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In project management, contingency planning is often part of risk management.Any project manager knows that a plan is only an outline.A contingency plan is a plan, and like any plan, it requires a great deal of research and brainstorming.
There is the threat of legal action or compensation plans.
Related: The Importance of Data Governance for Business Project managers are adept at creating contingency plans, as the structure and actions are like many of the processes already familiar to their profession.
But risk management isn’t the same as contingency planning.
Risk management is about identifying, assessing, avoiding, mitigating, transferring, sharing and accepting risk; while a contingency plan is about developing steps to take when an actual issue occurs.
Policy can change, and communities can protest projects and effectively stop them.
Liability issues are also at play when managing a project.
However, contingency plans in business aren’t, by definition, always negative.
There are positive contingency plans, such as what to do if the organization receives an unexpected sum of money or other resource.
Related: Business Agility: What Is It & Why Is It Important?
While any organization is going to plan for its product or service to work successfully in the marketplace, that marketplace is anything but stable.