OIE 542 RISK MANAGEMENT AND

DECISION MAKING
Foise Business School
Spring 2021

Welcome to OIE 542

WPI is dedicated to developing leaders who can advance innovative ideas and make positive
change in the world. Yet successfully advancing your ideas will require making decisions under
uncertainty, and understanding the risk associated with the decision alternatives. In this course,
you will develop the capacity to assess risk and evaluate decision alternatives.

Course Description:
Organizational decision-making faces a great deal of uncertainty: uncertainty arising from the
environment external to the organization, uncertainty in the effectiveness of decision outcomes,
and uncertainty regarding decision parameters. To simplify the decision-making process,
uncertainty is often treated deterministically or by using expected values. The objective of this
course is to improve your skill in recognizing, evaluating, and modeling uncertainty within a
decision-making process. Accordingly, the course is focused on three areas: risk assessment, risk
evaluation, and risk communication. Risk assessment techniques seek to integrate diverse
sources of information (i.e. qualitative and quantitative, objective and subjective) in order to
understand the uncertainties of the decision. Risk evaluation approaches discuss how to manage
uncertainty through action responses such as exposure avoidance, risk prevention or reduction,
and contingency planning. Throughout the course, techniques on how to communicate risk to a
non-technical audience will be discussed.

Application categories which will be covered including risk management for projects or new
products, operations management, facilities planning and control, technology choice, and
environmental risk.

The course emphasizes a normative and quantitative approach to operations risk management
including: decision trees, multi-attribute choice and Monte Carlo simulation. Coverage also
includes material from behavioral decision-making, and cognitive psychology.

Prerequisite Courses:

The course assumes an introductory understanding of probability and statistics.

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Learning Outcomes:
By the completion of this course, learners will be able to:

1. Implement various tools available for assessing, evaluating, and communicating risk.
2. Select an appropriate risk management technique for an operational decision under
uncertainty.
3. Construct a set of practical recommendations for a decision-maker.
4. Develop the ability to apply quantitative risk management and decision-making
techniques to your own work/company.

Instructor:
Renata Konrad, PhD
rkonrad@wpi.edu
Office: 205 Washburn Shops
Office hours: By appointment

Logistics: What you need to know...

1.Communication:

You can call me Professor Konrad.

There are three ways to connect with me and to ask questions:

1. Our Q&A discussion board: This is a great place to ask questions re: assignments, readings,
course materials, etc. I will check this board as soon as I can. Your classmates can also answer
your questions via this board. If you have a question, I recommend checking the discussion board
first.

2. Via email: rkonrad@wpi.edu. In general, I check email in the morning. Email is best for
personal questions, or to set up a time to meet via office hours.

3. There are no set office hours. I am open to scheduling a phone call or virtual meeting if
requested.

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 2. Textbook (and/or other Required Materials):

Required:
i. Decision Analysis for Management Judgment
Paul Goodwin and George Wright
Wiley; 5th edition (2014)
ISBN : 978-1-118-74073-6

ii. Case Studies (Available online through http://hbsp.harvard.edu/)

To access the coursepack use https://hbsp.harvard.edu/import/797219

Supplements:
Judgment in Managerial Decision Making
Authors: Max H. Bazerman and Don A. Moore
Publisher: Wiley; 7 edition (August 18, 2008)
ISBN-10: 0470049456
ISBN-13: 978-0470049457

Additional references are posted in Canvas.

3. Course Navigation:

Navigating assignments and materials:

o The HOME PAGE is your gateway for navigating the course on a week-by-week
basis.
o In each WEEKLY MODULE, you will find:
 A written overview of learning outcomes, readings and preparation
materials, and assignments. Read this overview first!
 Links to course materials and assignments.

• ANNOUNCEMENTS and EMAILS provide reminders and additional information as

needed. Please make sure to sign up for Announcements for our class.

• THE CALENDAR provides a list of all assignments and their due dates.

Synchronous Meet-Up: In the past, students have found it helpful for me to host synchronous
course meetups—in the evening. Please see the course canvas site for details. I will send out
invites as reminders.

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4. Weekly Course Mechanics/Rhythm:
i. Weekly Overviews:

Each week, the Course Overview will provide detail regarding the assignments for the upcoming
week. Read this first.
ii. Prepare

Each week will have assigned readings and/or cases that provide techniques and frameworks to
expand your thinking and enhance your decision-making and risk evaluation capabilities.
Being prepared involves thoroughly completing these readings and working through the
included questions, worksheets, assessments, etc. Canvas provides all details re: deadlines,
etc.

iii. In-practice exercises

Most weeks there is an "in-practice" exercise that will provide you the opportunity to put your
emerging risk assessment and decision-making skills into practice. You will then utilize our
weekly "In-practice" discussion board to reflect on this experience. For most in-practice
exercises, I recommend allocating 2 hours for preparation (lectures, readings) and 1 hour to
effectively implement your exercise.

iv. Contribute to our discussion board by Saturdays, midnight

Each week will have a dedicated discussion board. I will post discussion questions, or may ask
you to post discussion topics.
Weekly Class Rhythm

What When
Weekly, typically due Sunday nights,
Submit assessments (as assigned in canvas)
11:59pm
Weekly material: Intro to Week’s Materials and
Available on canvas Sunday at 11:59pm
Assignments; and case discussion
Not due, solutions will be available the
Complete In-Practice Exercise
following week
Contribute to Weekly Discussion Board Typically, due Saturday nights, 11:59pm

5. Course Schedule
Week Date Topics Read Prepare Case Project Work

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1 Jan Introduction Syllabus Enterprise Risk
31 Decision-Making Management
Heuristics Ch. 1 and Ch.2 at Hydro One
(individual)
Additional:
Gregory RS, Keeney RL. Making
smarter environmental
management decisions. JAWRA
Journal of the American Water
Resources Association. 2002 Dec
1;38(6):1601-12.
2 Feb 7 Defining and Kotek L, Tabas M. HAZOP study Intel (group)
Describing Risk with qualitative risk analysis for
prioritization of corrective and
preventive actions. Procedia
Engineering. 2012 Jan 1;42:808-15.

Carbone TA, Tippett DD. Project

risk management using the project
risk FMEA. Engineering
Management Journal. 2004 Dec
1;16(4):28-35.

Additional Reading
Card AJ, Ward JR, Clarkson PJ.
Beyond FMEA: The structured
what‐if technique (SWIFT). Journal
of Healthcare Risk Management.
2012;31(4):23-9.
3 Feb Structuring Ch. 3 and Ch. 4 KindyBis
14 Decisions: (group)
SMART,
Objectives, AHP
4 Feb Influence Ch. 7 (except for pages 162-164) Uljanik
21 Diagrams and Shipyard
Decision Trees (group)

5 Feb Expected Ch. 6 (pgs 115-121) Merck Submit

28 Monetary Value Ch. 8 (pgs 195-198) (group) Project Plan
and Risk Profiles
6 Mar Value of Ch. 9 Avalanche
7 Information (group)
7 Mar Uncertainty Ch. 12 Rent or Buy?
14 Management and How to Make Smarter Decisions (individual)
Sensitivity (HBS site)
Analysis
8 Mar Project Work Meet with instructor to discuss Why is Process
21 your project Improvement

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 So Hard?
(individual)
9 Mar Monte Carlo Ch.8 Spiegel
28 Simulation| (group)
Multi-Attribute Monte Carlo Simulation in Excel
Choice | Without Using Add-ins (HBS site)
Conflicting
Objectives
10 Apr 4 Risk Attitudes Ocean's Data Plan
Dilemma
(individual or
group –
Discussion
Board only)
11 Apr Group Decision Ch. 13 and Ch. 15 Information
11 Making Use by
Managers in
Decision Framing Decision
Making: A
Team Exercise
(group)
12 Apr Exam
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13 Apr Risk Management A Technical Note on Risk Submit one of
25 in Organizations Management (HBS site) Cheveron
(Group)
Additional Readings:
Trieschmann, J. S., R. E. Hoyt, and Noika (Group)
D. W. Sommer, 2005, Risk
Management and Insurance, 12th
edition (Mason: South-Western
College Publishing).

Chew DH, editor. Corporate risk

management. Columbia University
Press; 2008.
Breen E, Clearfield A, Klimczak KM.
ICGN corporate risk oversight
guidelines
14 May Project Final report
2 Presentations and
presentation

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Course Requirements:
1. Grade Determination Breakdown

Your course grade will be determined by your performance in the following areas:
1) Cases: 45%
2) Project: 30%
3) Exam: 20%
4) Participation: 5%

2. Assignments

Cases:
Each case requires the submission of a proposal to the decision-maker describing a proposed
approach to solving the problem described in the case. This could include methods, analysis,
and recommended course of action. Your proposal should be a maximum of 4 slides,
excluding any appendices. Supplementary material such as Models, data analysis, and
figures can be placed in the Appendix or notes section and referenced appropriately. Note
that the proposal is to be written for the decision-maker in the case (not for the instructor).
This means that you are required to read the case and develop an understanding of the
situation so you are able to address the case as if consulting the decision-maker. Do not
repeat the case basics in your write- up.

Project:
You will complete a course project which addresses a specific risk management problem.
Teams of three to four are encouraged. Students are to select a problem, pertinent to their
work, or career interests. The course project is intended to teach skills in problem
structuring, data acquisition and risk communication. The project is to focus on any system
or operation, identify and assess the risks associated with it, and evaluate a minimum of two
action responses. Project topic examples include new product decisions, environmental
management, or natural hazards; among many others.

Project deliverables include a proposal presentation, data plan, final report and final
presentation. More details will be available in Canvas.

Exam:
A critical part of this course is to ensure that you take away the fundamental analytical
frameworks necessary to analyze operational risk. Your final exam will assess your

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understanding of the analytical frameworks presented in class, as well as offer the
opportunity to critically reflect the material presented in class.

All assignments should be submitted via Canvas by the date indicated. Additional information
on this assignment will be provided in class and via Canvas.

Participation:
Your participation in our class discussions is essential to your learning and that of your
classmates.

Weekly discussions will take place on Canvas Discussion boards class meetings. Your posts
are due by Wednesday 11:59 PM.

You will not be judged on whether you give the “correct” answers. You will be evaluated on
your thoughtful and critical preparation and analysis of your experiences and those of
others. In evaluating your class participation, I look for the following indicators of quality
participation:
• Builds on other comments
• Provides a thoughtful, critical analysis of your own negotiation experiences or the
experiences of others
• Takes a position, but backs it up with evidence or logical reasoning

3. Late Work Policy

Late submission of cases, the exam and the project will be penalized (a letter grade a day).
Late submission of discussion board posts will receive a grade of F. In case of serious
unpredictable circumstances arrangements will be made. You must send the instructor an
email informing them of the situation before the due date. (Please see the section of the
syllabus related to Covid-19)

4. Re-Grading Policy

You have the right to request a re-grade of any of your exams, cases or project. However, you
should be aware that there is a procedure and a timeline for re-grades to be considered.
Ideally, a re-grade should be requested when the reasons for such re-grades are obvious (the
sums of the marks you got on every part do not add up to the total you received etc.). Be
aware that if the instructor misunderstood your answer during the first grading, it is probably
that is was not clear. Explaining what you meant afterwards will not earn you any points: it
should have been clear the first time around.

Note that I will not hand out extra projects/ homework to help students that do poorly on an
exam or project to boost their grades. This is an unfair policy to the rest of the class. Please
do not ask.

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 5. Class Participation Expectations and Criteria

Participation in the weekly discussion boards is a means to engage with your classmates,
share ideas, learn from one another and demonstrates to me your grasp of course concepts.
It is an important part of the learning experience. My expectations regarding your
discussion board participation are as following:

• Always respect other students’ contributions. If you think believe another student’s
comment is irrelevant, or in disagreement you’re your own view, politely provide an
alternative view
• When commenting, always add something new to the discussion, rather than merely
agreeing or disagreeing
• Use other sources to support your point where appropriate, but always fully reference
material taken from another source. In this way other students can go to the source
directly. Failure to cite a source will be considered plagiarism and WPI’s Academic
Honesty Policy will be followed.

Additional Help:
Technical Requirements:
The Academic Technology Center is a wonderful resource. They can be reached at atc@wpi.edu.

If you experience any technical difficulties with our course CANVAS site, you can always use the
help function in CANVAS (they offer WPI 24 hour service!) or contact the Information Technology
Services help desk in the Gordon Library, or via email: ITS@wpi.edu.

We will be using @Risk and Decision Tree software. Both of these applications can be accessed
via Remote Desktop (windows.wpi.edu) under the folder Palisade Decision Tools.

Writing Help:

Located on the first floor of Daniels Hall (room 116), the Writing Center is a valuable resource for
helping you improve as a writer. Writing Center tutors are your peers (other undergraduate and
graduate students at WPI) who are experienced writers themselves and who enjoy helping others
tackle thinking/writing challenges. Although a single tutoring session should never be seen as a
quick fix for any writing difficulty, these sessions can help you identify your strengths and
weaknesses, and teach you strategies for organizing, revising, and editing your course papers,
projects, and presentations. Writing Center services are free and open to all WPI students in all
classes, and tutors will happily work with you at any stage of the writing process (early

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brainstorming, revising a rough draft, polishing sentences in a final draft). Visit the Writing Center
website <wpi.edu/+writing> to make an appointment.

Library Access:
As a student at WPI, you have access to a variety of resources through the library. Use the link
here to access databases, e-journals, and/or e-books. You will be required to log in with your
WPI username and password to access materials.

WPI Policies:
Academic Integrity:
The WPI Business School expects students to behave in an ethical manner at all times. This
includes the legal acquisition of the rights to all assigned material. Digital material (such as
Harvard Business School Publishing cases and articles) typically limits the use to one buyer, with
no transfer of ownership or use. It is not considered ethical for students in FBS to pass digital
copies of material or paper reproductions that violate the terms of purchase. In simple terms,
this means that material purchased by one student may not be distributed to another student,
nor can one student accept material from another. Each student is expected to purchase his/her
own access to assignments. Otherwise, this will be considered a form of

Similarly, it is unethical to plagiarize. This includes using the thoughts, ideas, words, or
expressions of another in submitted academic work and representing them as one’s own, rather
than accurately and adequately attributing them to the original source. You are expected to be
familiar with the Student Guide to Academic Integrity at WPI that is available here.

Consequences for violating the Academic Honest Policy range from earning a zero on the
assignment, failing the course, or being suspended or expelled from WPI.

Common examples of violations include:

• Copying and pasting text directly from a source without providing appropriately cited
credit
• Paraphrasing, summarizing, or rephrasing from a source without providing appropriate
citations
• Collaborating on individual assignments
• Turning in work where a good portion of the work is someone else’s, even if properly cited

I draw your attention to some specific guidelines related to OIE 542:

Any use of analyses or any other material in any format from other sections of this course or a
similar course taught at any time in the past, at WPI, other universities, or the Internet, is a
violation of the Honor Code.

Accordingly, the following are examples of breaches of the OIE 542 honor code:

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• Obtaining information about assignments used in OIE 542from WPI students, or former
students
• Plagiarism, which includes the unauthorized use of previous years’ materials (e.g.,
examinations, case analyses etc.), is a violation of the Honor Code.

Academic Accommodations:

We at WPI strive to create an inclusive environment where all students are valued members of
the class community. If you need course adaptations or accommodations because of a
disability, or if you have medical information to share with us that may impact your
performance or participation in this course, please make an appointment with us as soon as
possible. If you have approved accommodations, please request your accommodation letters
online through the Office of Disability Services student portal. If you have not already done so,
students with disabilities who need to utilize accommodations for this course are encouraged
to contact the Office of Disability Services as soon as possible to ensure that such
accommodations are implemented in a timely fashion.
Email – DisabilityServices@wpi.edu
Phone – (508) 831-4908
On Campus – Daniels Hall, First Floor 124

Grading Policy:
You should assume at the outset that roughly 40% of the class will receive an A, 50% of the class
will receive a B, and remainder will be a C or lower. The grade distribution will typically result in
a grade point average for the class around 3.5. The particulars of each activity, as well as its
weight in the total course grade, are described below.

“A” grades are earned through exemplary contributions, comments, reflections, and
deliverables that:
1. Are well thought out and articulated,
2. Consider the decision being studied in its entirety, and not just a technical
analysis,
3. And effectively utilize the specific concepts or tools featured in the course
readings or other materials.

B grades: Work is done well, but is not exceptional. Understanding meets expectations.
Class discussion participation is adequate, but not exemplary. If you do everything that
you are asked and do it well, you may get a B, but not an A.

C grades: Work meets learning outcomes at a minimum level, has poor but acceptable
execution, and only minimally engages the complexity and tradeoffs covered in course
content.

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Course incompletes may be granted if the major part of the course is completed; however, no
additional credit can be given for missed class discussions beyond the end of the course. In
addition, in the case of an incomplete, the student is responsible for handing in the final work
within the WPI required timeframe of one (1) year. After this time, an incomplete grade changes
to a failing (F) grade.

Please keep in mind that the quality of your work is always more important than the
quantity/length, however some quantity is necessary to generate the quality. You are also
encouraged to disagree or inquire more deeply about assumptions with other students and the
professor in respectful ways that enlighten and move your analyses and discussions forward. It
is worth reinforcing that there is typically no one “right” answer to the questions posed, and that
cases will never overlap completely with the theories that we cover.

Course incompletes may be granted if the major part of the course is completed; however, no
additional credit can be given for missed class discussions or teamwork beyond the end of the
course. In addition, in the case of an incomplete, the student is responsible for handing in the
final work within the WPI required timeframe of one (1) year. After this time, an incomplete
grade changes to a failing (F) grade.

Covid-19:

Remember:

1. Nobody signed up for this.

• Not for the sickness, not for the social distancing, not for the change to together on
campus
• Not for not for learning from home, not for mastering new technologies, not for varied
access to learning materials

2. The humane option is the best option.

• We are going to prioritize supporting each other as humans

• We are going to respect other’s personal risk and comfort levels

3. We will foster intellectual nourishment, social connection, and personal accommodation.

• Accessible asynchronous content for diverse access, time zones, and contexts
• Synchronous lectures to learn together and combat isolation

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4. We will remain flexible and adjust to the situation.

• Nobody knows where this is going and what we’ll need to adapt
• Everybody needs support and understanding in this unprecedented moment

(adapted from Brandon Bayne)

Each of us shares responsibility for the health and safety of all in the classroom environment by
committing to these elements of the #WPITogether pledge:
• Self-assess daily using the symptom tracker and stay home when not feeling well
• Wear a face mask and maintain 6 feet of physical distancing
• Participate in routine Covid-19 testing at the required frequency, if on campus

Let’s hold each other gently but firmly accountable for our collective health and safety. If you
think you may have difficulty meeting these guidelines, let’s have a conversation.

Whether you choose to meet in-person, online, or in a hybrid format for group project meetings
is up to your team to decide. Please respect and accommodate individual preferences without
pressuring people to do something they’re not comfortable with. For in-person meetings, please
hold each other accountable to the commitments listed above.

What to Do If You Get Sick or If You Are Required to Quarantine.

• Stay in your residence and call WPI Health Services (508-831-5520) to report your
symptoms and get medical advice
• If you feel well enough and comfortable doing so, please notify me. You do not need to
provide a “doctor’s note” or share any details about your condition. If you don’t feel up
to it, that’s ok. Health Services will be notifying instructors about students who are not
able to come to class for an extended period.
• If you feel well enough, you will be able to keep up with the course remotely. You can
view recordings that will be posted on the Canvas site. Announcements will be posted on
Canvas, and we can stay in touch through email.
• If you are not able to keep up with the pace of class, try not to worry. Focus on rest and
getting better. When you are ready to rejoin class, please contact me by email and we will
discuss how best for you to complete the course.

Technology Troubles and Access Challenges.

If you have difficulty accessing class materials or class meetings because of technology or
connectivity challenges, please contact me by email so that we can figure out a solution.

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Guidelines for Class Meetings for Remote Students
Lectures will be pre-recorded for asynchronous viewing. We will have several
synchronous meet-ups in the evenings for discussions and presentations. These meetings
are optional, but highly encouraged. Meeting times will be posted under announcements
in Canvas.

Communication Mechanisms
I may need to make changes as the course progresses to adapt to conditions on campus,
my own health or family matters, or other unforeseen circumstances. I also hope to use
your feedback to improve the course along the way! I will do my best to email out all such
changes so you are aware.

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