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Sample assignment is attached, please follow the format. Each and every question has to be answered. No need of long introduction. Make sure you answer each and every question with a headline. follow the sample question , but please do not copy words from the sample question. My faculty always check

BRITISH PETROLEUM (PLC) AND JOHN BROWNE: A CULTURE OF RISK BEYOND PETROLEUM (A)1 In April 2007, the board of British Petroleum (BP) faced a difficult decision. A month earlier, two independent reports (the first commissioned by BP and chaired by former American Secretary of State James Baker; the second commissioned by the U.S. Chemical Safety and Hazard Investigation Board) were released investigating an explosion in 2005 at a refinery in Texas City in the United States that killed 15 people and injured more than 180. After exhaustive investigations, the reports identified a history of poorly regulated safety measures in the plant and risk management, the blame for which seemed to focus on the firm's group chief executive, Lord John Browne. After the Baker report was released, the company attempted to mitigate the damage in its 2006 annual review: Importantly, the panel did not conclude that BP intentionally withheld resources on any safetyrelated assets or projects for budgetary or cost reasons. The panel interviewed hundreds of employees in the course of its work and observed that it had seen no information to suggest that anyone - from BP's board members to its hourly paid workers - acted in anything other than good faith.2 In fact, there had been other independent reports, one in 2004 and then again three months after the 2007 Baker report, that were less forgiving of BP's culture of safety. The 2007 report from the U.S. Chemical Safety and Hazard Investigation Board suggested that safety in the company's facilities had been compromised in favour of profits, cost savings or lack of management supervision. The Texas City disaster was caused by organizational and safety deficiencies at all levels of the BP Corporation. Warning signs of a possible disaster were present for several years, but company officials did not intervene effectively to prevent it.3 These reports were just the most recent of many concerns hurting the reputation and performance of the world's second-largest super major oil company and leading to a drop in share price from US$70.41 on January 17, 2006, to US$63.28 on January 16, 2007.4 As well, the public release of this information had destroyed nearly US$39 billion of market capitalization since August 2006.5 (Exhibit 1 presents a comparison of the stock performance of the world's super-major oil companies). During this period, the price of crude oil had risen nearly 20 per cent.6 In January 12, 2007, Browne announced that he would retire from BP. This was somewhat of a shock to the board and the investment community because his retirement date was roughly 18 months before his mandatory retirement date7, and, in the past, he had campaigned to remain in his post past the retirement date. Others were concerned that his successor may not yet be fully prepared to step into the top job. What was also a shock was the announcement of the over US$50 million severance package Browne was set to receive upon retiring. Many wondered how the board could award him such a large package after such poor performance over recent years. Browne had been credited with saving and taking BP to new heights and was one of the most respected business leaders in the United Kingdom. At the same time, however, it was clear that in recent months the firm's performance had suffered significantly. More and more evidence pointed to systemic problems within BP that had been allowed to grow during his tenure, creating the culture of risk in which the BP board now found itself reducing shareholder confidence and risking lives and the firm's reputation. It was up to the board to decide what to do next. BRITISH PETROLEUM British Petroleum plc, (BP) was founded in 1908 as the Anglo-Persian Oil Company and was started with a single well in a remote area of Persia after nearly eight years of searching. From this humble beginning, in less than half a century, the firm grew to be the largest in the United Kingdom and one of the largest in the world, employing over 100,000 people in over 100 countries.8 (Exhibit 2 presents selected financial information for the year ending 2006, and Exhibit 3 presents the biographies of the BP board, as published in the 2006 Annual Report.) The petroleum industry, while lucrative due to insatiable global demand, was also one that involved enormous risks. The days of cheap, easily accessed oil appeared to be over and what remained was often located in areas that were politically and socially unstable. Huge amounts of capital were required to find oil, refine it and then deliver it to the many end users. Risk also stemmed from the fact that although the timing was up for debate, no one doubted that, eventually, either through the development of new technology to replace petroleum or through a simple lack of product, a company that was focused only oil would go out of business. To that end, BP tried to protect itself by attempting to stave off the loss of product by spending billions on exploration for new reserves and on the downstream technology of refining and distribution to control the entire value chain. At the same time, BP also tried to diversify into new energy generation technologies. BP's business was divided into three segments9: oil exploration and production; oil refining and marketing; and gas, power and renewables. Oil Exploration and Production In 2007, BP was actively exploring for oil in 26 countries around the world, which over the years had provided the firm with proven reserves of 18.5 billion barrels of oil and gas equivalents leading to daily production of roughly four million barrels per day. BP had plans to start 24 more major projects by 2009, which would provide additional reserves of over 3.7 billion barrels with an additional production of 850,000 barrels per day. Oil Refining and Marketing Oil refining and marketing took the crude oil BP pumped from the ground and turned it into various products like gasoline, kerosene and motor oil, products which were then sold to consumers either through the firm's own distribution network of over 25,000 gas stations or to other sellers. Oil refining was a technically complex and highly capital-intensive activity. In 2006, BP owned outright or was part owner of 18 refineries processing the equivalent of 2.8 million barrels a day. Petroleum could also be refined into chemicals known as acetyls that were used in numerous consumer products. A statement from the firm indicated the acetyls' pervasiveness: Our acetic acid can be found in jars of pickles. Our acetyls feedstock is used to make Viagra. We invented the purified teraphthalate acid (PTA), used in both clothes and polyethylene terephthalate (PET) bottles for water and soft drinks (and we recycle many of those bottles into fleece pullovers). We are proud to have a world-class PTA business. We also make paraxylene (PX), the raw material for PTA.10 Gas, Power and Renewables As one of the leading oil producers for most of the 20th century, BP, in more recent years, had attempted to reposition itself. The slogan BP: Beyond petroleum had been coined to present BP as a company that was preparing for a world that was past its dependence on petroleum. In 2005, BP Alternative Energy was launched to consolidate the company's low-carbon energy initiatives. By 2006, BP claimed to be a world leader in power generation from solar, wind and gas-fired power plants, with plans for additional investment and research into hydrogen power generation. JOHN BROWNE John Browne, The Lord Browne of Madingley, became chief executive officer of BP in 1995 at the age of 45. He was knighted in 1998 and was made a life peer in the British House of Lords in 2001. By all accounts, Browne was one of the most successful CEOs in the firm's history, credited with turning BP into one of the largest and most successful energy companies in the world. Browne became known for his willingness to take risks and to pursue big deals and, under his leadership, in 1998, the acquisition of American oil company Amoco was engineered. The deal was worth more than US$60 billion, an amount that literally doubled the firm's sales and reserves. In 2003, BP created a joint venture with Russian oil giant Yukos, providing the firm with 50 per cent access to reserves of over 44 billion barrels of oil or oil equivalent and additional production of about 1.2 million barrels a day, at a cost of US$6.8 billion and the associated risk of operating in the Russian business environment.11 By many accounts, Browne was a well-respected business person who, while being one of the most powerful business executives in the United Kingdom, was also very private; little was known about his personal life. He was reputed to be a close friend of then British Prime Minister Tony Blair. Along with turning the firm around, Browne was credited with setting the vision for BP as one that would focus on life beyond petroleum. That slogan meant more than merely planning to become an energy company rather than a petroleum company; it meant BP was a firm that cared about the environment and the safety of its employees more than it cared about oil and profits. Blair had appointed him to the U.K.'s Sustainable Development Commission. The commission described itself as: The Government's independent watchdog on sustainable development, reporting to the Prime Minister, the First Ministers of Scotland and Wales and the First Minister and Deputy First Minister of Northern Ireland. Through advocacy, advice and appraisal, we help put sustainable development at the heart of Government policy.12 The firm took great pains to provide evidence of its focus on the environment and safety in numerous reports and websites, and it undertook investments and made contributions to environmental groups. Codes of conduct for employees covering numerous activities including safety and the environment, policies on corporate governance and statements about social responsibility were all crafted under Browne's watch. The webpage on the BP corporate website entitled Responsible Operations had links to topics like Health and Safety, Management and Compliance, Environment, Compliance and Ethics and Our People. A CULTURE OF RISK: THE TEXAS CITY REFINERY EXPLOSION Having been involved in the process of refining crude oil for over 70 years, the Texas City Oil Refinery, the third largest refinery in the United States, had long since paid for its initial investment. The facility came to be a BP asset with the 1999 acquisition of Amoco, and although the explosion on March 23, 2005, which killed 15 people and injured more than 180, was the worst in company history, it was by no means the first accident at the facility. Described as being held together by little more than Band-Aids and superglue by Don Parus, the refinery's director,13 there had been 23 fatalities in the previous 30 years. Since 2002, when Parus took over operations at the plant, there had also been an average of one fire a week, ranging from 50 to 80 a year.14 Parus is quoted as wondering why his staff actually came to work: killing somebody every 18 months seems to be acceptable at this site . . . why would people take the risk, based on the risk of not going home?15 In 2004, an independent Texas consulting firm called Telos Group was contracted by the Texas City refinery director to assess the safety culture of the plant. In its report, Telos exposed numerous pieces of evidence to suggest that safety at the refinery was being compromised as repairs or servicing were not effectively completed in attempts to save money or when workers simply were unable to follow the safety procedures. A report in the Financial Times mentions broken alarms, thinned pipe, chunks of concrete falling, bolts dropping 60 feet, and staff being overcome with fumes16 as well as numerous workers at the plant complaining of pressure not to report injuries and safety violations.17 The Telos report suggested that although there seemed to be a willingness on the part of the refinery's management team to maintain a safe working environment, desire and reality may have been two different things. Exhibit 4 provides excerpts from the Telos Report. The consultants concluded that there seemed to be an ingrained culture of risk at the refinery, which would require a great deal of effort to change, and that, in the past, after an accident, efforts to make changes started out strong but faded as management's attention drifted back to profits and efficiency. Many still too easily see a future where it all slides back to the way it was before the incidents,' and so people pray and hope that this will not pass' . . . we were told many stories about times that left the distinct impression that margins could beat out safety as long as they were good enough . . . here we are today and they still haven't kept promises that make our people out there feel safe'. . . Soon becomes never around here' mentioned one person in the refinery, pointing to successive postponements; starting with fixing it soon (meanwhile we put a clamp on it), which then becomes next week, which becomes next month, which becomes next turnaround, which becomes never.'18 In apparent support of this statement, a few months after the March 2005 explosion, there were two additional explosions causing over US$ 32 million in property damage, and then, in 2006, another worker was killed on the job. The 2007 U.S. Chemical Safety and Hazard Investigation Board (CSHIB) report, which examined the explosion and BP's safety culture in general, revealed that after the 1999 acquisition of Amoco, rather than making much-needed safety improvements, BP ordered a 25 per cent cut in fixed costs at all its refineries. The report went on to condemn the firm by suggesting: The combination of cost-cutting, production pressures and failure to invest caused a progressive deterioration of safety at the refinery. Beginning in 2002, BP commissioned a series of audits and studies that revealed serious safety problems at the Texas City refinery, including a lack of necessary preventative maintenance and training. These audits and studies were shared with BP executives in London and were provided to at least one member of the executive board. BP's response was too little and too late. Some additional investments were made, but they did not address the core problems in Texas City. In 2004, BP executives challenged their refineries to cut yet another 25 per cent from their budgets for the following year.19 These comments echoed the findings of the Baker report. This report, which BP had stated was very supportive of their safety culture, could be interpreted differently than BP's own interpretation. Exhibit 5 presents excerpts from the report's Executive Summary entitled Corporate Safety Culture. Clearly there were differences of opinion between the firm and the independent observers with respect to the depth of BP's culture of safety. Despite the difference of opinion, since the explosion, BP had paid out about US$2 billion in terms of compensation payouts and lawsuits.20 CONCLUSION With Browne's impending resignation, there was undeniable evidence of big problems throughout the organization with regard to safety and the firm's reputation. As a result, BP's lack of public credibility affected the already-stated strategy and goals of the firm. The board knew that changes needed to take place from the top down. The obvious question: Where to begin? Exhibit 1 SUPER MAJOR OIL COMPANY'S STOCK PERFORMANCE COMPARISON - 1 YEAR RETURN Source: Bloomberg, accessed January 23, 2008 Exhibit 2 GROUP INCOME STATEMENT - 2006 for the year ended 31 December ($ million) Source: BP Annual Review 2006 Exhibit 3 BP BOARD OF DIRECTORS PRIOR AT THE PUBLICATION OF THE 2006 ANNUAL REVIEW 1. The Lord Browne of Madingley, FRS, FREng Group Chief Executive John Browne (59) joined BP in 1966 and subsequently held a variety of exploration and production and finance posts in the US, UK and Canada. He was appointed an executive director in 1991 and group chief executive in 1995. He will retire as group chief executive at the end of July 2007. He is a non-executive director of Goldman Sachs Group Inc. He was knighted in 1998 and made a life peer in 2001. 2. Dr A B Hayward Group Chief Executive designate Tony Hayward (49) joined BP in 1982. He held a series of roles in exploration and production, becoming a director of exploration and production in 1997. In 2000, he was made group treasurer, and an executive vice president in 2002. He was chief executive officer of exploration and production between 2002 and 1 February 2007, becoming an executive director in 2003. He has been appointed to succeed Lord Browne as group chief executive following Lord Browne's retirement in July. Dr Hayward is a nonexecutive director of Corus Group plc. 3. Dr D C Allen Group Chief of Staff David Allen (52) joined BP in 1978 and subsequently undertook a number of corporate and exploration and production roles in London and New York. He moved to BP's corporate planning function in 1986, becoming group vice president in 1999. He was appointed executive vice president and group chief of staff in 2000 and an executive director of BP in 2003. He is a director of BP Pension Trustees Limited. 4. I C Conn Group Executive Officer, Strategic Resources Iain Conn (44) joined BP in 1986. Following a variety of roles in oil trading, commercial refining, retail and commercial marketing operations, and exploration and production, in 2000 he became group vice president of BP's refining and marketing business. From 2002 to 2004, he was chief executive of petrochemicals. He was appointed group executive officer with a range of regional and functional responsibilities and an executive director in 2004. He is a non-executive director of Rolls-Royce Group plc. 5. Dr B E Grote Chief Financial Officer Byron Grote (58) joined BP in 1987 following the acquisition of The Standard Oil Company of Ohio, where he had worked since 1979. He became group treasurer in 1992 and in 1994 regional chief executive in Latin America. In 1999, he was appointed an executive vice president of exploration and production, and chief executive of chemicals in 2000. He was appointed an executive director of BP in 2000 and chief financial officer in 2002. He is a nonexecutive director of Unilever NV and Unilever PLC. 6. A G Inglis Chief Executive, Exploration and Production Andy Inglis (47) joined BP in 1980, working on various North Sea projects. Following a series of commercial roles in exploration, in 1996 he became chief of staff, exploration and production. From 1997 until 1999, he was responsible for leading BP's activities in the deepwater Gulf of Mexico. In 1999, he was appointed vice president of BP's US western gas business unit. In 2004, he became executive vice president and deputy chief executive of exploration and production. He was appointed chief executive of BP's exploration and production business and an executive director on 1 February 2007. Exhibit 3 (continued) 7. J A Manzoni Chief Executive, Refining and Marketing John Manzoni (47) joined BP in 1983. He became group vice president for European marketing in 1999 and BP regional president for the eastern US in 2000. In 2001, he became an executive vice president and chief executive for gas and power. He was appointed chief executive of refining and marketing in 2002 and an executive director of BP in 2003. He is a non-executive director of SABMiller plc. 8. P D Sutherland KCMG Chairman Peter Sutherland (60) rejoined BP's board in 1995, having been a non-executive director from 1990 to 1993, and was appointed chairman in 1997. He is non-executive chairman of Goldman Sachs International and a non-executive director of Investor AB and The Royal Bank of Scotland Group. Chairman of the chairman's and the nomination committees 9. Sir Ian Prosser Deputy Chairman Sir Ian (63) joined BP's board in 1997 and was appointed non-executive deputy chairman in 1999. He is the senior non-executive director. He retired as chairman of InterContinental Hotels Group PLC, previously Bass PLC, in 2003. He is the senior independent non-executive director of GlaxoSmithKline plc and a non-executive director of the Sara Lee Corporation. He was previously on the boards of The Boots Company PLC and Lloyds TSB PLC. Member of the chairman's, the nomination and the remuneration committees and chairman of the audit committee 10. J H Bryan John Bryan (70) joined BP's board in 1998, having previously been a director of Amoco. He serves on the boards of General Motors Corporation and Goldman Sachs Group Inc. He retired as the chairman of Sara Lee Corporation in 2001. He is chairman of Millennium Park Inc. in Chicago. Member of the chairman's, the audit and the remuneration committees 11. A Burgmans Antony Burgmans (60) joined BP's board in 2004. He was appointed to the board of Unilever in 1991. In 1999, he became chairman of Unilever NV and vice chairman of Unilever PLC. He was appointed chairman of Unilever NV and Unilever PLC in 2005. He is also a member of the supervisory board of Akzo Nobel NV. Member of the chairman's and the safety, ethics and environment assurance committees 12. Sir William Castell, LVO Sir William (59) joined BP's board in July 2006. From 1990 to 2004, he was chief executive of Amersham plc and subsequently president and chief executive officer of GE Healthcare. He was appointed as a vice chairman of the board of GE in 2004, stepping down from this post in 2006 when he became chairman of the Wellcome Trust. He remains a non-executive director of GE and is a trustee of London's Natural History Museum. Member of the chairman's, the audit and the safety, ethics and environment assurance committees 13. 13 E B Davis, Jr Erroll B Davis, Jr (62) joined BP's board in 1998, having previously been a director of Amoco. He was chairman and chief executive officer of Alliant Energy, relinquishing this dual appointment in 2005. He continued as chairman of Alliant Energy until February 2006, leaving to become chancellor of the University System of Georgia. He is a non-executive director of PPG Industries, Union Pacific Corporation and the US Olympic Committee. Member of the chairman's, the audit and the remuneration committees Exhibit 3 (continued) 14. D J Flint, CBE Douglas Flint (51) joined BP's board in 2005. He trained as a chartered accountant and became a partner at KPMG in 1988. In 1995, he was appointed group finance director of HSBC Holdings plc. He was chairman of the Financial Reporting Council's review of the Turnbull Guidance on Internal Control. Between 2001 and 2004, he served on the Accounting Standards Board and the Standards Advisory Council of the International Accounting Standards Board. Member of the chairman's and the audit committees 15. Dr D S Julius, CBE DeAnne Julius (57) joined BP's board in 2001. She began her career as a project economist with the World Bank in Washington. From 1986 until 1997, she held a succession of posts, including chief economist at British Airways and Royal Dutch Shell Group. From 1997 to 2001, she was an independent member of the Monetary Policy Committee of the Bank of England. She is chairman of the Royal Institute of International Affairs and a nonexecutive director of Lloyds TSB Group PLC, Roche Holdings SA and Serco Group plc. Member of the chairman's and the nomination committees and chairman of the remuneration committee 16. Sir Tom McKillop Sir Tom (63) joined BP's board in 2004. Sir Tom was chief executive of AstraZeneca PLC from the merger of Astra AB and Zeneca Group PLC in 1999 until December 2005. He was a non-executive director of Lloyds TSB Group PLC until 2004 and is chairman of the Royal Bank of Scotland Group. Member of the chairman's, the remuneration and the safety, ethics and environment assurance committees 17. Dr W E Massey Walter Massey (68) joined BP's board in 1998, having previously been a director of Amoco. He is president of Morehouse College, a non-executive director of Bank of America and McDonald's Corporation and a member of President Bush's Council of Advisors on Science and Technology. Member of the chairman's and the nomination committees and chairman of the safety, ethics and environment assurance committee Changes to the board Michael Wilson resigned as a director on 28 February 2006 and Michael Miles retired as a director on 20 April 2006. Sir William Castell was appointed a non-executive director on 20 July 2006 and Andy Inglis was appointed an executive director on 1 February 2007. Source: BP Annual Review 2006. Exhibit 4 EXCERPTS FROM THE TELOS REPORT, 2004 Don Parus is mentioned by the overwhelming majority of those interviewed and surveyed as genuine in his commitment to people and safety, while oftentimes, in the same breath, they question if everyone on the leadership team is on board with Don. The lack of leadership and management visibility, (except when something goes wrong) communication, and conversation around protection coupled with site history and a natural focus on production causes a significant priority for production over protection at Texas City. Maintenance underinvestment over the years has significantly altered the listening for management's safety commitment and diminishes production's relationship to safe practices for routing assignments (thinning pipe, inconsistent asbestos abatement practices, corrosion under insulation). In addition, when asked what area concerned people the most in terms of safety performance or where the next injury was likely to occur turnaround maintenance was at the top of the list. Many added that this was likely due to the requirement of clustering them all together and thus not being able to select contractors by their safety performance. Few levels of the organization are exempt from the scarcity of time syndrome that tends to reinforce a culture of acting on priorities versus a culture of acting from values and strategies. From a protection perspective, the quantity and competence of managers and supervisors is questionable given the cultural work needed at Texas City. The prevalent view of procedures as unworkable at the production level contributes to the culture of individual interpretation of protection requirements and tolerance for variation from accepted safe practices. Many, many people pointed out to us that in several cases they knew personally, these were good people who could not make sense of the procedure as written, and were trying to the best of their ability to understand the intent of the procedure and comply with that. Source: Telos Perspective and Recommendations, The Telos Group, 2004. Exhibit 5 EXCERPTS FROM THE BAKER REPORT Process safety leadership. The Panel believes that leadership from the top of the company, starting with the Board and going down, is essential. In the Panel's opinion, it is imperative that BP's leadership set the process safety tone at the top of the organization and establish appropriate expectations regarding process safety performance. Based on its review, the Panel believes that BP has not provided effective process safety leadership and has not adequately established process safety as a core value across all its five U.S. refineries. While BP has an aspirational goal of no accidents, no harm to people, BP has not provided effective leadership in making certain its management and U.S. refining workforce understand what is expected of them regarding process safety performance. BP has emphasized personal safety in recent years and has achieved significant improvement in personal safety performance, but BP did not emphasize process safety. BP mistakenly interpreted improving personal injury rates as an indication of acceptable process safety performance at its U.S. refineries. BP's reliance on this data, combined with an inadequate process safety understanding, created a false sense of confidence that BP was properly addressing process safety risks. Incorporation of process safety into management decision-making. The Panel also found that BP did not effectively incorporate process safety into management decision-making. BP tended to have a short-term focus, and its decentralized management system and entrepreneurial culture have delegated substantial discretion to U.S. refinery plant managers without clearly defining process safety expectations, responsibilities, or accountabilities. In addition, while accountability is a core concept in BP's Management Framework for driving desired conduct, BP has not demonstrated that it has effectively held executive management and refining line managers and supervisors, both at the corporate level and at the refinery level, accountable for process safety performance at its five U.S. refineries. It appears to the Panel that BP now recognizes the need to provide clearer process safety expectations. Process safety cultures at BP's U.S. refineries. BP has not instilled a common, unifying process safety culture among its U.S. refineries. Each refinery has its own separate and distinct process safety culture. While some refineries are far more effective than others in promoting process safety, significant process safety culture issues exist at all five U.S. refineries, not just Texas City. Although the five refineries do not share a unified process safety culture, each exhibits some similar weaknesses. The Panel found instances of a lack of operating discipline, toleration of serious deviations from safe operating practices, and apparent complacency toward serious process safety risks at each refinery. PROJECT MANAGEMENT Running Head: PROJECT MANAGEMENT Project Management- Dabhol Power Plant Project Process [STUDENT NAME] [PROFESSOR NAME] [COURSE NAME] [DATE] 1 PROJECT MANAGEMENT 2 Project Management- Dabhol Power Plant Project Process The Dabhol Power Plant project had brought with it many risks and opportunities since its inception from 2006. There have been many issues that have risen from the risks that the project has brought about. A series of investigations and analysis about the risks have led to plans being made in order to cover the risks from the project that was presented in the earlier case study. There were several risks that had been identified in regards to the Dabhol Power Plant Project. The top risks identified were communication, as the main stake holders involved in the project were unable to come to agreed decisions on the various aspects such as contracts and rushing to meet the project deadlines which lead to the next highest risk being substitution of quality parts as well as having to increase the cost of gas by having it imported from Middle Eastern countries like Bahrain and Qatar making the expense of the generated electricity higher than which the consumers of Maharashtra could afford (Custom Book, 2011). Another major risk that had causes issues to arise in the Dabhol project was that of the technical scope of the project being unclear leading to the occurrence of scope creep. The highest of these risks, as can be seen were associated with project communication, customer satisfaction, contractual issues, and project scope. These major issues needed to be alleviated in order to ensure that it does not occur again causing issues to arise and conclude in the same way in which it previously did; the shutdown of the Dabhol Power Plant. Another scenario has occurred during this time in which the top two threats have occurred just two months after the initiation of the project. Almost during this time the predicted top opportunity has also been realized, however, unfortunately the project's risk budget has been exhausted to already a stretched limit. Furthermore, the risk management schedule has been shortened two months due to the resultants that have come about. PROJECT MANAGEMENT 3 Analysis of Impact on Events on Project The events that had taken place within two months after the project had begun once again were the occurrence of the top two threats; realization of the top opportunity which was predicted in the management plan and risk register. Unfortunately the project's allotted risk budget has been exhausted beyond the predicted limits and the risk management schedule has been cut by two months. The scenario put forth is one of tremendous hazards, which would baffle project managers working on the Dabhol Power Plant re-opening. According to the risk registry previously created the following are the highest or top two risks that were identified: PM - Conflict Conflict 0.8 0.9 0.72 High Having a worksite Communication between in the Quality wide meeting to stakeholders contracts Impact if communicate not properly importance of mitigated Tech - Scope Scope items Scope not clear Creep 0.4 0.3 0.42 Medium working together Mitigate the impact to problem to get quality if back on track not properly mitigated For these identified risks that following actions were recognized to alleviate the issues that were arising: Risk Scope items not clear about the project Action Alleviate the problem and get back on the main PROJECT MANAGEMENT Contractual conflicts between the stakeholders 4 track of the project. All stakeholders should have a meeting to communicate the defects of the conflict to correct them The nature of each of the above listed risks is critical to the success of the project. When the project scope is clearly defined the foundations for developing the project plan are established. The project scope is basically a definition of the intended end results or the main mission of the project (Gray & Larson, 2008). Having a definitive scope is essential to the overall success of the project because it is the root or the defined purpose of the project. Without a scope the team would be struggling about the project with no concrete purpose. It is the scope the interlocks all the various elements of the project's plan. However, this was not properly achieved leading to the down of all the projects and resulting the predicted risks arising to once again come to the surface and smoother the project into none existence. The scope creep was an issue that has been present since the start of the first project and also with its re-opening. With the scope undefined the project is bound to once again fall back on the same road that it had started. Also the contractual risks that are also causes issues to rise since there is not proper process of communication set up between all the stakeholders (Hilson & Simon, 2007). This will lead to the project to once again face court battles that involved the stakeholders in order to clear the air of the contract and decrease the vagueness that is occurring in the contract. An opportunity that was realized in the project was that of lobbying politicians in proceeding with the project and getting the World Bank to loan an amount to the stakeholders in order to re-open the project. The lobbying of politicians will become a great advantage in order to mitigate the top threats and risks of the project. The exhaustion of the project's budget will lead to monetary PROJECT MANAGEMENT 5 issues in regards to the equipment and gas supply which will leave Dabhol under debt again causing the shutdown of the plant. Mitigation Activities It has become essential that a mitigation occurs between all the stakeholders in order to develop a communication process that allows stakeholders to speak freely about their thoughts and what they believe to be threats to the project. This lacking in the communication means of the project is causing a rift which is resulting in contractual issues. Therefore the best thing to do would be to settle the dispute of the contract as it is the main entity holding the commercial relationship together. Therefore, without having to bring the process through a court procedure, the stakeholders involved can have a negotiation in order to reach an understanding to resolve the point of differences that are arising in the contract and the overall project. With this mitigation technique stakeholders involved in the deal would already begin to develop a positive mood with a great tendency to plan and use a cooperative strategy resulting in a greater amount of interaction which may result in each of the parities reaching their instrumental goals (Project Management Institute, 2000). This activity will also allow the interaction of stakeholders and their project managers to come together to discuss the scope of the project, thus providing a clearly definition to follow on. Budget & Schedule Changes Overall, with the events taking place in which the budget is exhausted and the risk management schedule is cut back by two months, there needs to be changes made to these in order to make sure that the top threats or risks are properly handled in order to eliminate them completely. Analyzing the events, it does not seem necessary that the budget be change by PROJECT MANAGEMENT 6 increasing it, however, in order to carry about the risk management plan, a certain amount of budget will be required to tackle the identified risks. It can be kept to a minimum by not hiring a professional negotiator from each side, with instead, a representative of each stakeholder come forth to mitigate the issue at hand (Heldman, 2005). Once these issue is resolved the remaining risks and threats can be tackle, which includes decreasing the budget area of importing natural gas from Middle Eastern countries to finding other local sources of gas which will aid in the produced electricity becoming manageable and cheaper for the Maharashtra people to pay and in result the Maharashtra State Electricity Board (MSEB) to pay Enron. It is possible that the mitigation of the risks be completed within in the allotted time period even if it has been cut down two months. With proper organization the outlined tactics for solving the risk can be completed. However, it also depends on the processing of the new contract according to Indian law. This can be covered up quickly with the use of the opportunity that was procured in the shape of lobbying politicians. This can be a great advantage as the politicians in India have a great deal of power that allows them to contribute to the speedy acceptance of the process. Reviewed Risk Registry *Tech - Scope Scope items Scope not clear 0.2 0.3 0.12 Medium Creep Mitigate the impact to problem to get quality if not back on track properly mitigated *User - Project being Rushing to Input/Commitment expedited 0.2 0.5 0.10 Medium impact Having the meet new to quality if not stakeholders project final properly understand PROJECT MANAGEMENT dates mitigated 7 reasonable timelines *PM - Conflict Conflict in Communication between the contracts 0.2 0.3 0.15 stakeholders High Quality Having a Impact if not worksite wide properly meeting to mitigated communicate importance of working together User - Customer project Input/Commitment satisfaction 0.8 0.5 0.40 High Quality Making sure transfer to Impact if project the customer is competition slides due to satisfied by as cost of gas from having status customers subcontractors meetings and cannot resolving afford issues as they electricity arise (*) indicates change from previous risk registry Once the risks that have been identified as the top risks are mitigated and resolved they automatically lose their potential as a risk become very low to none. The communication issue has been resolved with the use of negotiations tactics which have ultimately made the contract to become manageable and practically. This has caused an drop in its risk level, with this resolution the risks related to that of subcontracting gas and equipment from expensive exporters have decreased. Also, the communication issue has caused the issue of scope to be cleared up and more defined leading the stakeholders to understand the route of the process to have the project run more smoothly without any unnecessary bumps. PROJECT MANAGEMENT 8 PROJECT MANAGEMENT References Custom Book. (2011). BUS 519: Project Risk Management: Casepack 2011. Mey York: John Wiley & Sons. Gray, C. F. & Larson, E. W. (2008). Project Management: The Managerial Process. Boston, MA: McGraw-Hills Companies, Inc. Heldman, K. (2005). Project Manager's Spotlight on Risk Management. San Francisco, CA: Jossey-Bass. Hillson, D & Simon, P. (2007). Practical Project Risk Management: The ATOM Methodology, Vienna, VA: Management Concepts, Inc. Project Management Institute. (2000). A Guide to the Project Management Body of Knowledge (4th ed.). 9