Managing Project Risks

Cover
Title Page
Copyright Page
Contents
About the Authors
Prefaceto the Second Edition
Preface to the First Edition
Acknowledgments
Glossaryof Terms
Chapter 1 Introduction
	1.1 Introduction
	1.2 The Project Perspective
	1.3 The Project Stakeholder Perspective
	1.4 Overview of Contents
	1.5 Limitations Caveat
Chapter 2 An Overview of Risk
	2.1 Chapter Introduction
	2.2 Risk Definitions
	2.3 Threat and Opportunity
	2.4 Risk and Uncertainty
		2.4.1 Uncertainties in the Type of Risk Trigger Events
		2.4.2 Uncertainties in the Occurrence of Risk Events
		2.4.3 Uncertainties in the Period of Exposure to Risk Events
		2.4.4 Uncertainty in the Type of Consequences of Risk Events
		2.4.5 Uncertainty in the Magnitude of Risk Consequences
		2.4.6 Uncertainty in Periods of Exposure to Risk Consequences
	2.5 The Dynamic Nature of Risk
	2.6 Psychology and Perceptions of Risk
	2.7 Risk Awareness
	2.8 Classifying Risk
		2.8.1 A Generic Source Event Risk Classification System
		2.8.2 Natural Systems Risks
		2.8.3 Human Risks
		2.8.4 Risk Classification Based on Organisational Structure
		2.8.5 Risk Classification Based on Project Phases
		2.8.6 Customised Hybrid Approaches to Risk Classification
		2.8.7 Multisystem Risk Classification
	2.9 Risk Communication
	2.10 Chapter Summary
	References
Chapter 3 Projects and Project Stakeholders
	3.1 Introduction
	3.2 The Nature of Projects
	3.3 Project Objectives
		3.3.1 Procurement Objectives
		3.3.2 Operational Objectives
		3.3.3 Strategic Objectives
	3.4 Project Phases
	3.5 Composition of Projects
	3.6 Processes of Project Implementation
		3.6.1 IT Project Example
		3.6.2 Ideation and Concept Development
		3.6.3 Project Development Stage
		3.6.4 Project Deployment and Operation
		3.6.5 Operational Maintenance
	3.7 Organisational Structures for Projects
	3.8 Project Stakeholder Relationships
	3.9 Stakeholder Organisational Structures
		3.9.1 Simple Structures
		3.9.2 Machine Bureaucracies
		3.9.3 Professional Bureaucracies
		3.9.4 Divisionalised Forms
		3.9.5 Adhocracies
	3.10 Modes of Organisational Management
	3.11 Project Stakeholder Decision-Making
	3.12 ‘Risky’ Projects
	3.13 Chapter Summary
	References
Chapter 4 Project Risk Management Systems and Frameworks
	4.1 Chapter Introduction
	4.2 Risk Management
	4.3 Risk Management Systems
	4.4 Risk Management Standards and Guides
	4.5 A Cycle of Systematic Project Risk Management
		4.5.1 A: Establish the Context
		4.5.2 B1: Identify Risks
		4.5.3 B2: Analyse Risks
		4.5.4 B3: Evaluate Risks
		4.5.5 C: Respond to Risks
		4.5.6 D: Monitor and Control Risks
		4.5.7 E: Capture Project Risk Knowledge
	4.6 Project Stages and Risk Management Workshops
		4.6.1 Construction Project Example
		4.6.2 The DB Design-Bid Stage
		4.6.3 The DB Build Stage
		4.6.4 IT Project Example
	4.7 A Project Risk Register Template
	4.8 RMS Integration
	4.9 RM Governance and Responsibility
	4.10 Joint Venture RMS
	4.11 Project Client RM Requirements
	4.12 Chapter Summary
	References
Chapter 5 Project Risk Contexts and Drivers
	5.1 Chapter Introduction
	5.2 The Contextualising Process
	5.3 Internal Contexts as Risk Drivers
	5.4 External Contexts as Risk Drivers
		5.4.1 Physical Contexts
		5.4.2 Technical Contexts
		5.4.3 Economic Contexts
		5.4.4 Social Contexts
	5.5 Using Contextual Information
	5.6 Chapter Summary
	Reference
Chapter 6 Approach to Project Risk Identification
	6.1 Chapter Introduction
	6.2 Approach to Risk Identification
	6.3 Workshop Timing
	6.4 Types of Risk Identification Techniques
		6.4.1 Activity-Related Techniques
		6.4.2 Analytical Techniques
		6.4.3 Associated Representative Techniques
		6.4.4 Functional Value-Related Technique
		6.4.5 Matrix Combinations
		6.4.6 Simulation or Visualisation Techniques
		6.4.7 Speculation Techniques
		6.4.8 Structural or Management Techniques
	6.5 Chapter Summary
	Reference
Chapter 7 Project Risk Identification Tools
	7.1 Chapter Introduction
	7.2 Activity-Related Tools
		7.2.1 Work Breakdown Structures
		7.2.2 Bar Charts
		7.2.3 Critical Path Networks
	7.3 Analytical Tools
		7.3.1 Decision Tree Analysis
		7.3.2 Event Tree Analysis
		7.3.3 Fault Tree Analysis
		7.3.4 Failure Modes and Effects Criticality Analysis
		7.3.5 Hazard and Operability Studies (HAZOPS)
		7.3.6 Safety Hazard Analysis (SHA)
	7.4 Associated Representative Tools
		7.4.1 Contextualisation
		7.4.2 Checklists
		7.4.3 Financially Related Tools
		7.4.4 Procedural Manuals Tools
		7.4.5 Design/Cost Related
		7.4.6 Risk Related
	7.5 Matrix Combinations Tools
	7.6 Simulation or Visualisation Tools
	7.7 Speculation Tools
		7.7.1 Scenario Testing
		7.7.2 Stress Testing
	7.8 Structural or Management Tools
	7.9 Risk Identification Statements
	7.10 Chapter Summary
	References
Chapter 8 Project Risk Analysis and Evaluation
	8.1 Chapter Introduction
	8.2 Qualitative Analysis
	8.3 Assessing Likelihood
	8.4 Assessing Impacts
	8.5 Evaluating Risk Severity
	8.6 Quantitative Analysis
	8.7 Risk Mapping
	8.8 Chapter Summary
	Reference
Chapter 9 Risk Response and Treatment Options
	9.1 Chapter Introduction
	9.2 Risk Attitudes and Appetites
	9.3 Existing Risk Controls
	9.4 Risk Response Options
		9.4.1 Risk Avoidance
		9.4.2 Risk Transfer
		9.4.3 Risk Reduction and Retention
		9.4.4 Risk Retention
		9.4.5 Combination Responses to Risk
	9.5 Risk Treatment Options
	9.6 Risk Mitigation Principles
	9.7 Strategic use of ALARP
	9.8 Re-assessment
	9.9 Recording Decisions
	9.10 Chapter Summary
	References
Chapter 10 Risk Monitoring and Control
	10.1 Chapter Introduction
	10.2 Assigning Responsibility
	10.3 Monitoring Procedures
		10.3.1 Negligible Risks
		10.3.2 Low Risks
		10.3.3 Medium Risks
		10.3.4 High Risks
		10.3.5 Extreme Risks
	10.4 Control Measures
		10.4.1 Negligible Risks
		10.4.2 Low Risks
		10.4.3 Medium Risks
		10.4.4 High Risks
		10.4.5 Extreme Risks
	10.5 Reporting Processes
	10.6 Dealing with New Risks
	10.7 Disaster Planning and Recovery
	10.8 Capturing Project Risk Knowledge
	10.9 Chapter Summary
Chapter 11 Project Risk Knowledge Management
	11.1 Chapter Introduction
	11.2 Knowledge Definitions and Types
		11.2.1 Knowledge Transformation
		11.2.2 Types and Forms of Knowledge
		11.2.3 Organisational Culture and Knowledge Management
	11.3 The Knowledge Creation Cycle
		11.3.1 Stage 1 (Tacit to Tacit): Use and Validate
		11.3.2 Stage 2 (Tacit to Explicit): Identify and Capture
		11.3.3 Stage 3 (Explicit to Explicit): Codify and Store
		11.3.4 Stage 4 (Explicit to Tacit): Share and Update
		11.3.5 Using and Validating Knowledge
		11.3.6 Identifying and Capturing Knowledge
		11.3.7 Codifying and Storing Knowledge
		11.3.8 Sharing and Updating Knowledge
	11.4 Additional Issues of Organisational Culture
		11.4.1 KMS Alignment and Information Redundancy
		11.4.2 Tools and Techniques for Eliciting Risk Knowledge
		11.4.3 Brainstorming Sessions
		11.4.4 Storytelling
		11.4.5 Communities of Practice
		11.4.6 Networking
		11.4.7 Project Reviews, Project Debriefings and ‘Lessons Learned’
		11.4.8 Mentoring and Apprenticeships
		11.4.9 Induction and Training Courses
		11.4.10 Workplace Design
		11.4.11 People Finders
		11.4.12 Intranets and IT Platforms
		11.4.13 Internet Search Engines and Alerting Services
		11.4.14 Organisational Culture
		11.4.15 PRMS-Related Tools
		11.4.16 Developing Organisational Risk Wisdom
	11.5 Project and ORR Architecture
		11.5.1 Capturing Project Risk Experiences
		11.5.2 PRRs
		11.5.3 Beyond the Project Level is the ORR
	11.6 Challenges for Implementing RKMSs
		11.6.1 Issues Relating to Knowledge Itself
		11.6.2 Storing, Accessing and Using Knowledge
		11.6.3 Knowledge System Development and Implementation Costs
		11.6.4 Concern with Financial Issues and Return on Investment
		11.6.5 Concern with Time Management and ‘Unproductive Tasks’
	11.7 Communication and Risk Knowledge Management
	11.8 AI
	11.9 Chapter Summary
	References
Chapter 12 Cultural Shaping of Risk
	12.1 Chapter Introduction
	12.2 Culture in Society
	12.3 Organisational Cultures
		12.3.1 Organisational Scans
		12.3.2 The Organisational Scanning Process
	12.4 External Cultures as Project Risk-Shapers
		12.4.1 Media Scans
	12.5 Organisational Cultures of Other Project Stakeholders
	12.6 Applying Cultural Shaping in Project Risk Management
	12.7 Chapter Summary
	Reference
Chapter 13 Project Complexity and Risk
	13.1 Chapter Introduction
	13.2 The Concept of Complexity
		13.2.1 Differentiation
		13.2.2 Inter-dependency
	13.3 Relative Complexity
	13.4 Uncertainty and Project Complexity
	13.5 An Early-Stage Project Complexity Assessment Tool
	13.6 Identifying and Mapping Complexity
	13.7 Influence of Complexity on Risk Management
	13.8 Complexity and Mega-Projects
	13.9 Chapter Summary
	References
Chapter 14 Political Risk
	14.1 Chapter Introduction
	14.2 Political Spheres
	14.3 Dimensions of Political Risk Factors
	14.4 Examples of Political Risks
	14.5 Political Stakeholders
	14.6 Managing Political Risks
		14.6.1 Contextualising
		14.6.2 Identifying Political Risks
		14.6.3 Analysing and Assessing Political Risks
		14.6.4 Responding to Political Risks
		14.6.5 Monitoring and Controlling Political Risks
		14.6.6 Knowledge Capture
		14.6.7 In-House Political Risks
	14.7 More Extreme Political Threat Risks
	14.8 Professional Misconduct
	14.9 Corruption
		14.9.1 Conflict of Interest
	14.10 Chapter Summary
	References
Chapter 15 Planning for Crisis Response and Disaster Recovery
	15.1 Chapter Introduction
		15.1.1 Crisis
		15.1.2 Disaster
	15.2 Crises
		15.2.1 Snowy Hydro 2 Scheme
		15.2.2 COVID-19 Pandemic
		15.2.3 Australian Housing Crisis
		15.2.4 Australian Telco Crises
	15.3 Disasters
		15.3.1 Whakaari White Island Disaster
		15.3.2 Floods and Fires
		15.3.3 Asylum Seeker Disasters
	15.4 Planning for Crisis Response and Disaster Recovery
		15.4.1 Strategic Management
		15.4.2 Strategic Planning Management
		15.4.3 The Champlain Towers Disaster
		15.4.4 Leadership and Management Control
		15.4.5 Regulatory Environments
		15.4.6 Human Resource Management
		15.4.7 Resources Management
		15.4.8 Utilities and Services
		15.4.9 Security and Crime
		15.4.10 Health Services Management
		15.4.11 Environment
		15.4.12 Cross-border Co-operation and Management
		15.4.13 Communications Management
	15.5 Risk Management for Crisis Response and Disaster Recovery Planning
	15.6 Chapter Summary
	References
Chapter 16 Opportunity Risk Management
	16.1 Chapter Introduction
	16.2 Concept of Opportunity Risk
	16.3 Opportunity Risk in Projects
	16.4 Examples of Opportunity Risks
		16.4.1 IT Brand Product Personalisation Service
		16.4.2 Botanic Gardens Special Display Project
		16.4.3 Case Study A (PPP Correctional Facility)
		16.4.4 Case Study C (Aid-Funded Pacific Rim Island Civic Project)
	16.5 Managing Opportunity Risks
		16.5.1 Implications for Personnel
			16.5.1.1 SP1: Exchanging Ideas Too Early and Too Often Hinders Their Diversity and Potential to Innovate
			16.5.1.2 SP2: The Workplace Should Promote Absurdity
			16.5.1.3 SP4: Adversities Are Worth Keeping, Even Introduced, in the Workplace to Promote Innovation
			16.5.1.4 Artificial Intelligence (AI)
			16.5.1.5 Implications for the Project RMS
			16.5.1.6 Context Establishment
			16.5.1.7 Risk Identification
			16.5.1.8 Risk Statements
			16.5.1.9 Risk Analysis
			16.5.1.10 Risk Evaluation
			16.5.1.11 Risk Response
			16.5.1.12 Monitoring and Control
			16.5.1.13 Knowledge Capture
	16.6 Chapter Summary
	References
Chapter 17 Strategic Risk Management
	17.1 Chapter Introduction
	17.2 Strategic Issues for Project Risk Management
		17.2.1 Project Risk Management System (PRMS) Implementation
		17.2.2 System Separation/Integration
		17.2.3 System Inception
		17.2.4 Initial System Application
		17.2.5 Roles and Responsibilities
		17.2.6 PRMS Process Approach
		17.2.7 Risk Knowledge Management
		17.2.8 PRMS Maintenance and Development
		17.2.9 Crisis Response and Disaster Preparedness
	17.3 PRMS Process Strategies
		17.3.1 Project Contextualisation
		17.3.2 Project Risk Identification Strategies
		17.3.3 Quantitative and Qualitative Risk Analysis Strategies
		17.3.4 Risk Response and Treatment Strategies
		17.3.5 Risk Monitoring and Control Strategies
		17.3.6 Risk Knowledge Capture Strategies
	17.4 Chapter Summary
	References
Chapter 18 Planning, Building and Maturing a Project Risk Management System
	18.1 Chapter Introduction
	18.2 PRMS Objectives
	18.3 Planning and Designing the PRMS
		18.3.1 Planning the PRMS
		18.3.2 Designing the System
	18.4 Risk Management Maturity
		18.4.1 Level 1 PRMS Maturity (Mostly Unaware)
		18.4.2 Level 2 PRMS Maturity (Starting)
		18.4.3 Level 3 PRMS Maturity (Growing)
		18.4.4 Level 4 RM Maturity (Maturing)
	18.5 Building the PRMS
		18.5.1 Organising the PRMS Project
		18.5.2 PRMS Specialists
		18.5.3 System-Building Tasks
		18.5.4 Component Testing
		18.5.5 PRMS Trials
		18.5.6 PRMS Roll-Out
	18.6 PRMS Performance Review and Improvement Cycle
		18.6.1 Review Criteria
		18.6.2 System Benchmarking
		18.6.3 Addressing System Decay
		18.6.4 Review Frequency
	18.7 Chapter Summary
	References
Chapter 19 Computer Applications
	19.1 Chapter Introduction
	19.2 PRMS Software Applications
		19.2.1 Tables and Matrices
		19.2.2 Spreadsheets
		19.2.3 Project Management Systems
		19.2.4 Bespoke RKMS
	19.3 Other Information Technologies and Tools
		19.3.1 Simulation Systems
		19.3.2 Smart Sensors
		19.3.3 Aerial Drones
		19.3.4 Building Information Modelling
	19.4 Chapter Summary
Chapter 20 Communicating Risk
	20.1 Chapter Introduction
	20.2 Communication Theory and Models
		20.2.1 Other Theory Elements of the Model
		20.2.2 Processes in the Model
	20.3 Components in the Communication Process
		20.3.1 Senders
		20.3.2 Receivers
		20.3.3 Messages
		20.3.4 Media
		20.3.5 Channels
		20.3.6 Relays
		20.3.7 Filters
		20.3.8 Interference
		20.3.9 Feedback
	20.4 Communicating Risk in the PRMS Cycle
	20.5 Communicating Project Risk Beyond the Project Stakeholder Organisations
		20.5.1 Promotional Announcements
		20.5.3 Social Amplification of Risk
		20.5.4 Social Licence
		20.5.5 Communication in Extensive Advisory Loops
	20.6 Evaluating Risk Communication
	20.7 Chapter Summary
	References
Chapter 21 Conclusions
	21.1 Chapter Introduction
	21.2 Current State of Project Risk Management
		21.2.1 Changes in Business Conditions
		21.2.2 More Serious Risk Impacts and Consequences
		21.2.3 Public Expectations and Regulations
		21.2.4 Publication of Standards and Texts
		21.2.5 Psycho-Social Emphases
		21.2.6 Tertiary Curriculum Changes
		21.2.7 Continuing Issues with Contemporary PRMS
	21.3 Future Project Risk Management
	21.4 Checking Your Reading Satisfaction
		21.4.1 Risk
		21.4.2 Projects
		21.4.3 PRMS
		21.4.4 Risk Contexts
		21.4.5 Risk Identification
		21.4.6 Risk Assessment
		21.4.7 Risk Response
		21.4.8 Risk Monitoring and Control
		21.4.9 Risk Knowledge Management
		21.4.10 Risk and Culture
		21.4.11 Complexity
		21.4.12 Political Risk
		21.4.13 Planning for Crisis Response and Disaster Recovery
		21.4.14 Opportunity Risk
		21.4.15 Strategic Risk Management
		21.4.16 Building and Maturing a PRMS
		21.4.17 Computer Applications
		21.4.18 Communicating Risk
		21.4.19 Case Studies
	21.5 Closing Remarks
Case Study A: PPP Correctional Facilities Project
Case Study B: Rail Improvement Project
Case Study C: PM Consultant and Government-Aid-Funded Pacific-Rim Project
Case Study D: High-Capacity Metropolitan Train Mock-up Project
Case Study E: Hot-Rod Car Project
Case Study F: Aquatic Theme Park Project
Case Study G: Risk Governance Guidance Document
Case Study H: Rise and Fall of a Plumbing Company
Index
EULA