Running head PROJECT MANAGEMENT.1PROJECT MANAGEMENT.2.docx

Running head: PROJECT MANAGEMENT. 1
PROJECT MANAGEMENT. 2
Project management process is a crucial tool in the development
of any organization. This is because the projects that the
organization deploys determine the business clientele. Critical
analysis of the project management process is paramount to the
successful execution of these elements within an organization.
In the case of introducing the California Coast Credit Union
into the San Diego State University, there are five crucial
processes that should be adhered to in order to ensure the
project’s success.
Initiation
During the initiation process, the eligibility of any relevant
projects available is checked so as to validate the feasibility of
the project plan. Once the project plans have been presented and
the feasibility checked, the selection process is then initiated
based on the requirements that each individual project would
require. The project manager and the project management team
then sign off on the requirements of the specific project
selected.
In this case, the DBSI team was selected for the implementation
of data signage procedures that are to be introduced within the
student’s hub of the San Diego State University. It is during this
stage that the appropriate team members of the project are
identified as well as the project leaders. Selection of the project
leaders is crucial to the next stage of the project management
process which is the planning process. Furthermore, the ideal
environment for the execution of the project is also identified so
as to propagate an approximate orientation as to the next stage
of the project plan (Making Waves with Digital Signage, 2014).
Planning

The next stage of the project management process is the
planning process. The planning process is crucial in the
intricate addressing of the project requirements so as to
effectively kick start the project. Once all the project
requirements are identified, the project planning can then be
able to cultivate procedural steps in the implementation of the
project. The project requirements are aligned with the project
objectives or the elements that the project hopes to achieve. The
specific objectives of the California Coast Credit Union by
introducing data signage in the San Diego State University is to
create an interactive forum where the students would be able to
relate to the credit union, create a specific brand that would
advocate for reliability and accessibility, and finally create and
more engaging foot traffic among the thirty thousand students
operating the campus (5 Basic Phases of Project Management,
2016).
The planning process also involves the scope of the project in
terms of its relativity to the actual services that the project
hopes to provide. The scope would entail prospects such as open
air digital designs, using the ideal equipment so as to utilize the
available technology and presentation of the right content in an
entertaining forum. Moreover, the planning process also has to
take into consideration the implementation timelines of the
project. Most managers offer short viable projects so as to
assess the productivity of the project within the appropriate
period. The implementation of the project was estimated to be
two months as per California Coast Credit Union’s timelines. In
addition, the project’s approximate budget should also be
discussed during the planning process so as to facilitate the
proper schedules and resource allocation factors.
Execution
The execution process is the most essential part of the project
management process as it entails the actual implementation of
the project’s goals and objectives. During the execution
process, individual assignments are handed out to the relevant

stakeholders and participants of the project so as to ensure that
all the essential prospects of the project are actually taken care
of. As the introduction of digital signage in the San Diego State
University is mostly focused on video brochures, videos and
interactive tutorials, specific tasks would be assigned to
different stakeholders. This is to ensure that the specified
elements related to the implementation of the project objectives
are covered. These elements incorporate things such as the
designs, the construction of the relevant structures, the relevant
equipment used in the operation as well as the digital
technology strategies that can be applied. Besides, as the digital
signage incorporates awareness to the students, the content and
content sharing strategies are also assigned to specific
individuals not to mention the copyrighting and the graphic
designs applied to the digital signage.
The execution also entails keeping track of the detailed project
progress through regular updates on the project. Regular
updates ensure that there is constant progress in the project
implementation thus a preferable update process would be a
daily or weekly update plan in all the relevant prospects as per
the drafted project plans and schedule.
Control and monitoring
The fourth process in the project management process is the
control, monitoring and validation of the projects successful
implementation. Control and monitoring should involve the
adhering to the selected project plans so as to make sure that
successful implementation and running of the project is done.
Monitoring the updates can ensure adherence to the project
plans by the respective stakeholder in the project (5 Basic
Phases of Project Management, 2016).
The control and monitoring process also entails the quality
assessments through assurance test plans. These assurance test
plans validate the quality of the project work and delivery as
applied during the implementation of the project.
Communication plans are also relevant in the control and
monitoring process as they ensure that the right information is

passed along to the relevant recipients such that there would be
coordination in the implementation of the project.
Closing
The closing process is final phase of the project management
process and a project management professional or a team of
professionals, should conduct an evaluation of the entire project
so as to validate the project. Evaluation of viable projects
usually indicate little or no error during their assessment.
Nonetheless, the identification of mistakes by project teams
typically indicate that there is a problem with the project and
that specific elements of the error need to checked in order to
fix the project into a viable project. Assessment of the timelines
involved in the execution of specific project plans is also
crucial to identifying any possible errors in the project (Making
Waves with Digital Signage, 2014).
Effects of PMP on team members.
Team members benefit a lot from the execution of project plans
that they have been assigned to. The team members get a chance
to put their relevant skills towards the successful execution of
the project. The team members also get a chance to learn
effective communication skills as from the formulated
communication plans relevant to the project. Furthermore, the
involved team members invoke their creative and capacitive
skills in their normal work designations by creating more
innovative ideas that would help in the overall development of
the organization.
References.
5 Basic Phases of Project Management. (2016). Retrieved on
August 19th 2016, from
www.projectinsight.net/project-management-basics/basic-
project-management-phases
Making Waves with Digital Signage. (2014). Retrieved on
August 19th 2016, from
dbsi-inc.com/true-stories/digital-signage/true-story-california-
coast-credit-union/

Chapter 1
Risk and Its Treatment
Copyright © 2017 Pearson Education, Inc. All rights reserved.
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Agenda
Definitions of Risk
Chance of Loss
Peril and Hazard
Classification of Risk
Major Personal Risks and Commercial Risks
Burden of Risk on Society
Techniques for Managing Risk
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2

Definitions of Risk
Traditional Definition of Risk: Uncertainty concerning the
occurrence of a loss
In the insurance industry, risk is also used to identify the
property or life that is being considered for insurance
In economics and finance:
The term risk is used in situations where the probabilities of
possible outcomes are known
Uncertainty is used in situations where such probabilities
cannot be estimated
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Transparency Master 1.2
Loss Exposure: Any situation or circumstance in which a loss is
possible, regardless of whether a loss occurs
Objective risk is defined as the relative variation of actual loss
from expected loss
It can be statistically calculated by some measure of dispersion,
such as the standard deviation
Subjective (perceived) risk is defined as uncertainty based on a
person’s mental condition or state of mind
Definitions of Risk (Continued)

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Chance of Loss
Chance of loss: The probability that an event will occur
Objective probability refers to the long-run relative frequency
of an event based on the assumptions of an infinite number of
observations and of no change in the underlying conditions
Subjective probability is the individual’s personal estimate of
the chance of loss
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5
Chance of Loss vs. Objective Risk
Chance of loss is the probability that an event that causes a loss
will occur.
Objective risk is the relative variation of actual loss from
expected loss
The chance of loss may be identical for two different groups,
but objective risk may be quite different!

City# homesAverage # firesRangeChance of FireObjective
RiskPhiladelphia10,00010075 – 1251%25%Los
Angeles10,00010090 - 1101%10%
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Peril and Hazard
A peril is defined as the cause of the loss.
Examples include property damage because of fire, windstorm,
or lightening, or damage to your car because of a collision with
another vehicle.
A hazard is a condition that increases the chance of loss
A physical hazard is a physical condition that increases the
frequency or severity of loss
Moral hazard is dishonesty or character defects in an individual
that increase the frequency or severity of loss
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Peril and Hazard (Continued)
Attitudinal Hazard (Morale Hazard) is carelessness or
indifference to a loss, which increases the frequency or severity
of a loss
Legal Hazard refers to characteristics of the legal system or
regulatory environment that increase the frequency or severity
of losses
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Classification of Risk
Pure Risk and Speculative Risk
A pure risk is a situation in which there are only the
possibilities of loss or no loss (earthquake)
A speculative risk is a situation in which either profit or loss is
possible (gambling)
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Classification of Risk (Continued)
Diversifiable Risk and Nondiversifiable Risk

A diversifiable risk affects only individuals or small groups (car
theft). It can be reduced or eliminated by diversification.
A nondiversifiable risk affects the entire economy or large
numbers of persons or groups within the economy (hurricane). It
is also called fundamental risk.
Government assistance may be necessary to insure
nondiversifiable risks.
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Enterprise risk encompasses all major risks faced by a business
firm, which include: pure risk, speculative risk, strategic risk,
operational risk, and financial risk
Strategic Risk refers to uncertainty regarding the firm’s
financial goals and objectives.
Operational risk results from the firm’s business operations.
Financial Risk refers to the uncertainty of loss because of
adverse changes in commodity prices, interest rates, foreign
exchange rates, and the value of money.
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Enterprise Risk Management combines into a single unified
treatment program all major risks faced by the firm:

Pure risk
Speculative risk
Strategic risk
Operational risk
Financial risk
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As long as all risks are not perfectly correlated, the firm can
offset one risk against another, thus reducing the firm’s overall
risk.
Treatment of financial risks requires the use of complex
hedging techniques, financial derivatives, futures contracts and
other financial instruments.
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Systemic risk is the risk of collapse of an entire system or entire
market due to the failure of a single entity or group of entities
that can result in the breakdown of the entire financial system
Systemic risk is especially important with respect to large
financial institutions that are considered too large to fail
without doing major financial harm to the US economy

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Major Personal Risks
Personal risks are risks that directly affect an individual or
family. They involve the possibility of a loss or reduction in
income, extra expenses or depletion of financial assets, due to:
Premature death
Inadequate retirement income
Poor health
Unemployment
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15
Exhibit 1.1 Total Savings and Investments Reported by
Retirees, Among Those Responding
(not including value of primary residence or defined benefit
plans)

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16
Major Personal Risks (Continued)
Property risks involve the possibility of losses associated with
the destruction or theft of property
Direct loss vs. indirect loss
A direct loss is a financial loss that results from the physical
damage, destruction, or theft of the property, such as fire
damage to a home
An indirect or consequential loss is a financial loss that results
indirectly from the occurrence of a direct physical damage or
theft loss (e.g., the additional living expenses after a fire).
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17
Major Personal Risks (Continued)
Liability risks involve the possibility of being held legally
liable for bodily injury or property damage to someone else
There is no maximum upper limit with respect to the amount of
the loss
A lien can be placed on your income and financial assets
Legal defense costs can be enormous

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18
Major Commercial Risks
Firms face a variety of pure risks that can have serious financial
consequences if a loss occurs:
Property risks, such as damage to buildings, furniture and office
equipment
Liability risks, such as suits for defective products, pollution,
and sexual harassment
Loss of business income, when the firm must shut down for
some time after a physical damage loss
Cybersecurity and identity theft by thieves breaking into a
firm’s computer system
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Major Commercial Risks (Continued)
Other risks faced by business firms include:
Human resources exposures, such as job-related injuries
Foreign loss exposures, such as acts of terrorism
Intangible property exposures, such as damage to the market
reputation and public image of the company
Government exposures, such as violation of safety standards

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Burden of Risk on Society
The presence of risk results in three major burdens on society:
In the absence of insurance, individuals and business firms
would have to maintain large emergency funds to pay for
unexpected losses
The risk of a liability lawsuit may discourage innovation,
depriving society of certain goods and services
Risk causes worry and fear
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21
Techniques for Managing Risk
Risk Control refers to techniques that reduce the frequency or
severity of losses:
Avoidance
Loss prevention refers to activities to reduce the frequency of
losses
Loss reduction refers to activities to reduce the severity of
losses:
Duplication
Separation
Diversification

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Techniques for Managing Risk (Continued)
Risk Financing refers to techniques that provide for payment of
losses after they occur:
Retention means that an individual or business firm retains part
or all of the losses that can result from a given risk.
Active retention means that an individual is aware of the risk
and deliberately plans to retain all or part of it
Passive retention means risks may be unknowingly retained
because of ignorance, indifference, or laziness
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Self Insurance is a special form of planned retention by which
part or all of a given loss exposure is retained by the firm
A Noninsurance transfer transfers a risk to another party.
A transfer of risk by contract, such as through a hold-harmless
clause in a contract
Hedging is a technique for transferring the risk of unfavorable
price fluctuations to a speculator Incorporation of a business
firm transfers to the creditors the risk of having insufficient
assets

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For most people, insurance is the most practical method for
handling major risks:
Risk transfer is used because a pure risk is transferred to the
insurer.
The pooling technique is used to spread the losses of the few
over the entire group
The risk may be reduced by application of the law of large
numbers
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