Free Custom «Critical Risk Factors in Hong Kong Event Project» Essay Paper

CHAPTER ONE: INTRODUCTION

1.1  Background of the Research

1.1.1Hong Kong Exhibition Market

The exhibition market in Hong Kong has changed significantly over the past 15 years. The market share of exhibitors increased in 3.5 times in 2008. Spatially, it has grown from 253,896 m² to 800, 961 m² in the period of 1996 to 2008. Based on these figures, the average growth has been 10.9% per year (CU).

1.1.2 Trade Exhibition Organizers in Hong Kong

There were 11 main trade exhibition organisations in 2004. This number had increased to 30 by 2008. This includes 29 private organisers (e.g. UBM Asia) and one public organiser (the Hong Kong Trade Development Council or HKTDC), which happens to be a current industry leader (CU). The HKTDC booked 45% of the total gross exhibition space in 2008, and the remaining 55% of space was divided between the other organisers. The second largest organiser is Global Sources, which booked 16% out of the 55% remaining. The HKTDC’s market leader role in the Hong Kong exhibition market is gradually declining due to the strong market forces and the Asia World-Expo (AWE) (CU).

            UBM Asia Ltd. and Global Sources represent two largest organisations that affect the market power of the small private organisers. 27 events were held by 27 private organisers in 2008. This indicates that one organiser holds one event every year on average.

 

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1.2 Research Gap

            The significant research has been conducted on the event management frameworks, but there is a lack of the research on the implementation of those frameworks, especially in terms of the potential risks involved in the actual projects in Hong Kong.

1.3 Research Objectives

Research objectives are the following:

1) To investigate the academic theories of the event management, particularly the critical risk factors in Hong Kong.

 2) To identify the critical risk factors for implementing the event projects in Hong Kong.

3) To verify the critical risk factors and determine how they increase the effectiveness of the event project implementation.

1.4 Problem Statement

The main internal problem is that different events have different objectives. The main external problem is the competition from other countries that could result in the loss of Hong Kong’s competitive advantage. 

CHAPTER TWO: LITERATURE REVIEW

The literature review would be conducted and reported in this chapter. Existing literature and the research results in the project and event management, in particular for the event risk management, were overviewed and summarized. Based on the preliminary definition of the project and event management, their similarities and differences in terms of the risk management and the general risk factors are highlighted and contrasted. Standards of these two management frameworks, which present the project (PMBoK) (Willian 1996) and event management body of knowledge (EMBoK) (Michael 2011), were referenced in this research study due to the simplicity of the discussion common ground establishment. Using the summary of the previous research study, the identification of the common risk factor that is potentially applicable to the Hong Kong event risk management can be performed. The particular events, such as the general tourism, the adventure tourism, and the major sport events were selected as an illustration to demonstrate the impact on the event with the theory of event management depicted in the early subsections. The critical risk factors, followed by their source of inspiration, were generalized from the risks of the event described to facilitate and support the construction of the research model. The discussion in the following chapters and the research methodology design would be based on the guideline of the selected risk factors.

2.1 Project Management

Project management was defined in this chapter, while the background knowledge about the project management in general, such as the project life cycle and the project management  processes were described. The project management in each area of the project integration management, project scope management, project time management, project cost management, project quality management, project human resource management, project communication management, project risk management and project procurement management was discussed with the specific focus on the risk management.

2. 1. 1 What is Project Management?

Various definitions can be found in the literature sources. Project management is defined as “the knowledge, tools, and techniques for controlling requirements, setting a realistic scope, creating feasible schedules, defining responsibilities, and managing expectation” (Tinnirello 2002), while it means “an approach to management of work within the constraints of time, cost and performance requirement” (Nokes 2007) and it is also “a body of knowledge concerned with the principles, techniques and tools used in planning, control, monitoring, and review of projects” (Business Dictionary 2011). The wide range of definitions and meanings confuse the further discussion on the topic. The project management is defined as a field of study that aims to achieve specified goals with proper planning, organizing, securing and managing resource under certain constraints. Preferably, the project management can achieve a certain optimization of the resource usage during the project implementation. In order to achieve the goal, the risk management should not be detached. The comprehensive definition should include the factored event management (Taranaki Violence Free - Te Rito Management Group 2011) as well as the event risk management (Tarlow 2002). They are considered  the major problems in the research study.

The project definition and the project life cycle

The risks associated with the event management are similar to all projects with the common subject. A project is “an activity that has a beginning and an end which is carried out to achieve a particular purpose to a set quality within the given time constraints and cost limits” (Chartered Management Institute). Essentially, events are projects with a tangible beginning and end that are directed to attain one result and that follow the project life cycle. The project life cycle is a representation of “the linear progression of a project, from defining the project through making a plan, executing the work, and closing out the project” (Verzuh 2008, p. 23).

2.1.2 Project Management Process

According to PMBok, the project management processes, which is “a series of action bringing about a result” (The Free Dictionary 2011), could be divided into five categories that include initiating processes, planning processes, executing processes, controlling processes, and closing processes.

Initiating Processes

The initiating processes are used to define the beginning of the project and the commitment to fulfil it.

Planning Processes

The planning processes are the ones with the objective to devise and maintain a possible working scheme that suits some particular commercial requirements of the addressed project.

Executing Processes

The processes which coordinate people and manage resources to complete the project objectives fully or partially are called executing processes.

Controlling Processes

The processes that aim to evaluate and monitor the progress in order to make sure the project is on track are classified as controlling processes. The proper actions would be taken if there is a need to fix anything.

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Closing Processes

The closing processes fulfil the necessity of the structured end with the formalized acceptance of the project or the individual phrase.

We can notice from Figure 2.2 that the project management processes groups are interconnected with the corresponding production results. The groups in the middle, namely, planning, controlling and executing processes, are iterative. It means that the planning processes would prepare data for the executing processes. The executing processes generate the reports for the controlling processes along with the feedback from the controlling processes to the planning and executing processes during the processing of the project.

Beside the groups of the project management processes, the standard of PMBoK also categorizes the project management into nine areas. They are the project integration management, project scope management, project time management, project cost management, project quality management, project human resource management, project communication management, project risk management and project procurement management.

2. 2 Project Risk Management

The project risk management concentrates on the adverse events during the implementation of the project. Four items are generally included. They are: the risk identification, which eliminates the possible risk in the project, the risk quantification, which rates the identified risks and the risk interrelation and evaluates the possible outcomes of the project under those negative factors. The risk development comes next. It prepares a counter plan to the threats, and the risk response control, which imbeds the changes in risk over the project (Neville 2005). “Risk management is the identification, assessment, and prioritization of risks (defined in ISO 31000 as the effect of uncertainty on objectives, whether positive or negative) followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities. Risks can come from uncertainty in financial markets, project failures (at any phase in design, development, production, or sustainment life-cycles), legal liabilities, credit risk, accidents, natural causes and disasters as well as deliberate attack from an adversary, or events of uncertain or unpredictable root-cause.” (Hubbard 2009).

Event Management

Being one of the successful applications of the theory, the event management is picked up due to the wide acceptance by the event holders after the brief discussion on the project management (Goldblatt 2002; Ramsborg, Miller, Breiter, & Reed 2008). In this subsection, the event and event risk management would be defined.

2.2.1 What is Event Management?

“As one of the important application of the project management, event management is a specialization aiming at managing, creating and developing festivals, events and conferences. In the study of event management, widely range of knowledge is involved, for instance, investigation of band dynamics, deviation of the event concept, development of the plan for logistic and coordination of the technical aspects. Indeed, all the components should be considered prior to the actual execution of the proposed event. Furthermore, post-even analysis and the ensuring of the investment return should be through after the event” (Rediff Pages 2011).

2.3  Risk Management in the Event Industry

            Risk is an element, which is present in all human endeavours. “Risk, which is uncertainty that has been defined, is a simple concept, a way of thinking through and planning a program or a project” (Barkley 2004, p.1). All activities contain an element of uncertainty, particularly time-limited projects, undertaken to achieve a single goal. Due to the high level of uncertainty, there is also a perceived high level of risk. Therefore, it is mandatory to try to understand and to control this risk using the risk management techniques. Risk management is “the process of identifying, analysing, and responding to business and project risk to minimise the consequences of adverse risk-based events” (Barkley 2004, p. 3).

            Event management is a complex and chargeable enterprise defined as an “emerging profession” (Silvers 2010). Although event management has existed for thousands of years, it is only in the last decade the event industry has gained its scope (Emery 2009). The planning and preparation of events involve bringing a reasonable number of people together at a certain place to participate in a pre-planned set of activities. Some events can be relatively small scale and limited in space. While other events are long-lasting, short ones involve hundreds and even thousands of people and may include some tourists. These parameters do not detract from the fact that risks are involved in the realisation of the event. The risks range from business risks to physical hazards and must be all assessed in order to protect against their most adverse effects and to provide contingency plans. A number of academic and institutional studies have been conducted on risk management in the event industry. The most significant of them are discussed in this chapter.

2.4 Relation between Project Management and Event Management

Event management is one of the successful applications of project management. Due to the increased complexity of holding an event, especially for the corporate groups, event managers in the large companies tend to follow the management process in order to gain the full control of the event. Gradually, the event management becomes a formal field of study. Indeed, terminologies and meanings are shared between the two management studies. It facilitates the adoption of the event managers to apply the approaches and tools from the project management.

Event management is a specialized framework that handles events taking into account some knowledge of the project management. Having adopted the event management, the managers can benefit from the standard framework in the processes definition, standardization of  the documents, clearly defined roles of stakeholders, reference command chain, easiness of tracking, systematic control, supported by EMBoK, coherent and transferable methodology, standardized processes and documentation, productivity improvement , and facilitating the process of auditing.

Those benefits and characteristics show up with the adoption of the project management, so that two management methodologies are connected with inevitable relationship. However, as a subclass of the project management, the event management has its unique features to suit the particular application. In the next subsection, the difference will be briefly discussed.

2.5 Difference between Project Management and Event Management

The key function of the event management is to handle the occasions, occurrences or incidences, for instance, meetings, seminars, conferences, parties, and sports activities, which happen to be the intangible activities. On the other hand, according to the PMBoK, the project management deals with the one-off tasks, in terms of both tangible and intangible activities, under the constraint of time, quality, and cost, and it is a top-notch class of the event management. However, both management metrologies involve people. The successfulness is based on the efficient use of human resource in the event management. The tasks completion plays a crucial role in the project management as well (Olufemi 2010).

2.6 Introduction to EMBoK

With the standardization of the event management provided by the event management body of knowledge (EMBoK), the discussion of the event management can be held on common base.

Phases Aspect

The sequential character of the event management can be shown spatially with the components of initiation, planning, implementation, event, and closure; while the terminology and meanings are aligned with the terms used in the traditional project management.

Processes Aspect

Both sequential and iterative character of an event as well as the dynamic approach to its handling can be reflected by the processes aspect, and the aspect consists of five elements, which are assessment, including identification and the related analysis, selection, monitoring, communication, and documentation.

Core Values Aspect

The core values aspect reminds the event holders that the specified principle should be imposed throughout such elements like the phases and the processes. The components, constituting the aspect, are very important. They are a continuous improvement, creativity, ethics, integration, and strategic thinking.

Knowledge Domains Aspect

The aspect defines all the common functions and the responsibilities of a typical event, and they are subdivided into five categories: administration, design, marketing, operations, and risk. Their corresponding functional units are shown in Figure 2.6.

Figure 2.6.      Event Management Body of Knowledge Domain Structure (Julia 2011).

The event management shares the similar content with the project management, but it contains some special and unique elements to suit the distinct necessity of holding an event. Specifically, the event management  aims to protect the client from dangers and to make sure the event can be conducted smoothly in terms of risk components, while the risk in the project management aims to ensure the delivery of the project within the constraint free from the expected risk (Event Management & Planning Guide 2011).

2.7 Illustrations of Risks in Events

Three examples, which include the general tourism events, the adventure tourism events, and the major sports events, were selected to be closely researched based on the functions and characteristics of the event management. Furthermore, the particular risk would be identified to facilitate the construction of the proposed model.

2.7.1 Event Tourism

Travel is by its nature more risk prone than activities that are held in the same place. Event tourism that requires travelling by groups of people is particularly exposed to more risky occurrences, given that logistics and safety allocations for a large number of people tend to be more difficult to predict and control than for a single person. The alteration of location and duration also means that it is more difficult to foresee the results in the greater uncertainty. Tourists tend to be adventurous and sometimes forget to take regular precautionary measures. Common risks that tourists are prone include personal injury due to accidents or criminal activity. Illnesses in the course of exposure to certain elements or to contaminants are of a major concern as well. Increasingly, the personal threat or injury due to terrorist activities or other atrocities is also becoming a major risk concern in the event tourism.

Tourists have also expressed concern about the performance quality of the travel service provider, the quality of food and the quality of accommodations. Finally, there are the smaller and more routine concerns involving the lost luggage, the delayed flights or trips, the lack of mobile phone service coverage, the activities planned, and the chance for event tourists to see some local sites, to try local cuisine or to go shopping. Other risks may be less tangible and more psychological, such as the fear of running out of money, getting lost, being left behind the group, and the fear of transgressing local cultural norms (Simpson & Siguaw 2008; Kemp 2009).

Event tourism is a special experience of travelling. Its primary objective is to provide the opportunity to the individuals or families to get exposed for the wide range of native cultures, language, society, and food by the tour around the world, so that their life can be enriched and colourful. With such an objective, a complex planning is required for the perfect journey. Unfortunately, the risks exist in the event tourism. A set of risks have been identified in Figure 2.7.

Figure 2.7.      Risk factors from Unique Feature of Event Tourism (Cassidy 2011).

2.7.2 Adventure Tourism Event

Adventure tourism, which is different from the conventional tourism, like event tourism, is an exciting travelling experience based on getting delight from the outdoor activities, conducted in an unusual, exotic, remote and wild environment. “Adventure tourism is an outdoor leisure activity that generally takes place in an unusual, exotic, remote or wilderness setting, sometimes involving some form of unconventional means of transportation and tending to be associated with the low or high levels of physical activity. As the name suggests, it entails an element of risk and can range from ‘getting wet,’ to ‘getting high’, and to ‘getting faster’ (Maria 2011). Sometimes the tour includes some unordinary transportation with the low or high level of physical activity. For instance, three categories of activities, which include aviation-related, land-based and water-based activates (Figure 2.8), are selectively involved in the tour in New Zealand. It can be seen from the figure that the risk of the activities is very high, and the prevention mechanism should have some better protection to the people. Therefore, there should be high chances of the unique risk factors coming from this area.

Figure 2.8.      Three areas of adventure tourism in New Zealand (Bentley, Stephen, & Keith  2011).

Under those activities, the risks are inescapable, so it is common to all tourism authorities to impose a certain mechanism in order to prevent the accidents (David 2009). We can see from Figure 2.9 that the risk factors, namely client, equipment, environmental, management & organizational and extra-organizational influences are identified to facilitate the ease of the management by the New Zealand Government (Bentley, Stephen, & Keith 2011). However, the matters of concern cover only the safety requirements of the event. There is a lack of the accident occurrence prevention.

Figure 2.9.      Risk factors on Adventure Tourism in New Zealand (Bentley, Stephen, & Keith 2011).

2.7.3 Major Sports Event

The major sports events refer to the sporting events that are held annually or every few years, and their magnificence is worth waiting for them. With the mega size, special management techniques should be applicable to suit the complexity. Some examples of the major sports events are the Olympic Games, the FIFA World Cup, and the Rugby World Cup (Topend Sports Network 2011).

For the huge event, the risks are inevitable, so the risk identification is an important procedure for the management. According to the UK sports statistics (Figure 2.10), the risks for a major sport event can be defined as the internal and external risks as well as distributed to six aspects, such as budget, timescale, relationships, policy, people, and natural ones (Fuller 2011).

Figure 2.10. External and Internal Risks for the UK Sport Event (Fuller 2011).

In the next section, the proposed model will be formed under those risk factors which have already been identified before. An explanation will be given on the formation of proposed model. 

Proposed Model

After an extensive research of the literature conducted, the risk factors have been identified from three selected areas which are tourism, adventure tourism and major sports. The proposed model will be formed under those risk factors, and they are figures 2.3, 2.4, 2.5, and 2.6. For a better readability, those risk factors have been grouped into seven categories: Risk of People (staff/Clients), Risk of Costing, Risk of Control, Risk of Natural Factor, Risk of Health and Safety Issues, Risk of Legal and Ethical Issues, and Risk of Management and Organization. Summarizing, there are sixty four risk factors under seven categories in totals. Figure 2.11 shows the completed proposed model for this study. 

Figure 2.11. Risk factors pivot table

CHAPTER THREE: METHODOLOGY

3.1 Introduction

The objective of this chapter is to explain the methodology and to provide details of the research design. Theories behind the Delphi technique and focus groups will be discussed, and the design of the interview and validation will be explained.

Research design

3.2 Methodology

Methodology can be referred as a theoretical analysis of a working method or a constructive framework which gives a systematic procedure or process of a branch of knowledge to attain the objective of the study. In the thesis, the secondary research is used, and the results will be discussed after the validation through interviews.

3.3 Secondary Research

The secondary research involves collecting existing data from the external sources, mainly journals, textbooks, magazines, and government publications. After the examination of the external sources, a thorough literature review is conducted, and a model is proposed. The model is based on the previous findings and newly received data. The proposed model will then be validated by managers in the event industry to generate a final model dealing with the critical risk factors in the Hong Kong event industry.

3.4 Validating

The validation of the findings from the literature review is the next crucial step that needs to be done. Therefore, interviews were used to communicate with the project managers within the Hong Kong event industry. The purpose of the interviews was to determine the preliminary model and whether it is suitable to implement in the Hong Kong event industry. Opinions were collected after the validation to confirm that the proposed model is appropriate for the future use.   

For the validation of the proposed model, a focus group has been set up with a team of managers, working in the event industry. To maintain a focus group, the managers were given few open-end questions, and by answering those questions, they would give their opinions on the proposed model. The open-end questions were established based on the criteria of this project, and this would be a crucial part of validating this research.

The Delphi technique was applied to rank the risk factors. There were three rounds of ranking, and each event manager was required to rate each risk factor. The scores range from -3 to +3, where -3 is the lowest score, and +3 is the highest score. Ultimately, the event managers will provide their own insight on the proposed model to help identify the main risk factors in the Hong Kong event industry.

According to Clapper (1996), a focus group is a common qualitative tool widely used in the academic research, public and private policy making, and business decision making. A group of experts is gathered and interviewed to come up with the creative ideas or concepts. The differences among participants are studied, and the qualitative and quantitative results of questionnaires or surveys are interpreted. Massey (2010) suggests that focus groups are unique because they provide data from individuals who are a part of a larger group. For this thesis, it is the best to have a small focus group because there will be more interaction between the members. The interview questions are open-ended in order to obtain the maximum amount of information from the experts. The information that is provided from the experts will determine whether the proposed model has enough risk factors for the Hong Kong event project. 

There were three participating experts in the focus group. They were the event manager at FETE HK, the event manager at Beacon, the event planner at WWF HK. They assumed a liability to provide accurate information for this study. After gathering all information and data from the experts, the next step was to rank the risk factors and find out how important those risk factors were. In order to do this, the Delphi technique was used.  

3.4.1 The Delphi Technique

According to Keeney (2000), the Delphi technique is a method to gain consensus from a panel of experts. It originated in a non-profit RAND Corporation for improving a policy and decision making through the research and analysis (Gordon 2007). According to Steinert (2008), the Delphi technique is widely recognised and used in the social and natural sciences, engineering, and economics.

The original Delphi technique involves a multi-stage process consisting of a series of interview rounds. During the first round, a questionnaire is given to the panellists. It is different from a questionnaire where the Delphi is aiming to gain a consensus with the panellists.  The objective is to suggest as many issues as possible, which will then be analysed to form a second questionnaire. After the second round, the panellists reconsider the issues and provide further thoughts. The results are discussed in the next round until a consensus is achieved.

According to Delbecq et al. (1975), two or three rounds of the Delphi technique for a general study are often more than enough. He also suggested that the studies with many rounds of the technique showed a declined rate of responses. The reason was the continuous effort that they put in for every survey round and irritation, caused by it.     

In this study, three experts from the Hong Kong event industry were taking part in the research, based on Delphi method. They were the event consultant at KKLimited, the event manger at Reed Exhibition, and the event manager at Evergreen Horizon Company Ltd respectively. They were given three rounds of the survey, and for each round, they were asked to rate each risk factor by giving scores from -3 to +3, where -3 is the lowest score, and +3 is the highest one. Results were collected from the managers for the readjustment and the feedback in the end of each Delphi method round. After three rounds of ranking, a total score was added up for each risk factor, and the risk factors with negative scores were eliminated. Hence, the further analysis was carried out with the remaining risk factors.