1,721,013 research outputs found
Assessing and managing important risks
No full textA common problem in project risk management processes is the need to determine the relative significance of different sources of risk so as to guide subsequent risk management effort and ensure it remains cost effective.A common approach is to rank risks in terms of probability and impact to identify sources of risk which will receive the most attention. This paper examines the shortcomings of this technique in guiding the analysis and management of risks and considers the information needed for a proper assessment of importance. For cost-effective management it is desirable to distinguish not only between the size of impacts and probability of impacts occurring, but also other factors such as the nature of feasible responses, and the time available for responses. The paper offers some practical suggestions for dealing with this problem
Requirements for an effective project risk management process
No full textRequirements, for an effective risk management process carried out by a project participant are associated with the project context and characteristics of the participant. Project context can be characterized by the nature of the project, the immediate working environment, the identity and actions of other participants, and the progress of the project to date. Characteristics related to a particular project participant include motivation, capability, and perceived responsibilities in undertaking risk management. This paper discusses how these factors influence the manner in which project risk management processes should be undertaken
Factors influencing performance in organisations - a generic framework for management theory development
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The efficient allocation of risk in contracts
No full textThis paper considers how project risk should be allocated between clients and contractors, where significant project risk is characterized as uncertainty about project costs requiring explicit attention and policy or behaviour modification. The risk efficiency of cost reimbursement and fixed price contracts given different degrees of client and contractor risk aversion is considered first, using a novel form of model. Then the potential for efficient risk sharing is considered in a mean-variance framework. The concern in both cases is with clarifying the rationale for conventional wisdom and resolving conflicting rules of thumb. Finally, practical application of the analysis with a mixture of controllable and uncontrollable risks is discussed
Evaluating fixed price incentive contracts
No full textThis paper considers choosing between different forms of fixed price incentive contracts. The analysis assumes the underlying probability density function for project costs is triangular. The methods of evaluation considered are expected value, certainty equivalence and stochastic dominance. The latter two methods take into account the typical risk aversion of contractors and clients. The analytical form of project cost and incentive contract adopted offer a robust analysis suitable for a wide variety of practical situations. However, the methods of evaluation described could be applied to other forms of contract and cost distribution. <br/
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