Project management. Project Feasibility and Cost Control. Management Assignment..

Project Management
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Abstract
Project management encompasses various demanding facets that involved parties have to accomplish intricately if the entire project is to be successful. A solid commitment to exploiting the emerging details guarantees the foreseeable future of the project is secure. The entire field of project management or at the very least, its theory, is expansive and thus, beyond this scope of this paper. Nevertheless, there are major concerns that should be given priority and more so, those that revolve around finances and human relationships. These two elements are quite important and influential in the subsequent project operations. In this regard, parties involved will focus on various project dimensions including but not limited to risk management, project feasibility and cost control, leadership and team planning as well as conflict resolution approaches.
Executive Summary
Starting a business in the current volatile marketplace is a very challenging activity. Regardless, entrepreneurs have a passionate zeal to solve the world's problems and more importantly, inspire the upcoming generations. However, they have to take necessary measures to ensure that their ideas come to fruition. Being precautionary means taking a significant amount of time to analyze ways in which potential challenges may orchestrate the downfall of the project. In this case, they will provide a theoretical and detailed analysis of ways of overcoming them. The best measures are realized from having perfect market information. This data is used to ascertain the chances of project success. Financial, market, credit, and social-political risks are all considered and the degree of uncertainty provided. Project feasibility is then conducted to determine whether the market is the need for the services thereof. Onwards, the specific roles of leaders are outlined so that every phase of the project is progressing positively. Besides, conflict resolution approaches are schemed to identify the best way forward before and after disagreements.
Project Management
1.0 Introduction
Entrepreneurs face the most daunting task, which begins from consolidating the necessary resources for their business idea and making relentless efforts so that the business becomes successful. Their work is primarily a trade-off between the risks involved and rewards that will emanate from the venture. Although there are downsides to starting the business, the entrepreneur is motivated and inspired by the possible upside and consequently, associated opportunities that arise. The financial returns in particular guarantee that the entrepreneur can take care of their families, solve their primary life necessities, and endear to make valuable changes to society at large. This discussion centers on three friends, including my biological brother, who have decided to collaborate in establishing a retail wine and spirits shop in a relatively densely populated town, but one that is achieving immense economic growth rate as it is in the major outskirts of a major city.
2.0 Risk Management
Risks are the underlying threats to the success of the business venture. In essence, it is the ability to mitigate against these perils or at least minimize their impact that helps the business thrive in a very competitive business environment. This position is approached through a thorough market analysis where the strengths, weaknesses, and threats of the business and its founders are analyzed appropriately relative to the external environment. According to Gachie (2017, p. 165), project risk refers to "an uncertain event or condition, that if it occurs, has a (positive or negative) effect on at least one project objective.” On the other hand, Gachie (2017 p. 165) defines the risk management process as the “systematic application of management policies, procedures, and practices to the tasks of reviewing, communicating, establishing the context, identifying, analyzing, evaluating, evaluating treating, monitoring and communicating risk." Proper risk management minimizes the chances of experiencing the complexities that arrive with project restructuring. Stakeholders central involved in the risk management are proactively planning in the quest of anticipating and mitigating against any perils that could adversely the venture in the future. This position compels them to be the devil's advocates as they will be concentrating on the wrongs that could happen to the business aligning with the old age phrase that “an ounce of prevention is worth a pound of cure.” Risks come in varying dimensions and thus, the ability to identify them in advance allows the people involved to analyze them as shown in Fig 1 and take precautionary measures to curb them.
Fig 1 Risk assessment chart (Lucidchart Content Team, 2020)
The economic risk remains to be the most primal peril that faces any business. Economic risks encapsulate all elements that are directly related to the financial state of the owners. These elements include but not limited to funding, inflation, repayment situation, and the country’s inconstancy of the economy (Tvaronaviciene and Grybaite 2007). In relevance to this situation, the investment financial risk comes as an essential way of analyzing the level of uncertainty thereof. First and foremost, approximations for the entire project lay at about $5,000. However, the line of thought among the three investors was to have an extra $5,000 to cater for business operations for the following three or four months before they have a more solid analysis of the market trajectory. During this period, they expected that they articulate whether their idea of actualizing the project was a major opportunity in that marketplace. The extra $5,000 would cater to unforeseeable circumstances and other expenses that ordinary business operations would fail to meet. For instance, rental payments, wages, and salaries as well as due credit payments from suppliers.
Funding, which is a vital component of the financial analysis was realized strategically. The initial $5,000 was to be contributed equally from the three friends. The next $5,000 would come from a financial lending institution. One of the three had been a member of a financial lending institution from where they expect a loan of the extra amount. Nevertheless, a strategy stipulating the repayment of the loan from the three people would have to be outlined. In this case, everyone agreed that they would be responsible for the repayments if the business failed. Therefore, credit risk would be a significant obstacle if the business failed to succeed. It exposes them to possible legislations, but then their equal contributions to the course would imply that the burden was never subjected to a single individual. Even then, this formed the greatest risk they were facing. These individuals were convinced that in the course of the three months, they would have reached the break-even point and if not, they would have found other financial avenues to meet them repay their debt.
Fig 2 Grace LaCont’es 5 types of strategic risks (LaConte Consulting, 2017)
Besides the financial side of things, operational risk as one of the five strategic risks (Fig 2 above) was another aspect they considered significant. Operational risks are results of poor modeling, major advances in technology, greed, and complexity of banking and financial commodities leading to the financial meltdown of many businesses (Tandon and Mehra 2017). At times, albeit a number of factors, operational risk is more significant than credit and market risks. Therefore, smart management considers qualitative and quantitative methods to curb operational risks (Hao and Han 2014). In this regard, the necessary internal procedures, systems, and processes should be perceived with a detailed eye ensuring efficiency and effectiveness. This business proposal faces significant operational risks, which could scupper its potential. The variances in this business are minimal allowing for the implementation of appropriate measures.
First, it was important to acknowledge that most operational risks arise from intentional fraudulent activities or accidental human mistakes. It is only in the mitigation of these internal problems that the business would thrive particularly in the beginning stages. The beginning stages matter significantly and since the three had clarity concerning the running operations of the business, they would conduct an effective schedule upon which any one of them had to be physically present in the premises at any period. This way, they would guarantee minimal employee mishaps. They would be robust and ensure that employees conducted their duties responsibly. Secondly, the recruitment procedures would also be conducted thoroughly. Experience would serve as a fundamental requirement because the familiarity with various procedural guidelines would be easier. Moreover, such individuals would anticipate any possible circumstances that would turn to ruins later on. Experienced individuals would have better methods of handling uncouth clients and more so, violent drunkards. Another policy to counter any internal failures would be to apply cash on order policy. This policy would eliminate the possibility of anyone not paying their bills.
Market risk constitutes uncertainties that would arise because of changes in the prices of commodities. In essence, market risk affects the income fluctuations of every business institution regardless of their geographical position in the world. Market risk affects the balance sheet items and is compounded by factors such as commodity risk, foreign exchange rate, interest rates, and equity prices (Mirkovic, Dasic, and Siljkovic 2013). Commodity risk is the primary component of concern here. However, this risk is an external one and businesses have minimal or no control at all over what happens. Nevertheless, they can never leave everything to chance. Such a matter needs to be neutralized in the event that things go that extreme. In this case, the events revert to the initial moments when the idea was floated around. One of the members raised the idea when she realized that the place was growing exponentially from an economic viewpoint. The place was filling with residential as well as business buildings of several floors. She had noticed this pattern since the time she was a high school student. Now that she had graduated she would compare the rate of growth and her previous experiences. This position meant that the increasing number of people would demand vital services in their stay. Entertainment would form one factor of the services needed. This point serves to highlight that for the foreseeable future, at the very least, the market for the services would be inevitable. Therefore, sales volume would serve as a counter-strategy to the possible market risks.
Social and political risks are of les...