral role in capturing the project risk, controls, and assessment.

Fig. Table address/ref


However, this technique is usually employed during the initial stage of a project, and important data may not be accessible to precisely predict the risk’s effect. At this stage, the risk is categorized according to the high impacts of risks given more fundamental consideration than that of the medium, low or negligible threats by ranking it on a scale of 1(low) to 10 (high) as illustrated below.

Fig. 01:

Risk assessment illustration established from the impact and probability. Image address/reference:


The fifth step in registering risk is the likelihood of occurrence (P) and calculation of risk factor (RF). Considering the intuition and experience, the P of risk and its impact (I) is to be equated on a scale of 1-10. The formula calculates the risk factor for each of the tabulated risks.

RF = P+I – (PXI)

Where the value of P and I are weighed on a scale of 0-1 by dividing the figures by 10. Lastly, risk response or the mitigation strategy is a move taken to minimize or eradicate the documented risks. The common among risk mitigation procedures is avoidance, transfer, reduction, and sharing of risk. Based on the capability of dealing with and, the identified risks are allocated to respective stakeholders who will be responsible for addressing those risks.

Quantitative Risk Assessment

This risk assessment is typically taken for projects that are facing high, critical, and unmanageable as per the qualitative risk assessment. This assessment’s chief role is to locate the quantity of contingency introduced in the estimate for the risk experiencing this procedure. If a possible chance occurs, there would be an adequate budgeted amount to overcome an extra expenditure (Rathore, Thakkar, & Jha, 2017). Moreover, this analysis should be evaluated against the effort and the results from a selected method. Besides, complex and larger projects require in-depth examination as equated to small ones. When formulating the estimate, it is usually split into two distinct elements, one, the base estimate of those products known and a level of certainty exists; two, contingencies allowance for all uncertain aspects of a particular project. When these elements are accurately applied, they ensure that expenditure against risks is controlled. Notably, the effective method for quantitative risk assessment is the Monte Carlo Simulation which is used to model the possibility of different outcomes in a process that cannot easily be predicted due to random variables’ intervention (Prakash, Jha, & Mohanty, 2012). Using this paradigm, project managers can exclusively comprehend the impact of risk in prediction and forecasting models.

Emmanuel Addo

Emmanuel Addo is the founder of the Young Global Leaders Network, an international non-governmental organization registered in six (6) countries namely, Ghana, United Kingdom, Nigeria, Sierra Leone, Democratic Republic of Congo, and South Sudan and has a membership strength of over 15,000 young black professionals, students, graduates, and aspiring leaders.

The organization also operates in 25 other African countries. Emmanuel also doubles as the chief convener and founder of the Young African Leaders Summit, one of the largest continental youth summits in Africa.  

Currently works at Kingston University as a Business Engagement Team Member in their Partnerships and Engagement Department. 

He characterizes energy, integrity, result-oriented, and ground-breaking service in each detail of strategic management, change management, stakeholder management, and leadership acquaintances.
Emmanuel owns a core background in Sociology and Psychology from the University of Ghana.

Leveraging his experience as a youth activist and a dynamic young man, Emmanuel founded the Young Global Leaders Network, a youth organization that comprises young diplomats, young politicians, and aspiring politicians, business/entrepreneurial business leaders with the aim of championing a mutual agenda for the African youth and promoting youth participation in governance as well as promoting entrepreneurial culture.
Emmanuel nurtures an environment of teamwork and has expertise in data collection and analysis as well as both quantitative and qualitative methods.

Emmanuel worked as an Associate Lecturer at the London College of Advanced Management where he delivered a wide range of business management courses that involved principles of marketing, leadership, operation management, and research methods. Emmanuel has always maintained high teaching and learning standards to ensure that his students’ stand out in academic achievements and successful progression. As a stout believer and passionate key player in volunteering; Emmanuel creates quality time to giving back gladly to his community what he has learned and to educate individuals with free consultancy on career development. He is a leader anyone would love to look up to and with great integrity, commitment, and passion to make the world a better place.
Emmanuel worked as Qualifications Manager at the Open University in the UK.

Emmanuel is also the founder of Kickstart Innovation Hub Ltd, the entrepreneurial hub of Young Global Leaders Network.