The Practice of Project Risk Management: A Case of Hawassa Agri-Manufacturing Industry, Potato Chips Project by MIDROC Investment Group
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Date
2022-06
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Addis Ababa University
Abstract
The private sector is an important player in economic development, as it is a major source of national income and the primary employer and creator of jobs. Hence the success of private sector investments is equally important to the country as the private investor. Each project's planning and execution are fraught with uncertainties. As a result, project risk management is critical for reducing the possibility and effect of potential threats while maximizing opportunities. Understanding and managing project risks enable project teams and members to effectively carry out the project to meet the required expectation and deliver its objectives. The performance of MIDROC Ethiopia was not encouraging for the last two decades and many projects faced cost overruns and delays in completion among other things. As a result, the company has gone through a major restructuring in 2020. This study is conducted to assess the risk management practice of Hawassa Agri Manufacturing Industry, Potato Chips Project by MIG to assess whether risk management is practiced according to the theoretical literature. The study uses non-probability purposive sampling to select the project by taking the most recent project with the highest investment cost from the projects managed by MIG. A questionnaire with a Likert scale was distributed to collect primary data to all project office staff that have adequate knowledge and a significant role in the project's risk management practice. Frequencies, percentages, charts, and tables were used to evaluate the data using SPSS statistical software. The findings show that risk management is not practiced to the level expected and there exists a huge gap between the theoretical literature and what is applied in the project. The study also revealed that the corporate strategic plan has not given due attention to project risk management. Hence it is recommended that MIG should improve its project risk management by integrating risk management into its corporate plan and establishing policies and procedures as well as enhancing the knowledge and awareness of its employees on risk management.
Keywords: Project Management, Risk, Risk Management, Risk Management Practices