ADDIS ABABA SCIENCE AND TECHNOLOGY UNIVERSITY

College Of Architecture and Civil Engineering

Department Of Mining Engineering

Project Management Individual Assignment

Course Name: Project Analysis and Evaluation

Name :
Sarem Alemu
ID NO:
ETS1042/10

Submission Date: 13/01/2022 GC Submitted to:

Scientific and administrative management
What is Scientific Management?
Scientific management focuses on observing the workflows and evaluating its efficiency and
effectiveness. Moreover, the developer of this theory was F.W.Taylor. Therefore, this theory is
also called as Taylor management theory.

Scientific Management is a mental revolution for both employer and employees, which consist of
the following principles.

1. Science, not the rule of thumb: The core is Science

2. Harmony within the group – Unity within the group
3. Cooperation, not individualism – Supportive with each other rather than personal
performance
4. Development of employees to get a good efficiency

What is Administrative Management?

Administrative management theory focuses on achieving the most rational organization for
managing different tasks specified within a complex division of labour. Moreover, the developer
of administrative management theory was Henry Fayol. Therefore, this theory is called
Fayol management theory.

Fourteen Principles of Administrative Management Theory

The administrative management theory consists of 14 principles of management.

 Division of Work: Work done as small jobs or operations, creating specialization.

 Authority and Responsibility: Authority suggests the right to give the order and
obtain obedience and
 Responsibility: Sense of dutifulness that arises out of authority
 Discipline: Respect to organizational rules and the terms of employment
 Unity of Command: Employees will work for command by their superior
 Unity of Direction: All are working for the same targets for the betterment of the
company
  Subordination: No personal or group interest, only a general interest persists.
 Remuneration: The payment system contributes to the success of the organization
 Centralization: There must be the finest utilization of an organization’s resources
 Scalar Chain: This implies the superior-subordinate relation within the organization
 Order: Everything has a place or sequence
 Equity: No discrimination
 Stability of tenure of Personnel: Employee retention or long term employment is
important
 Initiative: Bringing new thing to the company

What is the Relationship between Scientific Management

and Administrative Management?
There is a common goal in both the theories; that is, to enhance the efficiency levels of the
organizations. They share common principles such as divided and specialized work,
responsibilities of managers, unity within the group etc. In overall, both management theories are
important in modern manufacturing organizations.

What is the Difference between Scientific Management and

Administrative Management?
Scientific management theory considers employee efficiency, whereas administrative
management theory considers human and behavioural determinants of the organization.
Furthermore, administrative theory emphasizes on activities like planning and controlling,
whereas scientific theory emphasizes on work study and time of study of workers. So, this is the
key difference between scientific management and administrative management.

Moreover, a further difference between scientific management and administrative management

theory is that administrative management theory has more emphasis on top management,
whereas scientific management theory has an emphasis on low-level management in an
organization. Besides, administrative management theory can be applied to any organization,
because it is universally applicable, but scientific management theory is applied only to
specialized organizations.

Summary – Scientific Management vs Administrative

Management
Although both management theories help to enhance a positive workplace, there is a significant
difference between scientific management and administrative management. The key difference
between scientific management and administrative management is that scientific management
theory considers the workflows and operator efficiency improvements in an organization
whereas administrative management theory considers management styles and activities that help
to achieve maximum output. In overall, the balance of both theories will bring a successful
organization.

Risk management process

The risk management process is a framework for the actions that need to be taken. There are five
basic steps that are taken to manage risk; these steps are referred to as the risk management
process. It begins with identifying risks, goes on to analyze risks, then the risk is prioritized, a
solution is implemented, and finally, the risk is monitored. In manual systems, each step involves
a lot of documentation and administration.

The Risk Management Process is a clearly defined method of understanding what risks and
opportunities are present, how they could affect a project or organization, and how to respond to
them.  

The 4 essential steps of the Risk Management Process are:

1. Identify the risk.

2. Assess the risk.
3. Treat the risk.
4. Monitor and Report on the risk.
 Four Steps of the Risk Management Process

Step 1: Risk Identification

The first step in the risk management process is to identify all the events that can negatively
(risk) or positively (opportunity) affects the objectives of the project:

 Project milestones
 Financial trajectory of the project
 Project scope

These events can be listed in the risk matrix and later captured in the risk register.

A risk (or opportunity) is characterized by its description, causes and consequences, qualitative
assessment, quantitative assessment and mitigation plan. It can also be characterized by who is
responsible for its action. Each of these characteristics is necessary for a risk (or opportunity) to
be valid.
In order to be managed effectively, the Risks and Opportunities (R&O) identified must be as
precise and specific as possible. The title of the risk or opportunity must be succinct, self-
explanatory and clearly defined. 

All members of the project can and should identify R&O, and the content of these is the
responsibility of the Risk (or Opportunity) Owners. Risk Managers are responsible for ensuring
that a formal process for identifying risks and developing response plans are conducted through
exchanges with risk owners.

Below are examples of tools to help identify R&O:

 Analysis of existing documentation

 Interviews with experts
 Conducting brainstorming meetings
 Using the approaches of standard methodologies – such as Failure Modes, Effects and
Criticality Analysis (FMECA), cause trees, etc.
 Considering the lessons learned from R&Os encountered in previous projects 
 Using pre-established checklists or questionnaires covering the different areas of the
project (Risk Breakdown Structure or RBS).

Step 2: Risk Assessment

There are two types of risk and opportunity assessments: qualitative and quantitative. A
qualitative assessment analyzes the level of criticality based on the event’s probability and
impact. A quantitative assessment analyzes the financial impact or benefit of the event. Both are
necessary for a comprehensive evaluation of risks and opportunities.

Qualitative Assessment

The Risk Owner and the Risk Manager will rank and prioritize each identified risk and
opportunity by occurrence probability and impact severity, according to the project’s
criticality scales.
Evaluating occurrence probability (P):

This is determined preferably based on experience, the progress of the project, or else by
speaking to a risk expert, and is on a scale of 1 to 99%.

For example, suppose the risk that: “the inability of supplier X to conduct studies on a
modification Y by the end of 2025” is 50% probable. This could be determined from feedback
and analysis of the supplier’s workload.

Evaluating impacts severity (I):

To assess the overall impact, it is necessary to estimate the severity of each of the impacts
defined at the project level. A scale is used to classify the different impacts and their severities.
This ensures that the assessment of the risk and opportunity is standardized and reliable.

The criticality level of a risk or opportunity is obtained by the equation: 

Criticality = P x I

The purpose of the qualitative assessment is to ensure that the risk management team prioritizes
the response on critical items first.

Quantitative Assessment

In most projects, the objective of the quantitative assessment is to establish a financial evaluation

of a risk’s impact or an opportunity’s benefit, should it occur. This step is carried out by the Risk
Owner, the Risk Manager (with support of those responsible for estimates and figures), or the
management controller depending on the organizational set up in the company. These amounts
represent a potential additional cost (or a potential profit if we are talking about an opportunity)
not anticipated in the project budget.

For this, it is therefore necessary:

 To evaluate the additional costs incurred by financially reviewing:

o Hours of internal engineering 
o Hours of subcontracting
o Additional work to do
 o Amendments and/or claims made to contracts
o Etc.
 To calculate the cost of the undesired event’s consequences by adding these values.

This step will make it possible to estimate the need for additional budget for risks and
opportunities of the project.

Step 3: Risk Treatment

In order to treat risks, an organization must first identify their strategies for doing so by
developing a treatment plan. The objective of the risk treatment plan is to reduce the probability
of occurrence of the risk (preventive action) and/or to reduce the impact of the risk (mitigation
action). For an opportunity, the objective of the treatment plan is to increase the likelihood of the
opportunity occurring and/or to increase its benefits. Depending on the nature of the risk or
opportunity, a response strategy is defined for the project. The following 7 strategies are
possible:

The 7 Risk Response Strategies

7 Risk Response Strategies

 Accept: Do not initiate any action but continue to monitor.

 Mitigate/Enhance: Reduce (for a risk) or increase (for an opportunity) the probability of
occurrence and/or the severity of impact.
 Transfer/Share: Transfer responsibility of a risk to a third party who would bear the
consequences of the problem (share the benefits of a realized opportunity).
 Avoid/Exploit: Entirely eliminate uncertainty / take advantage of the opportunity. 
Monitoring the progress of the treatment plan is the responsibility of the risk owner. They must
report regularly to the risk manager, who must keep the risk register up to date.

Note: The cost of a risk mitigation plan must be integrated into the budget of the project.

When defining a treatment plan:

 Each action begins with an action verb and has a clear purpose.
 Each action has an actionee and a deadline.
 Actions that could generate costs must be tracked and considered in the project.
 For example: to reduce the risk of my car breaking down, a treatment plan could be to
have it checked annually by a repair shop.

When does risk become an issue?

Anticipating Risks and Opportunities

It is possible that, despite the actions put in place to mitigate or prevent it, a risk probability
could increase and reach 100%. Once a risk is confirmed, we no longer refer to it as a risk but as
an issue. The Risk Manager must then inform the various project stakeholders who will relay that
a risk has become an issue and transfer it to the issue log.

Step 4: Risk Monitoring and Reporting

Risks and opportunities and their treatment plans need to be monitored and reported on. The
frequency of this will depend on the criticality of risk/opp. By developing a monitoring and
reporting structure it will ensure there are appropriate forums for escalation and that appropriate
risk responses are being actioned.

Risk management structures are tailored to do more than just point out existing risks. A good risk
management structure should also calculate the uncertainties and predict their influence on a
business. Consequently, the result is a choice between accepting risks and rejecting them.
Acceptance or rejection of risks is dependent on the tolerance levels that a business has already
defined for itself.

If a business sets up risk management as a disciplined and continuous process for the purpose of
identifying and resolving risks, then the risk management structures can be used to support other
risk mitigation systems. They include planning, organization, cost control, and budgeting. In
such a case, the business will not usually experience many surprises, because the focus is on
proactive risk management.

Risk management is a process, not a project that can be “finished” and then forgotten about. The
organization, its environment, and its risks are constantly changing, so the process should be
consistently revisited.

Determine whether the initiatives are effective and whether changes or updates are required.
Sometimes, the team may have to start over with a new process if the implemented strategy is
not effective. 

If an organization gradually formalizes its risk management process and develops a risk culture,
it will become more resilient and adaptable in the face of change. This will also mean making
more informed decisions based on a complete picture of the organization’s operating
environment and creating a stronger bottom line over the long-term.
References

 https://www.differencebetween.com/difference-between-scientific-management-
and-administrative-management/
 https://www.notesformba.com/topic/scientific-administrative-theory-
management-principles-taylor-henry-fayol/
 https://www.indeed.com/career-advice/career-development/frederick-taylor-
principles-of-scientific-management
 https://www.360factors.com/blog/five-steps-of-risk-management-process/
 https://www.migso-pcubed.com/blog/pmo-project-delivery/four-step-risk-
management-process/
 https://www.clearrisk.com/risk-management-blog/bid/47395/the-risk-
management-process-in-5-steps-1
 https://www.lucidchart.com/blog/risk-management-process
 https://corporatefinanceinstitute.com/resources/knowledge/strategy/risk-
management/