Introduction
The United States is ranked third in the world’s population; thus strengthening its human resource and the economy in particular. The US is one of the world’s oldest democracies and this gives it a chance, to participate in the global political arena. Being one of the permanent members of the UN Security Council and also a member of the G 8; the US stands a better chance in solving global conflicts (Ashton 1984). The existence of historical conflicts between the Middle East countries like Iraq, Iran, Korea, Pakistan and Afghanistan among others; threatens the US security stability. This conflict has arisen due to the terrorism claims of the Middle East countries, the petroleum oil resources and also the support of Israel at the expense of Palestine. This enmity of the US with the Arab countries has put the US security status at jeopardy (Ashton 1984). The US ballistic missile control has been in operation since the 1990s; after which the US has invested a lot of money in the defense department so as to ensure the maximum security of its citizens.
The installation of the automated mobile defense systems (AMDS); is a very technical and expensive project thus requiring maximum government commitment and resource usage (Ashton 1984). In this case informed decisions are to be made in order to come up with the best strategy, in conducting the construction exercise. Since this is a very profitable tender, company X has to ensure it conducts the work perfectly; so as to win the rest of the tenders to be offered (Ashton 1984).
Potential risks
The market failures being referred to in this case include the changes in market trends; which may include the increase in price of materials required during the construction of the AMDS. Another form of market failure is uncertainties in the supply of materials. Market failures may lead to loses and also delays in the construction work, which will lead to increasing costs of construction thus causing loses to the company (Steve 2007). In this case technical failures include; misappropriation in the technology used in the construction work, and also failures caused by inefficient engineers. The lack of proper technical planning; which may lead to the failure of realizing the targeted objectives of completing the construction in time; and executing the work as required. In this case the success of the project needs the application of the most efficient human resource available to the company (Steve 2007).
The time allocated to this company is limited; where any delays may lead to the contracted project being withdrawn. Based on the fact that this project is capital intensive; the company needs to mobilize adequate finances before the onset of the project to ensure the construction work is executed as planned (Steve 2007). In this case human caused accidents may include; the failure to follow instructions in handling materials or the failure to wear protective clothes; which is because some of the materials to be used in the construction of the AMDS units are explosive or poisonous. In the effort of avoiding these accidents, full care should be taken in the handling of materials during the construction process. On the other hand; natural accidents include earthquakes which are very rampant in some parts of the US; wind storms and torrential rains. These accidents may cause delays in the construction process; where other effects of the natural accidents may include; death to the employees within the company and also the incidence of the destruction of property, thus causing a great loss to the company (Steve 2007).
Ways of combating the Risks
In this case, the risk management by project X involves the identification, assessment, and prioritization of risks which are likely to face the project. The coordination of resources and the economical application of resources should be employed; to minimize the control and monitor any loss due to the occurrences of risks (Steve 2007). Based on the discussion; there are a number of strategies which project X can apply to anticipate, adopt and also recover from any loss due to the occurrences of these risks. For instance in the case of market failures whereby the prices of the raw materials are expected to hike; project X will have to purchase the materials in advance and if this is not possible, the extra charges can be forwarded to the DOD. Another strategy which can be applied during project X in avoiding the risk is also another strategy; where the execution of project X can adopt to cope with any threat. Accidents and loses which may be caused by natural factors like torrential rains and the wind storms; can also be avoided by carrying out a compressive monitoring on the occurrence of this scenarios. The use of meteorological data can help project X to plan its work; where in this case project X can plan to do the construction work during the times of favorable weather (Steve 2007). For instance, risks due to credit short comings can be reduced by ensuring that before the work starts, the company has enough financial resources. In this case the project will be able to avoid delays caused by the government in disbursing funds, where the company can use its funds or take loans earlier; thus avoiding uncertainties within the operations of the government sources (Steve 2007). Further; the company is bound to be very keen in prioritizing the risks; which will ensure efficiency in risk management. In this case the risks with the greatest magnitude and those with a great probability of occurring should be handled first. As a result, this will save the company time and finance thus increasing its efficiency and profitability; since less destructive risks will not consume unnecessary finances in forms of losses (Steve 2007).
Integration of Risk Management with Success of the Project
This knowledge on risks will help increase the quality of services and thus build a good company reputation. With a full knowledge on risks; a company will be more cost efficient and thus will boost their profit levels. Further, with a good reputation the earnings of the company will be increased; since it will be able to secure more tenders thus being able to sail within the market (Steve 2007).
The risk management by project X is very essential for the success of building up the AMDS units. (Steve 2007).
Conclusion
Having discussed the issues and variables to be involved in the current project within the current project; in the case risk management strategies are employed in carrying out project X; the company will be able to meet its objectives in constructing the AMDS units as required and within the allocated time. As a result, this will help build its good reputation and be able to win the tender of building the remaining 150 AMDS units. This further explains that any project can’t be successful without a concrete and a well planned risk management.
References
Ashton, C. & David, N. (1984).Ballistic Missile Defense. Washington, D.C: Brookings Inst Pr.
Steve. & Andrew, G. (2007).Continuous Integration: Improving Software Quality and Reducing Risk. New York: Addison-Wesley Professional.