Scenario Review
After successfully disposing hotel in the capital, there is a need to reinvest the newly acquired funds. The directors decided on investing in another hotel in a city that is nearby the capital. The task at hand is arrange for the acquisition of the hotel. Planning is also required for capacity, décor, services as well as branding for the launch. The hotel that is to be acquired is called Palm Tree Hotel. It is located in an upmarket suburb with a bed capacity of 40 room. There are 10 standard rooms, 20 deluxe rooms, 5 executive room and 5 executive suites. There is negative correlation between the success of a project and its associated risk level. Therefore, there is a need to manage risk to enhance the chances of success. This paper evaluates risks in terms of risk factors, risk drivers and risk mitigation.
Risks Drivers and Associated Risks
The first risk driver is inexperience with the project. The newly acquired hotel is in a new city that the firm has not operated before. The associated risks are cost overruns as a result of underestimating the required costs or required resources. Delays as a result of underestimating the required time. There is also a risk of litigation due to non-compliance with municipal laws unique to the town out of ignorance.
The second risk driver is the distance between the head office where management is and the new city. The associated risk is poor coordination. Poor coordination can result in decisions being slowed down, ineffective or blocked completely. Besides, lazy employees may take advantage of the limited supervision and shirk thus resulting in delays or cost overruns.
The third risk driver is resistance to change. The staff of the newly acquired staff will be retained. However, the policies, practices and culture of the firm will be applied. A few staff from the hotel that was sold will be taken to the hotel to transfer institutional knowledge. However, people are prone to resist change. Resistance to change creates a risk of sabotaging the project as well as delays in implementation of the project.
It is noteworthy that the various risk drivers and risk factors are interdependent.
Mitigations to the identified risks drivers and risks.
A proper assessment needs to be conducted during the planning stage. The assessment will ensure that adequate information pertaining to the project is collected so that decisions and budgets are based on accurate information and realistic assumptions. There is also a need to identify and familiarize with any new applicable laws.
Technology should be adopted to bridge the distance gap. For instance, teleconferencing can be applied ensure timely and regular meetings to assess progress. Similarly, the hotel can use CCTV cameras to monitor staff. Performance based contracts can also be introduced to prevent shirking. Employees will have to performance since their pay will be linked to their actual output and not the hours that they spend in the office.
Communication is key in managing change. The communication should include the need for change, how it will be implemented and the role of each member. The project manager should provide leadership in terms of motivating the team members. Staff should also be provided assurance to answer any concerns or fears that they suspect may arise as a result of the intended changes.
Bibliography
Crawford , L. & Nahmias, A., 2010. Competencies for managing change. International Journal of Project Management, Volume 28, p. 405–412.
Marle , F. & Vidal, L., 2011. Project risk management processes: improving coordination using a Clustering Approach. Res Eng Design, Volume 22, p. 89–206.
Zwikael, O. Z. & Ahn, M., 2008. The Effectiveness of Risk Management: An Analysis of Project Risk Planning Across Industries and Countries. Risk Analysis, 31(1), pp. 25-37.
