A risk may be defined as an uncertain and unpredictable occurrence that can have either negative or positive effects on a particular project (Lientz, 2011). Inadequate risk management can have far-reaching consequences on a project. One of the most significant consequences of projects risks when mishandled is poor user adoption of new methods and technologies (Lientz, 2011). A host of other manifestations of poor risk management exist and there are serial issues in project management that are avenues for failure. Case in point is lack of procurement and quality maintenance processes. Both negative and positive risk implications are worth close scrutiny to ensure their overall impact on the project is tremendous.
Lack of appropriate procurement processes leads to a variety of short-term results such as unnecessary spending and failure to understand the contract requirements (Lientz, 2011). The contractor may be unable to acquire the materials they need to deliver their goods or services. Alternatively, there may not be enough time to examine the materials carefully, the consequence of which may be low quality results. In the long term, poor procurement causes reduced profitability of the company in question, as well as a tainted image and substantially fewer future prospects (Lientz, 2011). Weak procurement mechanisms are closely associated with lower quality or products and services (Lientz, 2011). For instance, a procurer may choose raw materials in a rush, ending up with low-quality ones in the process. Consequently, their product will reflect the low quality raw materials.
Delegate your assignment to our experts and they will do the rest.
Negative and positive risk plans are ways to dealt with adverse and constructive risk respectively. In the former, it is recommended that one eliminate the threat completely. One may also manage risk by transferring the risk to another involved party, mitigating it to prevent a reoccurrence, or accept its consequences as they come (Lientz, 2011). In regards to positive risk, one may exploit them as an opportunity, increase the extent of its impact, and transfer it to a third party to exploit it further (Lientz, 2011).
In conclusion, risk is not preventable. However, it can either be positive or negative. The two categories have opposing impacts on the company. It is important to understand the risks associated with such crucial company processes as procurement. Doing so reduces the extent to which negative risk may affect the organization while increasing the impact of positive risk.
References
Lientz, B. P. (2011). Project risk management. Information Technology Project Management, 223-239. doi:10.1007/978-0-230-34500-3_12
