Stakeholder management and risk management Essay

Stakeholder management and risk management - Essay Example The stakeholder identification includes listing of the external and internal stakeholders who are associated with the mega project and then categorizing the stakeholders according to their roles, influence and impact on the large project. After analyzing the group of stakeholders, a stakeholder matrix is formed in which the stakeholders are positioned based on their relative importance for the large project that they are associated with. Followed by the formation of stakeholder matrix, stakeholder engagement is crucial in order to discuss the objectives and goals of the organization. The expectations of the stakeholders are also discussed in the meeting and a common goal is arrived to which all the stakeholders need to abide. The expectations of the stakeholders are discussed and the nature of communication to be maintained with the stakeholders is also agreed upon during the process (Kerzner and  Belack, 2010, p.47). The approach of stakeholder management maintains all the protoco ls of the large scale project in terms of security, confidentiality, etc. ... The synthesis approach to stakeholder management considers the ethical responsibilities to the stakeholders apart from the fiduciary responsibilities. Risk management is a process of identification, assessment, categorization and prioritization of risks and then adopt suitable strategies for allocation of resources in order to monitor, control and mitigate the impacts of risk exposures. Risk management approaches are adopted in order to minimize the impacts of uncertain events which could interrupt or cause stoppage or considerable loss in the operations of large scale projects. Risk management takes into account the exposures to the financial markets, credit policies, legal risk, operational risk and any other event that is unpredictable or uncertain in the course of large projects. The various approaches to risk management in large scale projects include avoiding the risk, reducing the impact of risk exposure, transferring the risk to another party or even accepting some or all of the probable impacts of a certain risk exposure (Handlechner, 2008, p.37). In case of avoidance of the risk, some of the resources or objectives of the large scale project may need to be compromises. The risk avoidance approach is taken when the impact of such risk on the large scale project nullifies the value of the project. In most large scale projects, the risk mitigation approach is followed with a view that there is a risk return trade off for the project. Lowering the amount of risk to the tolerable limit of the project would help large projects to be executed with a profitable balance between the associated risks and the potential returns (Conrow, 2003, p.58). The third approach for the management of risk is the method of transferring the risk to another party. By transferring