Wednesday, November 30, 2011

What is a Risk?

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Risk is an uncertain event or condition that, if occurs, has an effect on at least one project objective

Examples
  1. For example, when you deploy a crane for lifting in a construction project it involves a risk that can lead to the toppling of crane. Here, toppling of crane is an uncertain event that may or may not happen. If it happens, it may lead to injury to workers, loss of lives, damage to properties, damage to the reputation of the company, loss of money in restoration and so on.
  2. Another example: you decide to cross the road when the red man is on (pedestrians are prohibited). By doing this, you are facing a risk of being hit by an approaching vehicle. As you can see, you also have a chance of crossing the road without any accident. So, the risk does not always happen. That's why it is an uncertain event.

From the above examples, it should be clear what a risk means. How does it affect a project? Risk exists the moment a project is conceived. If you have the idea that risks only appear during execution, please change your mind. You have to start looking for the risks from the commencement of the project.

Please take note that project risk is always in the future. If a project risk has occurred, then it will be called as an ISSUE.

Most of us look at risks as negative and feel that they are always dangerous to the project. It is not true. Risks that have an adverse impact on the project are known as THREATS. And not all risks are negative; some events or conditions can help the project; we call them OPPORTUNITIES. 

Sunday, November 27, 2011

Maslow's Hierarchy of Needs

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Abraham Maslow proposed a theory in psychology, which is popularly known as "Maslow's Hierarchy of Needs". One of the many interesting things Maslow noticed was that some needs take precedence over others.

He laid out five broader layers of needs: the physiological needs, the needs for safety and security, the needs for love and belonging, the needs for esteem, and the need to actualize the self, in that order.

Deficit Needs and Being Needs

Maslow's hierarchy of needs is often portrayed in the shape of a pyramid, with the largest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top. Maslow calls the bottom four levels as deficit needs, or D-needs. He has called the top layer as being needs or B-needs.

Maslow's Hierarchy of Needs
Maslow's Hierarchy of Needs

Needs identified in Maslow's Hierarchy

Physiological needs are obvious; they are the literal requirements for human survival. If these requirements are not met, people will not be interested in any higher order needs like social needs or esteem needs.

When the physiological needs are largely taken care of, the second layer of needs (Safety Needs) comes into play. You will become increasingly interested in finding safe circumstances, stability, protection; the individual's safety needs take precedence and dominate behaviour.

After physiological and safety needs are fulfilled, the third layer of human needs are social needs and involve feelings of belongingness. The individual begins to feel the need for friends, family, relationships and a sense of community.

Next, we begin to look for self-esteem. Esteem presents the normal human desire to be accepted and valued by others.

The last level of need is Self-actualization. This level of need pertains to what a person's full potential is and realizing that potential.

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As a project manager, it is important to understand Maslow's hierarchy of needs. Maslow's theory suggests that the most basic level of needs must be met before the individual will strongly desire the secondary or higher level needs. This concept is important in managing and developing human resources in an organization.

Saturday, November 26, 2011

McGregor's Theory Y

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In the last article, we had seen the assumptions of McGregor's Theory X. In this article, I am going to discuss McGregor's Theory Y, the other extreme set of assumptions about employees.

McGregor promoted Theory Y as the basis of good management practice. Theory Y represents the democratic approach and gives the employees scope for creativity and responsibility.

McGregor's Theory Y Assumptions

  1. People are not, by nature, lazy and unreliable. They consider work as a natural part of life.
  2. A large percentage of people has a high degree of imagination, ingenuity and creativity and can be used in solving organizational problems
  3. Close control and threats of punishment are not the only ways to get things done.
  4. Motivation occurs at the social esteem and self-actualization levels, as well as at the physiological and security levels
  5. People enjoy work and can be self-directed in work if properly motivated.
  6. People take responsibility and are motivated to fulfill the goals assigned to them.
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It should be an essential task of the management to unleash the potential in individuals. In supervising human resources, Theory Y offers a better description of people than Theory X.

Of course, we cannot deny that there may be some lazy individuals who may have to be threatened, controlled and prodded strictly. But, it is obvious that far more people respond better to a project manager who applies a management style based on Theory Y.

In projects managed by managers who believe in Theory Y, team members at lower levels of the organization are involved in decision making and have more responsibility.

Final Note

Authoritarian management style is adopted in Theory X organizations with centralized control while in Theory Y, the management style is participative and inclusive. Although Theory X management style is widely accepted as inferior to Theory Y, it has its place in large scale production and operations that involve largely unskilled workers.

Friday, November 25, 2011

McGregor's Theory X

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Prof. Douglas McGregor has proposed two opposite sets of theories about individuals at work. They are known as McGregor's Theory X and Theory Y.

McGregor's ideas suggest that there are two fundamental approaches to managing people. In this post, we are going to see what are the assumptions made in McGregor's Theory X.

McGregor's Theory X Assumptions

  1. Most people prefer to be directed and prodded.
  2. People like to supervised very closely
  3. They are not interested in assuming responsibility.
  4. They are lethargic.
  5. They do not like to work and will avoid it if they can.
  6. Most people have little capacity in solving organizational problems.
  7. Desires security above everything.
  8. Motivation occurs only at the physiological and safety needs.

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As you can see, Theory X generally represents standard bureaucratic and authoritarian attitudes towards employees. Managers who accept the assumptions of Theory X attempt to structure, control and closely monitor and supervise their project team members.

Many managers tend towards Theory X, which leads to poor results. On the contrary, managers using Theory Y produces better performance and results, and allow people to grow and develop.

We will see what are the assumptions made in Theory Y in our next article.