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Project

The term Project has different definitions which are illustrated by different authors and

researchers. Defined as “endeavour of temporary in nature commenced to generate an exclusive

results, product or service (Schwalbe, 2012)”. Conclude over period of time, with the

accomplishment of predefined purpose and it is a planned activity.

When purpose has been achieved project has to be finished which makes Projects different

from operations. Projects have several characteristics Schwalbe in her book discussed following

few aspects which make projects different from operations:

a) Purpose of a project is unique: a well-constructed objective should be associated with a

project which should be accomplished for its completion by the end of the project.

b) Temporary in nature: A definite time a project has that actually determine its success as

well as for its beginning and closing period.

c) A sponsor or primary customer for a project: stakeholders for a project are in large number

however; project sponsor has to be played by someone. Responsible of funding and

direction of the project is given by a sponsor of a project.

d) Uncertainty related to project: every project is unique in structure as earlier defined and

objectives also, work on different timelines, and budget have different estimates at times

as a result difficult it turns to achieve the project. Also created uncertainty by the external
factors: for example, supplier’s unavailability, for some reason project team member left

the team; the project performance is hindered by the political issues and socio-economic

factors.

1.1 Project Management

Organizing the effort to complete and carefully planning an effective project is known as

project management. The project management purpose is to adapt for future problems are

forecasted and during planning the bottlenecks, the activities of project for successful execution

and completion, organizing and controlling the organization risks being faced for overcoming all

of them. To make a project successful Project management technique are chosen for the meeting

of schedule, in limitations of the budget, and must important aspect be to delighting the clients of

the project (Lock, 2003). Project management have five categorizes of elements.

The elements first category consists of while performing the project the specification and

requirements needed to be looked. Three next categories are stakeholders related and category in

last elements deals with the constraints (PMI, 2013). Project Management has 10 knowledge areas

around which it revolves that are illustrated by the PMBOK. In achieving the outcomes of the

project these all areas have their own significance and execution effectiveness (PMI, 2013).
1.2 Project Success

In the field of Project Management Project success is the traditional research topic, a lot of

work however researchers have done in this area but there observed no census up till now. on

“Project Success” can be categories into three modules by the Research work done:

a) Project success overall factors that are influencing it.

b) The success of the Project criteria to measure.

c) Factors and criteria relation in-between. (NIU Jing-min, 2010)


Success of the project was restricted by the traditional Project Management into major

three constraints which are: Scope, Schedule and the project cost. “Triple Constraint” is formed

by the combination of these three constraints.

On this part of project current researches illustrates that project success is bounded by these

three features. Stakeholder’s satisfaction is not considered or taken in account by the Triple

measurement while success is measured by the project under appraisal. History has proved that,

by meeting all three constraints by a project is still seen as to be a failed project because the

Stakeholders needs which were needed at best they were couldn’t meet. So, projects yet profitable

because meet the customer needs were same projects that failed to meet triple constraint (Tuman,

1986).

From the interpersonal communication Project success is derived and the project team trust

among them and other project stakeholders. With earlier statistical study references the essential

success factor is trust and effective communication among the supervisor and team member

whereas, in team performance team unity falls at second most parameter (Thuillier, 2005). Earlier

researches identify that on the time success dimension of the project top management support has

moderating impact (Carvalho, 2014).

2.4 Role of Project Manager in Project Success


An individual which is responsible for the project execution successfully for the all project

phases is known Project supervisor/ manager as which includes:

a) Initiations of Project

b) Planning of Project,

c) Design of Project,

d) Execution of Project,

e) Project Monitoring & Evaluation (control)

f) Project Closure. (Haughey, 2015)

A capable project manager is an obligation in order to accomplish the project objectives.

What are the qualities that make a manager/supervisor a competent one this arises a case? A

“intelligent” project supervisor is a “capable” project supervisor and “accurately” acts or does

“effective” act in risky situation. In relevance with the purpose that is what a “good” Project

manager is expected to do (Christophe Bredillet, 2015).

Managing project in current time is considered to be complex and it is getting more

complex time by time. To cope up with the dynamic situations a proactive project manager

(Leader/Supervisor) is essential: so, it may be technical, social or economic. As compared to

traditional periods of time the element of risk is high in today’s projects. In current scenario to

look at the unknowns in each project supervisor has to be very alert (Jergeas, 2015). To manage

up with these complications of project there must be certain capabilities in a project manager.

Project Management Institute (PMI) in 2014 has recognised PMI talent triangle which has three

different categories of skills, to manage project with complexities; competencies are as follows:
a) Business and strategic Management

To observe the strategic view of the organization which is observed by the competency and

those decisions are devised that strategic fit of the organization that it support. This includes

the ability required to align all the organizations functions such as to bring innovation in

operations, Human resource and marketing.

To grab the opportunities the Business and strategic management ability emphases on the

dynamics of environment that the organizations work for in a longer run. Supervisor is

considered proactive and modern tools and methodologies are used by him which are:

i. Identification

ii. Screening and analysing

iii. Opportunity grabbing

iv. Monitoring and controlling

Eliminating the gaps and barriers in a project Opportunity management is used, which

results from complexity. Taking opportunities is its main focus to make most benefits for the

organisation and optimistic approach is used for uncertain events.

b) Project Management with technique

Competencies related to technical knowledge, skills, tools and techniques a project

manager should have and to apply in an effective manner to handle complexities of projects

it may face. A project manager has the responsibilities to achieve goals of the project and

the cost, time, scope should meet.


In the Technical project management, Project manager abilities included are mentioned

below:

i. Skillful

ii. Procurement management

c) Qualities of Leadership

An important competency for a project manager leadership is considered which is required

in specific areas to deal team members with human behavior. In all the phases of project

leadership competency is obligatory from start till end of the project.

Projects leader in specific to informational technology of a programme or project with

terms of elements having complexities must negotiate and figure out for matter experts

dealing with critical subjects (SMEs) the programme is working on and then to persuade it

should be communicated to people in expert to the initiative, to its success show why their

expertise is important, and to the organization it distribute its impact.

At all phases of the project, leadership is important. To creativity and adaptability, the

project manager needs to show willingness towards the complexity and environment of

work which is changing.

Project manager has a responsibility of among the team member to develop teamwork so

that the project could achieve the outcomes. Team members should be motivated by the

Project manager to cooperate in order the overall strategies and goals are achieved by the

organizations. Among the members complexity in project effect the association, in this

scenario all efforts should be put by a manager need to create among all members the

synergy and cohesion (Levin, 2014).


All the goals of the project to be accomplished leadership skill of a supervisor is having

the uppermost significance. if project manager cannot disseminate information on time and cannot

communicate effectively, team members are made uncomfortable and stress and frustration are

enhanced. The success of the project will be limited due to this negative attitude. (Jergeas, 2015).

Empathetic attitude of a project manager in past research has exposed that the emotional reactions

of negative in nature of an employee could be managed (Humphrey, 2002).


Project Success

Success of the project was restricted by the traditional Project Management into major

three constraints which are: Scope, Schedule and the project cost. “Triple Constraint” is formed

by the combination of these three constraints.

On this part of project current researches illustrates that project success is bounded by these

three features. Stakeholder’s satisfaction is not considered or taken in account by the Triple

measurement while success is measured by the project under appraisal. History has proved that,

by meeting all three constraints by a project is still seen as to be a failed project because the

Stakeholders needs which were needed at best they were couldn’t meet. So, projects yet profitable

because meet the customer needs were same projects that failed to meet triple constraint (Tuman,

1986).

From the interpersonal communication Project success is derived and the project team trust

among them and other project stakeholders. With earlier statistical study references the essential

success factor is trust and effective communication among the supervisor and team member

whereas, in team performance team unity falls at second most parameter (Thuillier, 2005). Earlier

researches identify that on the time success dimension of the project top management support has

moderating impact (Carvalho, 2014).

Iron-triangle or triple constraint idea seem inappropriate and is under a lot of criticism

(Berssaneti and Carvalho, 2014). By some researchers Triple constraint is measured unnecessary
while these are incomplete are deliberated by some (Berssaneti & Carvalho, 2014). The project

management literature illustrates that it is not inclined towards effectiveness rather than its focus

on maintaining the efficiency (Berssaneti & Carvalho, 2014). On these criteria there is no

consensus among the researchers (Turner and Zolin, 2012). Project success research during the

early years, subjectively success was measured and also objectively to use metrics with easy, iron-

triangle is one can say (Atkinson, 1999). During 2002, by Cooke-Davies (2002) the idea was

recognized. The narrow-focused point of the project managers was to meeting the triple constraint

(Müller & Jugdev, 2012). the fact that interaction with the customer was kept at the lowest level

throughout the project implementation and delivery of a project (Müller & Jugdev, 2012). When

measuring project success triple constraint are given more importance, in both areas in the

academia and in the industry (Atkinson, 1999). It is an important issue to measure success which

is recurrently being discussed and lack is still persist on measuring success criteria and its

consensus (Crawford, 2002).

First time in order to better measure the concept the idea of triple constraint which is too

narrow and requires more consideration and width (Pinto and Slevin, 1986). By taking other

criteria to measure success which included project final stage aspects, the client/customer

satisfaction, and the finished product probability of the usage (Pinto and Slevin, 1986). Pinto and

Slevin criteria set were used in the same way in the following authors of these research and were

not challenged. After that, these criteria were endorsed by Lim & Mohamed (1999) and later

followed by Atkinson (1999). These criteria also endorsed and keep them part in their research

(Shenhar & Dvir, 2007). The concept of Pinto & Slevin (1986) was also agreed by Westerveld &
Gaya Walters (2009). Currently, these criteria are recognized in their own research and some more

criteria are also added like project impact and future potential (Serrador & Turner, 2014).

Project Success interprets different meaning to different individuals because project success is an

entity of multi-dimensional in nature (Shenhar & Max Wideman, 2000). At the start of a project

success is better characterized in terms of failure or success might be measured in terms of criteria

set among them (Shenhar & Wideman, 2000). In order to assess project subsequently success

measuring criteria of a project must be defined at the start (Shenhar & Wideman, 2000).

Additionally, the significance of the triple constraints along with success of product in the project

success (Shenhar & Wideman, 2000). came up with the new addition to criteria of project success

i.e. customer’s satisfaction/acceptance (Pinto & Rouhiainen, 2001) and (Kerzner, 2001). As the

focus of a company to towards customer because of customer satisfaction has its own essence

value, and in a success of a project it rises the part of its marketplace (Pinto & Rouhiainen, 2001).

To measure the success of project the functionality must be added along with the triple constraint

(Agarwal & Rathod, 2007). Supplementary criteria came up with namely; project success outcome,

the organization benefits, and the stakeholder’s benefits (Atkinson, 1999). Triple constraint they

do not even support to identify the importance of more criteria of project success and is also not

provide a thorough criteria (Atkinson, 1999). While measuring the project success all the

stakeholders during the project life must be considered (Anton de Wit, 1988). Project success is

complex to measure and the stakeholders involved in the project are the dependent variables of

view (Anton de Wit, 1988). With other criteria it recommends that, one also include safety (Lim

& Mohamed, 1999). Al-Tmeemy et al. (2011) illustrated that a finished product success should be

included, and Shahu et al. (2012) suggested that with other criteria specified in the mentioned

researches flexibility should also be kept.


Explained life cycles of a project with respect to different variation in success (Pinto &

Slevin, 1987). The impact of time in the project success criteria came up with this addition

(Shenhar et al., 2001). Success four dimensions are proposed after their qualitative and quantitative

research are conducted in which a future preparation of a new concept along with the prior concepts

were introduced; impact related to customer, success of organisation and efficiency of project

(Shenhar et al., 2001). Study was conducted in different time intervals which showed that the

timing of a project is also a great factor of a project success (Shenhar et al., 2001). Project

efficiency is further explained following to the finishing project is the dimension which can be

evaluated and also during the project implementation (Shenhar et al., 2001). Only when the project

is in the implementation phase project efficiency is the criterion which can be monitored and after

its completion and after one year of the completion of a project its loses can be measured (Shenhar

et al., 2001). The idea came up with that the customer impact importance with the passage of time

has the ability to increase and after the passage of two years success of a business (Shenhar et al.,

2001). Illustrated further that a project after three to five years of completion, starts to show more

impact and become dominant after preparing for the future concept (Shenhar et al., 2001).

A sole standardized conception is known as project success, as a result of methods

successfully incorporated by the project management (Baccarini ,1999). The Project Management

Body of Knowledge (PMBOK) by Project Management Institute (PMI, 2008) are in line with view

of Baccarini (1999) concept. When the needs of stakeholders are met the success of a project is

attained along with basic criteria of triple constraint. Though, it might be difficult to be met

stakeholder requirements because they are versatile nature (Baccarini ,1999).


In project management success of practices must be different from project success, but they

are different in nature but they may look similar (Cooke-Davies, 2002). Baccarini (1999) floated

this idea. In order to attain versatile and future outcomes projects are usually conceived and on

investment might attract return and after some time of completion of project a reasonable profit

margin which can be gauged (De Wit, 1988). Researcher came on with the idea that the project

management agile methodology is focused on unique outcomes of short term in nature, the triple

constraint which are most of the time referred these are traditionally gauged right after the delivery

of the product or the completion of project (Munns & Bjeirmi, 1996). Where the methodology of

project management seems to be failing there might be a situation that can be faced but the project

with a success might finish. Likewise, project management might be implemented successfully

but it could be other way around the delivered project might be considered as a failure, as the

anticipated margins it might not produce or industrial impact (Munns & Bjeirmi, 1996). One can

say that there are important three factors when it comes to project success measurement and

success of project. Discussing the timing, when the project is finished success is usually gauged

and the practices of project management implementation are completed and an end has reached

with respect to tasks. One can say at this point that all the criteria are met revealing a clear picture.

Before the completion of the project the evaluation of the project management practices will be

done so it will not gauge or will be never in line with the criteria for project success. When it comes

to project success a confusion in the objectives is seen and success of project management.

Example for illustration purpose is of a budget the project profit margin which becomes

contradictive and confusing. Lastly as all criteria are difficult to measure for comfort of

measurement as some require short term perception, some require long term perception and, it
might be difficult to record the overall perception of stakeholders (Munns & Bjeirmi, 1996).

Baccarini (1999) proposed that successful project management leads to project success but to

prevent the failure it is not capable. Moreover, the project team should not give the control to

decide the fate of project success which on the overall project are spending relatively lesser

amount. It is relatively tough to accomplish success of a project as compared to the success of

project management, as over a wide range of time success spreads its wings and outside factors

also effect it as well (Cooke-Davies, 2002).

All the authors researches proved that a multifaceted terminology what a project success is

which as explained by different researchers and comprised with different criteria. To give

importance to the project success criteria this lead on to the development of different structures

and their interconnection (Shenhar & Dvir, 2007).

Illustrated and explained the structure and interconnection among the criteria of project

success. Three levels of management within a company was explained through this structure. For

the highest level of hierarchy within an organization survival was the main point of concern. The

higher level of success related with success criteria are connected to this level. Discussing the level

lower to it, at the middle level of the management are anxious of the profitability of an overall

projects and organization. Hence, both monetary and organizational at this level overseen the

benefits. In Management hierarchical level moving on to further lower, to achieve day to day

operations and short-term project goals are the main concern (De Wit, 1988). Presented the view

that success criteria are comprised in the different life cycle of a project (De Wit, 1988). According

to the researcher success is somewhat influenced by the economic climate of an organization (De

Wit, 1988). Researcher study clarified with respect to different stakeholders involved and its
interconnection with success criteria, during and within a project, giving a shape of one structured

item (De Wit, 1988). The model illustrated by the researcher is very broad outlook and intangible

nature and has very limited practical use (De Wit, 1988).

De Wit (1988) proposed the deficiency in the model which was filled by Westerveld (2003)

and further improved by Westerveld & Gayá Walters (2009) where a Project Excellence Model

(PEM) framework was developed, which help the assessment of the concept of project success.

Shenhar and Dvir (2007) rejected the PEM by Westerveld (2003) as different stakeholders with

respect to different timing could not be evaluated, according to Shenhar & Dvir (2007) which is

very important success criteria.

To assess the concept of project success then came up with another framework with five

dimensions/constructs (Shenhar & Dvir, 2007). Project impact were included in these constructs

which had impact on preparation for future/potential for future projects and on project efficiency,

team, business success and customer impact on the customer/satisfaction. along with these project

success criteria stressed with respect to the context of a project on the addition of other success

criteria, with respect to the time frame which might be different (Shenhar & Dvir, 2007).

10 project success factors which they called the Project Implementation Profile (PIP) were

identified in their important study on project success (Pinto and Slevin, 1987). In the Project

Implementation Profile one of the criticisms is that project manager’s competence is missing

(Turner & Müller, 2005). Later studies compounded this omission that project success is not

significantly affected by personnel factor (Pinto & Prescott, 1988). In the absence of competent

project managers and project teams these results tend to suggest that projects can succeed. Though,
the personnel factor is important are showed by a number of studies (Pinto & Covin, 1989).

Researcher found that smooth working relationship between stakeholders, top management

support, and contractor performance in Chinese construction industry had the highest influence on

achieving the iron-triangle outcomes (Wang & Huang, 2006).

The concepts of project/product success and project management success, researcher came

up with the Logical Framework Method (LFM) with a vision of separating them both (Baccarini,

1999). The successful application of processes involved in the project is more inclined towards

Project management success, meeting the triple constraint are usually referred in this scenario,

dependent on equally two major concepts is the success of end product, explicitly project product

and project process (Baccarini, 1999).

The model proposed by Lim and Mohamed (1999) is very similar to the model by Baccarini

(1999) which explains the project overall life cycles till the implementation phase and throughout

the timeline.

Researcher illustrates that irrespective of the failure of project management practices

product’s success can be achieved. Also, the project management practices performed may be

successful and a product could be a failure resulted after the implementation of a project

(Baccarini, 1999). Researcher gave less importance to over the project management success over

the product success (Baccarini, 1999).


The successful implementation of the triple constraint envisages project management

process, which in the execution of project indicates the efficiency (Pinkerton, 2003). While, the

successful end product is envisioned by product success. Illustrated that success of both are

interlinked project management practices and product. Though, same will be the case with project

if the venture undertaken is a failure (Pinkerton, 2003).

2.2 Risk Management

Risk is defined any outcome that may cause a loss as a possibility of an uncertain event.

We can say uncertainty is something not knowing about the future and when there will be high

level of uncertainty chances of risk will be more (Crane et al., 2013).

when an event happens of unsure nature, the project’s iron triangle is affected by it i.e.

which may be positive or negative effect on scope, time and budget and such events are called

risks. Risk which can have multiple shocks due to the reason risks can be of multiple nature. A

possible reason always exists, or the likelihood of threats or opportunities due to the potential

events have been assumed earlier (PMBOK, 2013).

Risk conditions is known as in an organization’s surroundings features that are the main

affects add to the project risks.

Unknown and known Risks

In every industry uncertainty is present in every type of projects, risk affects every project

but their nature and strength may vary there are two types; unknown and known risks. The known

risks for which the response planning is very easy these are those risks that have been identified

and analysed. To contingency reserves risks are assigned and when efficiently and proactively the

organization cannot manage them. Type second is i.e. to management reserves unknown risks are

assigned (PMBOK, 2013).


Overall project risks and individual level

Risks have an impact on an individual aspect are known as individual risk of the project

while when the project outcomes got impact from risks are known as overall project risk. The

individual risks combine overall project risks and therefore the overall project risks uncertainty is

higher. “It represents the exposure of stakeholders to the implications of variations in project

outcome, both positive and negative” (PMBOK 2013).

Risk Attitudes

With different attitudes risks of varying impact degree are dealt and every type of risk in

different manner is dealt by every organization. By every organization a certain type of risk is

accepted and on the ‘risk attitudes’ depended by the other parties towards those risks. On the basis

of some features these attitudes are biased and subjective which are characterised into the

subsequent ideas:

- Risk appetite: how the uncertainly will be re-compensated or the possibility of a reward is

looked by the organization.

- Risk tolerance: At what level the risk or uncertainty will be tolerated by the organization.

- Risk threshold: a line is drawn by the organization and if below that line the impacts of the

risk or uncertainty, the risk will be accepted and it will not endure the risk if above that

line.

Negative and Positive Risks

From which the project can benefit are the positive risks are as known as opportunities and

which affect the project with a loss or a bad outcome are negative risks and are also known as

threats. With the project plan an organization may go forward if within the range are the risks that
may be achieved and managing those results are in line with the outcomes, with the results which

are achieved (PMBOK 2013).

2.2.0 The role of Risk Management

Risks impact performance of any organisation in

 Short term – operations related

 Medium term – tactics related

 Long term – strategy related

The requirements of ISO 31000, Enterprise Risk Management and an organization long

term aims are set by strategy for 3 to 5 years which are the strategic planning. Tactics is explained

as the process of how an organization will attain change and maintain its existence. Thus, tactical

risks are the risk related to acquisitions and product developments, projects and mergers. In an

organization the routine actions are the operations.

The most integral and essential component of the strategic management process in any

organization is known as Risk management. The organization systematically in this process deals

to the tasks with the risks associated. In any organization a risk management process must be risk

balanced, bread and comprehensive in the scope, in the daily tasks and responsibilities are

ingrained on same terms as activities of corporate level, forceful towards altering needs and

responding quickly for the organization and project in order to be successful (The requirements of

ISO 31000 and A structural method in Enterprise Risk Management).

After assessment of those risks is the center of risk management application of desired

responses to such risks. The reason behind risk management is to achieve value of the deliverables

and tasks of the organisation and project at the maximum. Which ones affect negatively and which

factors positively affect the project or organisation which helps to add to the knowledge. For the
achievement of the organisational goals, the probability of failures is diminished, risks of negative

in nature and level of intensity of uncertainty as well and the probability of success is improved

for the successful achievement of project.

Context for risk management

The strategy successful implementation and growth within an organization, the process of

risk management should maintain steady by the organization. Every risk that the organization face

during the life cycle of the project or programme should be dealt with a methodically. The

organization may be getting disadvantage or advantages there is a probability of such conditions

in all types of tasks and actions.

Risk aware culture

In Project management Risk management is an integral part, authorization, control,

direction and assurance must be included into the organizational culture from the top management.

Through entire organization, should convert the planned, strategic and operational goals into

strategy for risk management and should be allocated against the risk management. At every stage

it must endorse operational capability and ‘performance measurement, accountability, and reward’

rank by supporting these indicators. Developing a high-quality risk aware culture can be attained

by an organization by assigning suitable protocols, risk architecture and strategy (The requirements

of ISO 31000 and structured approach to Enterprise Risk Management).

To keep and sustain the process of risk management a well define structure and a body of

knowledge are important to be implemented. The ISO 31000 provides the same structure.
2.2.1 Financial Risks

Finances is a key part of every projectized organization. The human development will not

function without finances and financial needs revolves around the spectrum of life. The basic

financial risks to any organization are available funds, assets and budge matter, and return on

investment (Saleem & Abideen, 2011).

Financial risks study explains that growth in markets and product globalization the market

contributors have lifted the concern similarly by the universal financial reporting controllers. The

volatility has increased around the globe for stock returns has also been an alarming situation in

the previous years (Kothari, 2000). There are less number of design tools and techniques which is

the cause why the bankruptcies of business have increased in the earlier time period (Stiller &

Joehnk, 2014). A market place where people respond to the events around them are the financial

markets and the results themselves are affected by their actions. Researcher suggest where risk is

most exposed to non-profit organizations consist of seven key areas (Bertrand and Brown, 2006).

Fraud

Bertrand and Brown (2006) suggest that, with numerous ways fraud can be dealt.

Employees of the company as well as the people outside can commit fraud or taking away a

company’s assets/ resources i.e. to the company in any way these people are not related. Can steal

stock and office supplies by any associate, whether in the company having on a high position or

on a small position, misuse asset, spending account may increase, shell corporation may create or

the work may charge by the company and may not have done any tasks. The company can be

overcharged by a person from outside for service/products, fake products are sold or to spend their

money by convincing the organization to spend in the wrong place.


A phenomenon which is included in fraud is the identity theft. To increase funds some

companies, use other companies’ logos and names. In such scenario, can be sued for such an act

the company committing fraud and in such case, to protect the companies’ legal registration and

trademark system is in place. A brand name is the ownership of an organisation, to pirate the

products or services or another company might steal it in the case the chances are very low (Carter,

2004).

Funds Misuse

The social service organizations are given grants which are accompanied with a set of rules

and regulations which must be followed by the parent organization. Those assets in a way which

the funding agency has not granted permission to spend, if in any case the organization has done

this comes in funds misuse and to withdraw the funds the agency has the right or the organization

may stop support in future projects. An organization is faced by legal actions if found in misuse

of funds (Bertrand & Brown, 2006).

Tax liabilities

Non-profit organizations in many countries are not responsible to pay taxes, which they

must pay are a few taxes in account. There are compulsory Tax regulations and in case taxes are

not paid, the authorities fine such organization (Bertrand & Brown, 2006).

Charitable regulations Noncompliance

Their charitable organization status may be lost by the non-profit organisation on any cause

other than charity has their money have been spend. In such case the parent organisation is also

liable to pay taxes as well (Bertrand and Brown, 2006).


Investment exposure

For every organization differ in its types and sized of investment; funds have by the large

companies and cash is only used by the smaller orgainsation. Check and balance of these funds

needs to be kept which by regulation can be fulfilled by a suitable investment policy through which

financial decisions and investments are guided (Bertrand & Brown, 2006).

Activities for Fundraising

Financial risks are main concern for the fundraising activities as it has costs for the event

as well as there is a risk to achieve the cost of that activity/event and for future investments that

whether the certain activity may or may not have sufficient funds.

Loss of physical assets

In any organization are at risk of any hazard which is associated with all the physical assets.

In the present era, on computers all the data is stored and digitized. Organizations are at a risk of

losing all their stored information and data in case of any flood, fire, technical difficulty or any

other natural disaster event. the tangible assets of the organization may also get affected by such

natural disaster events (Bertrand & Brown, 2006).

2.2.2 Legal Risks

In defining legal risk two dominant approaches are significant (Moorhead and Vaughan,

2009):

i. legal consequences are associated with the business risks. The costs of actions of

legal risk is which are the companies or organizations to be credited.

ii. The initiated risk from legal uncertainty and legal work product.

Legal consequences are further expanded by other definitions which are intra-

organizational culture and reputational concern.


Legal risks look above has a broader definition of the law conformity to an extra marketable

and ethical requirement; by the stakeholders a long-term business arrangement. To legal forces the

companies are labelled as sharp or aggressive in their approach and also in reputational and cultural

understanding. Legal risk are considered to be not visible it may affect the reputation and also with

financial loss sued by an individual or a company (Moorhead and Vaughan, 2009).

2.2.3 Management Risks

The most common project management challenges are five in number which are mentioned

as (West, 2014).

i. Project teams with geographically dispersed

Project teams are working in different locations or cities in many organizations but by these

teams’ collaboration projects become a joint effort. Naturally team members combine to become

a project team and there are a lot of cases when multiple combines are combined to work as a

whole. When the associates of these teams are in different locations management becomes

problematic which results in a confusion on tasks and goals or communication difficulties.

By online based programs this problem can be tackled as people are now working online

in the whole word. Data can be easily being accommodated by synchronizing apps and websites

and within fraction of seconds keep it up to date. In two different time zones if a same company is

working, they can upload the progress by login to their website and thus in smooth functioning of

the project which creating fewer difficulties. Synchronized process that the organizations or

companies keep are growing in the project management spectrum as related to their rivals.

Accountability and transparency to the clients is also be created through this process.

ii. Using the wrong tool for the job


The most widely used applications for projects are Microsoft Project and Excel in most of

the companies. these applications have a core benefit that sharing information or data with large

parties is easy. Through online sources like Dropbox the files may be emailed or shared or may be

sent on an online network were authorized parties could view it.

By using these applications there are few common concerns:

- Recommendations and changes on the same file cannot be made.

- By sharing every new file, as which file is the latest version the parties will always have

issue to understand.

- Issues may have in finding by the team member whether the same version they are viewing

of the file or not.

- When a new version is created the data becomes outdated.

- Sharing can become difficult because Projects change hourly.

To fulfil purpose, as to who can make what changes and who can assess what there should

be a web based solution where the files assessed by people should be given authority. The authority

should be given to the concern people to make where the changes should be incorporated or any

comment, bookmark or highlight any issue. Less confusion will be provided by a centralized

database and make more transparent the whole project for all the parties concerned.

iii. Mismanaged capitals and Over booked

Different requirements are associated with every project and with the capitals required in

the project the project team members may not be up to date. The supply may exceed as compared

to the demand for assets either be technology or funds, manpower or raw material. MS Project or

Excel is used for this purpose. Regular meetings are conducting by some teams on regular basis to
tasks identification and distribution where as some might hold weekly or twice a week meeting.

As to the fast the pace the pace of the surroundings matters, in the tasks more will be daily changes

and schedule of work. If once a week the team members will be assigned for their tasks, will not

work for them a fast pace working setting. For slow pace work weekly meetings are suitable and

twice a week or daily meetings are more suitable for fast pace work settings.

Where the project teams are not centralized using Excel in an environment can become a

challenge because this can become awkward as Excel has spreadsheets. MS project should be used

for best results and advanced software nowadays are used to accommodate multiple projects like

primavera.

iv. For project documents and resources wasting time looking in them

Which project includes project management plans registers, changes, emails etc should be

documented. For safekeeping these documents need to be stored somewhere and for the future

consultation. A network database is practised in many organisations. That in the time of need most

of the companies face this problem, due to the files not being organized the required document

cannot be found in an orderly way.

While working with third parties another critical challenge for an organization is such that,

the information sharing is critical. Dissimilar teams, separate offices, organizational politics,

communication gap, privacy concerns are few reasons. Something with which organizations are

not comfortable with are providing the access of network to third party. As a result, to email the

documents required by the third party the project manager or project officer is given the duty.

Web-based project management software with different sections can be a solution for this

dilemma. As to who can assess a particular section every section can be given certain access.

v. In status meetings spending too much time


During the project execution process, a project team has a major complaint is that in the

updates of the project a lot of time is spent and the execution tasks are given fewer importance.

Integral for tracking are the status meetings, due to the constraint of time many projects fall behind

due to not needed meetings. To give task updates in many scenarios the team members go to the

project manager. In some case the project manager wants some updates and ask the team himself.

In both the mistake is that the too much time updating the project is spend by the project managers

on MS Project or Excel but the real focus should be concentrated towards ‘higher level project

thinking and its concerns or other projects management.

Same as for the pervious issue the solution for this dilemma; there should be an online

software web base. Will update their tasks on that software by every project team member.

Database of online information will be managed by this way and on updating the project the project

managers will not be putting their efforts. Not only on the part of project manager this is also a

cost and time effective method for the project team.

2.2.4 Market Risks

Market risks are the most recognizable of all risks according to Investopedia. The everyday rise

and fall of stock prices is also known as instability, market risks. Instability mainly affecting the

bull and bear markets is an effect of limited market forces. When the prices of stocks are falling is

Bear market and is when the prices of stocks are rising is bull market. Volatility, also mentioned

as instability, in the market risks is a risk measurement instrument. Rather than its performance it

has to do with the nature of the investment. The more uneven the investment will be it is necessary

for returns and, in either bull or bear market is expected the changes for a vivid change.
Market Risks types:

different types of market risks are face by Every industry depending upon the work of nature and

the rivalry in the market but all types of industries are affected by a few market risks. Every

industry is affected by few risks which are; target market, promotions, pricing and research and

development.

Pricing

Pricing is the key component of marketing and the pricing strategies are made for the

company’s position and brand name. On providing value to their products many companies are

more focused on creating strategies of high price. May have a disadvantage of having a reputation

of selling products to those companies who sell on low prices or services of less value whereas a

clear disadvantage if their product’s value does not add up to the price to the high pricing

companies.

Target Market

Can cause huge disadvantages to the company by targeting the wrong type of individuals.

With a specific set of people in mind a product or service is designed and can take a company into

loss if selling a product or a service to the wrong market. Not just it will lose customers but its

value as a brand that if a company targets the wrong people.

Research and Development

Research is conducted before a service or product is launched in the market. On the basis

of this research the pros and cons of the chosen service or product are listed. But the process of

conducting a market research is expensive. All the money spent in the market research will be

wasted if the results of the research are not required by the company. In order to get the reliability
of the results companies also have to market research on different and several sectors of population.

Can cause more waste of money if research and development invested only one segment of

population.

Promotion

In order for their service or product to be successful every company needs promotion which

is done by the product or service advertising. Every business/ organization/ company either big or

small this is the most cost consuming activity. If the advertisement is focused on general market it

can be a huge risk for a company’s rather than the market which is targeted because the company

will not gain any customers as it will not make any impact. If advertisements are not making any

impact on the audience adverts or promotions go of waste. Similarly, offending the audience by

making inappropriate adverts is another risk that companies may face and the brand name of the

company can ruin its reputation.

2.2.5 Political and Policy Risks

In order to know to stop the same situation happening in the future how to respond when a

certain situation occurs so for such situation organization require Policies. Why an organization

should make policies there are seven integral reasons (Bertrand & Brown, 2006):

i. For the organization policies set boundaries and decide in certain situations which actions

are necessary.

ii. When polices are defined the company tasks are taken more seriously by the employees.

iii. Roles and responsibilities are defined by policies of the employees of a company, clear the

lines of communication shall clear and for employees’ actions make them accountable.

iv. A management structure, as Policies define making ‘what’ and ‘how’.

v. Can be ensured steady quality control.


vi. Policies forms directions, values and beliefs.

vii. Polices better regulated through Volunteer acknowledgement.

Which affect the organizations for that there are three types of political risk; international

specific risks, organization specific and state specific (Political risk assessment and Management,

2011).

Firm specific-political risks:

The multinational and local organizations politically when affected are known as micro

risks which are ‘at the corporate and project’. Governance risks are those which affect the day to

day activities of a firm. A vital political risk for multinational organizations can be foreign

exchange.

Country specific-political risks:

Affect the organization which is working at country level in which the risks are caused

these are also known as macro risks. Into two categories are divided; risks transfer and risks

cultural and institutional.

Global specific-political risks:

Multinationals working in different countries are affected by these risks when situation of

international politics exist. War, terrorism and political instability are some common examples.

2.2.6 Technical Risks

It has some background when a project failed due to some failure with respect to some

technical aspect. The failure on behalf of a technical risk cannot be judged without prior experience

of a project manager. When the technical team is faced with a unique challenge it creates more of

uncertainty in the project (Branscomb et al., 2000). An uncertain event occurring in technical risks
and project manager is able to calculate the probability, effortlessly the risk can be managed. ‘the

absence of enough information defines uncertainty and to forecast the outcomes of a project’. That

risk can damage the projects which have a distinctive feature of risks and uncertainty to them while

for the project uncertainty can add opportunities. Clearing uncertainty Risks can be removed.

How people manage different issues as these risks include prediction so technical risks are

not easily identified, apply in reality by solving technicalities on paper. Laws of science on which

technical risks are dependent on and on environment and people, so it makes them disorganized.

To each other elements are interrelated. To measure technical risks there are two main methods;

probabilistic methods and anchored scales.

2.2.7 Environmental Risks

‘soil or biological food chains, transmitted through, the air, water, to man’, environmental

risks which are caused by many factors. Into two main categories environmental hazards are

divided; manmade and natural. Interact with human activities are the natural processes and they

are affected are called disasters and humans have very less control on such natural disasters.

Floods, tremor, climate change, storms, forestry fires etc are few examples. What can be done is

to prepare an initial response system in case of natural threats and likelihood of the occurrence of

the hazard awareness so men are prepared for it when it strikes, (Whyte & Burton, 2009).

Causing pollution and due to advancement of technology, chemical spills, faults in

infrastructure etc are some causes of manmade hazards. In most cases as they have a slow but long-

lasting impact due to the effects of manmade hazards. Manmade hazards are more severe in terms

of safety of mankind and health. On a macro level a common example is of ozone layer depletion

and degrading health and new diseases affecting 1 in 10 individuals on micro level on everyday.
Diverse are the hazards related to environment which may cause different types disease

like skin cancer, sun burn etc global warming is also a dangerous phenomenon which eventually

affect the climate which will result in increase in temperature and melting of ice. To these risks

any segment may not be directly related common example is mismanagement of resources which

every person around will be affected. This results in total disaster and each segment will affect by

this type of risk.

2.2.8 Social Risks

People in need, poor people and segment of the society living with the basic necessities of

life is called social risk management. To modify their attitudes towards hazards its focus is to help

the poor and weak part of socity, exit poverty and lower their vulnerability (Sener, 2015).

To reduce the impact of a hazard or risk before it occurs risk coping, risk prevention and

risk mitigation strategies are utilized. Under the title of risk management there are various projects,

all over the world have been functional. “These projects’ aim is declared as not only helping the

poor to deal with diverse risks but also encouraging them to engage in higher risk, higher return

activities” (Sener, 2015).

2.2.9 Importance of Risk Management

Which affect the projects can be distinguished beforehand by using a tool from which the

‘political, economic and legal’ factors identified are provided by risk management. For every

organization planning risk management is different as every organization setup is different and

which makes every risk a challenge to tackle. The risks affecting an organization to get a better

knowledge of risk, should be made by ‘conducting surveys of present situations’ for better

understanding for ‘the potential areas for improvement’.


For organization the primary purpose of risk management is to make sure that smooth

functioning of tasks. The threats and opportunities affecting the project risk management is

basically to handle it and to avoid threats or negative risks or form a ‘value chain’ to get the

opportunities or lower the risk impact. Any project is affected with risks on any level either be

high or low it may not completely eradiate all the risks. As much as possible to avoid the impact

on the project the project managers should look upon the areas where the risks can be contained.

Into every organization’s policies risk management must be incorporated and in the planning phase

of the projects especially strategies.

The two key areas which are integral for the planning risk management are strategic risk

management and operational risk management. Associated with the strategic risk management are

the policy and risk culture. Operational risk management which has three phases; risk

identification, risk assessment, risk response.

One should observe the risk management process to make sure the quality and for the risk

management plan implementation.

Especially economically and financially risk will always affect organizations. the reason

behind the conducting and implementing risk management is to impart necessary knowledge.

The risky situations how organizations manage it and to look in the success of projects the

costs it follows is the most integral part as well as whole success of an organization (Stiller &

Joehnk, 2014).