Running Head: THE RISK-OPPORTUNITY PHENOMENON.

A Reflection on the Risk-Opportunity Phenomenon.

By Ayodele Akinola July 17, 2011

Ayodele Akinola, MBA

THE RISK-OPPORTUNITY PHENOMENON.

The Risk-Opportunity Phenomenon. Embarking on projects in the attainment of project objectives, an amount of ambiguity is demonstrated as negative forces that may hinder the capability to accomplish objective. These negative forces appearing from nowhere necessitate circumvention or reduction, and can be either internal or external. On the other hand, the typically identifiable project risk-management process fundamental to threats can obviously include opportunities. Opportunities occur as the clarification to the risks of over running schedule and going beyond budgets. A fundamental challenge is the recognition and utilization of opportunities and trends. The identification requires determined rationale and methodologies for a proactive management. The contiguous characteristic of risk is uncertainty, encompassing the implication of exact incidences and probability (Nummelin, 2005). Explanations already encompass the dynamics as a constituent of the risk notion, utilizing uncertainty in the portrayal of negative and positive features of risk, resulting to opportunities and threats (Hillson, 2003). Risk and its implications are embedded in uncertainty, and it can either be perceived beforehand or hidden (Nummelin, 2005). Risk occurs as a twofold scheme; translating to the actuality that threat does not occur devoid of opportunities. However, the focus on risk management practice is extremely concentrated on risk management as threat, and the integration of opportunities to that common practice is perceived by some people as difficult (Nummelin, 2005). The usual perspective on risk is negativity, revealing an inability to succeed, impairment, weakness, damage, and repugnant outcome. Some modern-day processes and standards demonstrate the probability of uncertainties to exhibit gainful consequences in the accomplishment of objective (Hillson, 2002).

Ayodele Akinola, MBA

THE RISK-OPPORTUNITY PHENOMENON.

Despite this supposition, various applications of the risk process lay emphasis on the management of threat, and the progression towards opportunity management remains thoughtless. Extant tools and processes of risk management appear to focus on the negative region of risk. An imperative constituent of a risk management process encompass evaluation, detection, response development, and response control. An advantage in the simultaneous management of threats and opportunity is the similarity in status attainment. The objective of opportunity management on projects is the contrivance of a general methodology for risk management, such that it is adept in the management of opportunities and threats. Hillson (2002) asserted that a synchronized methodology for managing threats and opportunities could establish a reduction in unwanted negative outcomes, while concurrently making the best use of the likelihood of unexpected positive outcomes. A variety of basic extension of the regular risk management process was configured in the affirmation that the same methodology can deal with both opportunities and threats. Project risk needs effective management to attain project goals and objectives. The purposes of risk management in projects are recognized, and intrinsic in the successful contribution to project completion. The enthusiasm for the practicability is on the increase, in view of the fact that risk management is not producing the expected and definite gains. Many establishment making use of risk management to deal with project uncertainties constantly encounter project failure in the attainment of cost, time, and scope objectives. The solitary application of tools, techniques, and trainings by many organizations, though vital, is not adequate, without important features of accomplishments, particularly if the risk process would be expanded to comprise opportunities. An intense dependence on these attributes unaccompanied, devoid of sufficient thoroughness on other important features of efficiency can be unsafe (Hillson, 2003).

Ayodele Akinola, MBA

THE RISK-OPPORTUNITY PHENOMENON.

Demonstrable advantages in the expansion and inclusion of opportunity management is that the process of risk management will expand into an all-encompassing and recognized process, should new concepts are not initiated as a disconnection to the management of both threats and opportunities. The adoption of extant utilized methodologies of risk management will be sufficient as an addition, to reduce additional operating cost and training, in increasing the advantages, costs, team synergism, project success, stakeholder commitment and contingency management.

Ayodele Akinola, MBA

THE RISK-OPPORTUNITY PHENOMENON. References

Hillson, D. (2002). Extending the risk process to manage opportunity. International Journal of Project Management. 20(3), 235-236. Retrieved from http://www.ipma.ch/publication/journal/Pages/default.aspx Hillson, D. (2003). Effective opportunity management for projects. New York, N.Y.:Marcel Dekker Nummelin, J. (2005). Uncertainty management concerning cultural dynamics in project management. Paper presented at the 19th IPMA World Congress, New Delhi, India. Retrieved from http://crgp.stanford.edu/publications/conference_papers/Uncertainty_Management_Conc erning_Cultural_Dynamics_in_Project_Management.pdf