18 Project Risk&Disaster Mgt_An overview_Amos.pdf

Over view of project risk management

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PROJECT RISK & DISASTER
MANAGEMENT
Introduction, Overview and Concept
definitions
Session content
Introduction to the Module
Defining a Project Risk

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Attributes of a Risk
Possible Project Management Risks
Introduction
The module Project Risk & Disaster
Management aims at equipping project
managers and project implementers with the
knowledge and skills of planning for and
implementing projects without being
adversely affected by the risk events and their
outcomes.

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Introduction Cont…
The module helps:
Plan, determine and document the risks
likely to affect a project.
Evaluate risks and their interactions to
assess the range of possible outcomes.
Define and come up with enhancement steps
for opportunities and responses to risks.

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Introduction cont…
• Respond to changes in risks over the project
life.
• How to respond to Disasters and how they
can be avoided (Hazard (or Risk?) +
Vulnerability= Disaster)
• VAF (Vulnerability Assessment
Framework)

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Key Notes
The project interacts with the external
environment that cannot be controlled by the
Project Manager & Staff. The environment
can provide opportunities or threats to the
project.
A project Manager, therefore, needs to know
all about this so as not to be caught off guard.
Need for clear SWOT Analysis.
No venture can be undertaken without some
degree of risk. This, however, depends on the

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attitude one has towards the risk (risk averse, neutral
& risk takers).
The world experiences a wide range of Disasters,
both natural and man made (Floods, Earthquakes,
Droughts, etc). These have stimulated varying
responses, reactions and formation of projects in a
short time. There are enormous disaster outcomes
that need to be controlled. Disasters and Projects
are related.

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Definition of Risk
There is no clear definition of a risk. This is
because different professionals define the
term differently:
•IT
•Statistics
•Finance
•Insurance
Statisticians: Degree of dispersion from the central
position. A common statistical approach used here is
the average and the standard deviation.

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Financial theorists: Perceive risks in matters like
financial/business risks. The concept is all about
investment and the value of money invested.
IT Professionals: Perceive risks in terms of data
system security, recovery and retrieval mechanisms.
Insurance theorists: Take risks as having a clear
and specific meaning- An event that should be
insured.
Decision Theorists: To a decision theorist,
the term risk is taken differently from the rest
of the descriptions (above). In this regard, a
risk condition exists when in making a

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decision, there is insufficient information
available regarding the risk event to calculate
the probability of the risk happening and the
alternative potential outcome.
What then is a Risk?
Given the background so far, what then is a risk?
According to the British standards, the term risk
is referred to as a chance of something happening,
that will have an impact on the set objectives. It is
measured in terms of consequences and likelihoods.
Webster Dictionary defines a risk as the exposure to

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chance of injury or loss, a hazard or a dangerous
chance
Risk: Project Management Perspective
A risk can be taken as a chance of
something happening that will have an impact
on the project objectives. A risk in this
perspective is a condition that if it occurs, will
have a positive or negative effect on the set
project objectives.

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Centre for Finance & Project Mgt - A Risk
is the potential for unwanted happenings or
consequences.
Possible Project Management Risks
The Project Mgt Triangle (the quality constraints of cost, scope and time)
is a model of the constraints of project mgt: the quality of work is constrained by the project's budget,
deadlines and scope (features).
Implementation risks (beneficiary support)
Behavioral risks (human attributes).
Organizational/institutional issues, e.g., change in
government policy or donor.

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Natural factors e.g., possibility of a drought,
death of a staff member, etc.
Consultant-client behavior and relationships.
Project Manager: Practical concern
• Whenever possible, risk factors should be
integrated into the project design so that
project actions can be taken to eliminate or
reduce them (risks): RBS-Risk Breakdown
Structure.
• Risk factors which are crucial to project
success and are probable, may stop or derail

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the project, should be highlighted and
carefully analyzed to establish how they can
be avoided or overcome.
Attributes of a Project Risk
•Focus on the future/Futuristic
•Have alternative possible outcomes (loss, gain,
threats or opportunities).
•Risks deal with probabilities.
•Risks require information-for decision making. The
information should be accurate and reliable.
•Risks must affect the project objectives (time, cost
and quality).

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Guiding question
With reference to your profession provide
definition(s) of a risk, and identify why a
project manager may need to plan for risk in
the project environment.
Risk Component
•Risks are recognized to have three major
components which project managers must
understand. These components are closely

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related to each other and include the
following: 1.Cause
2.Event
3.Effects/consequences
Determine whether the following are
examples of Cause, Event Or Effect:
-Incompetent Project Manager
-Bad weather
-Death of a Staff Member
-Inflation

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-Defective workmanship
-Drop in price of project product
-Project cost/time overrun
Risk Classification
1.According to Project Objectives (quality, cost,
time)
2.Risk According to Sources (political, economic,
technological, behavior)
3.Project Life Cycle
4.Degree of spread (particular vs fundamental)

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5.Availability of information (known vs unknown)
Project Risk Management Process
Steps in risk management process
There are six steps/processes in risk mgt
•Risk management planning
•Risk identification
•Qualitative risk analysis
•Quantitative risk analysis
•Risk response planning
•Risk monitoring and control
Source:PMBOK 2000:127-144 (must read!)

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How can risks be managed? (Risk Response
strategies)
•Avoidance
•Transference
•Mitigation
•Acceptance
Why manage risks (Benefits)?

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The process helps support and justify
decisions and enables efficient and effective
management of risks.
Enables decision makers to be systematic,
rational and less subjective.
Highlights to the management that there is a
range of possible outcomes.
Better contingency planning, and justification
for a contingency budget

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Critical reflection
• Why do Project Managers may need all
this background: (Different professional
elucidation)?
• If there were no risks, there would not be
Project Management. It would be an
administrative issue.

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Revision question:
a) In your library research, provide a scholarly and practical
understanding of a disaster.
b) Discuss the circumstances that qualify an event as a
disaster.
c) Give an account, (details and magnitude) of at three
disasters in Uganda in the last five years and show how
they affected people thereof.
d) Show how disasters are linked to Project Management.

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09/04/2021 16:47