CASE STUDY

Case Study: Risk Management on a Satellite Development Project



Case Study: Risk Management on a Satellite Development Project

Introduction

Risk management is the practice of using risk analysis to devise management strategies to reduce or restructure risk. In order to deal with an estimated payoff, the insurance company may revise its investment strategy, change eligibility for insurance, target different populations for sales of policies, or even cancel policies if possible to control the amount of money they expect to pay out and insure that they make a profit.

This case study will assess the risk management of a Satellite Development Project in order to provide justifications about their approaches and the ways in which they curbed the risk that came in the way of their project. The case study is sub-divided into the sections of introduction; planning and execution, in order top give us a detailed overview of the crucial need of a comprehensive risk plan in the case of a satellite project.

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Issues in the Absence of a Risk Plan

In case of a Satellite Development Project, risk plans and risk management mechanisms occupy more importance and significance. One reason for this is that there are many unknown variables in a satellite development project that can translate into a higher level of risk for such projects. These issues can relate to technical difficulties (design, operation of small spacecraft, ground stations, assemblies, components, and equipments), management issues (project management models, concurrent engineering, cost, schedule and risk issues), regulatory issues (space law, satellite registration, space debris mitigation guidelines, and others as required), standardization issues (standards for platforms, ground-stations, project and programme management, communication protocols, and interfaces) and other policy issues (small satellite development as part of an overall research and development strategy, modes of international cooperation and their underlying drawbacks, technology transfer issues, industrialization, start-up opportunities, and related issues) (McNaught, Lam, Hui, Au, 2005). All these issues relate to the risk involved in the absence of a comprehensive risk plan.

Assessment for Level of risk Management

Usually some triggering force (known or unknown) causes a risk event to occur. Triggers could be a port strike, economic issues resulting in a currency crisis, collapse of a competitor, an unexpected demand surge, and many other factors are all examples of risky situations that could have been avoided if we have a risk plan. As mentioned earlier, a single company is not in a position to control the triggers and prevent the event from happening. The risk event will occur with some probability and have losses associated with it (Ahlfeldt, 2008).

The significance of the risk event, as calculated by multiplying the probability and the sum of the losses, is what a company may in fact control through risk management. Risk management is defined as taking actions to reduce the probability of a risk event. In contrast to the assumption of a company not being able to control triggers and events, risk management assumes that an organization can influence the types and impact of ...