1.

It is argued that, conceptually, it is incorrect to refer to 'project risks', and 'risky

projects', unless in the context of a specific project stakeholder. Do you agree? Discuss.

I believe that it's not correct to refer to "project risks" or "risky projects" without
considering the perspective of specific project stakeholders. Different stakeholders have
different perceptions of risks, so understanding their viewpoints is crucial for effective
risk management.
For instance, in a construction project, the project manager may view a risk as a delay in
obtaining construction materials. On the other hand, the contractor may see it as
increased labor costs due to unexpected overtime. The client's concern may be the project
not being completed on time or going over budget.
To manage risks effectively, it's important to involve all stakeholders. This involves
assessing risks, obtaining input from stakeholders, and implementing measures to
mitigate those risks. By considering the perspectives of all stakeholders, we can develop
strategies that address their concerns and enhance the project's chances of success.
In conclusion, considering the specific perspectives of stakeholders is necessary when
discussing "project risks" and "risky projects". Each stakeholder may have a different
perception of risks, and involving them in the risk management process is crucial. This
approach helps identify all relevant risks and implement appropriate actions to minimize
them.
2. Risk matrix is among the tools that support systematic analysis of risk. Identify and
briefly describe the procedures or steps suggested for preparation of risk matrix.
A risk matrix is a tool used to evaluate and prioritize risks based on their likelihood and
impact. The following steps are suggested for the preparation of a risk matrix

Identify the risks: The first step in preparing a risk matrix is to identify all the potential
risks that may occur in a given scenario. This can be done through brainstorming sessions
with stakeholders, reviewing historical data, analyzing industry trends, and seeking
expert opinions. The goal is to create a comprehensive list of all possible risks that could
impact the project or organization.
Define the risk criteria: Once the risks have been identified, the next step is to define the
criteria for evaluating and prioritizing them. This includes determining the likelihood and
impact of each risk. Likelihood refers to the probability that a risk will occur, while
impact refers to the potential consequences of the risk. The criteria should be specific and
measurable to ensure consistency in the evaluation process.

Assess the risks: After defining the criteria, assess the likelihood and impact of each risk.
This can be done by assigning a score to each risk based on the defined criteria. For
example, likelihood may be scored on a scale of 1-5, with 1 being very unlikely and 5
being very likely. Impact may be scored on a scale of 1-10, with 1 being low impact and
10 being high impact. The scores assigned should be based on objective data and expert
judgment.

Create the matrix: Using the scores obtained, create a matrix with the likelihood and
impact on the x and y-axes respectively. The matrix should have a range of scores that
correspond to the different levels of likelihood and impact. For example, the x-axis may
range from 1-5 for likelihood, while the y-axis may range from 1-10 for impact. The
matrix should be divided into four quadrants, each representing a different level of risk.

Prioritize the risks: Finally, prioritize the risks based on their position in the matrix. Risks
that fall in the high likelihood and high impact quadrant should be given the highest
priority, as they pose the greatest risk to the project or organization. Risks in the low
likelihood and low impact quadrant can be monitored but may not require immediate
action. Risks in the other two quadrants should be assessed on a case-by-case basis to
determine the appropriate response.

By following these steps, a risk matrix can be prepared to support the systematic analysis
of risk. It provides a visual representation of the risks faced by the organization and helps
prioritize actions to mitigate them. Regular review and updating of the risk matrix can
help ensure that it remains relevant and effective in managing risk.
In summary, the risk matrix helps project teams analyze and prioritize risks. By
following the steps outlined, project managers can create a clear visual representation of
the risks, enabling them to manage risks effectively and make informed decisions. The
risk matrix allows for resource allocation and the implementation of tailored risk
management strategies.
3. Some argue that risk is uncertainty that matters. This way of understanding gave rise
to the new paradigm in risk management that opportunity risk management too worth
equal attention in project.
a) How do you understand opportunity risk? Discuss it in the framework of the “dual
view” of risk.
b) What are the possible ways or approaches to opportunity risk management?
Outline and describe each.

a) Opportunity Risk within the Dual View of Risk:

Opportunity risk refers to the potential positive outcomes or opportunities that may
arise during a project. In the framework of the "dual view" of risk, it is recognized that
risk encompasses both threats and opportunities. This perspective considers risk as
uncertainty that matters, acknowledging that uncertainties can lead to both negative and
positive consequences.

Traditionally, risk management focused primarily on mitigating threats or negative risks.

However, the new paradigm in risk management emphasizes the need to also identify and
capitalize on opportunities that may enhance project success. By acknowledging
opportunity risk, project managers can proactively identify, assess, and exploit positive
uncertainties that can lead to beneficial outcomes.

For example, consider a software development project. An opportunity risk could be the
potential to deliver the project ahead of schedule due to efficient teamwork or the
availability of advanced technology. By recognizing and managing this opportunity risk,
project managers can allocate resources and implement strategies to capitalize on the
early delivery, resulting in customer satisfaction, improved reputation, or even cost
savings.

b) Possible Approaches to Opportunity Risk Management:

Identification and Assessment: The first step in opportunity risk management is to

identify and assess potential positive risks. This involves systematically identifying
opportunities that can arise throughout the project lifecycle and evaluating their
likelihood, impact, and alignment with project objectives. Techniques like brainstorming,
SWOT analysis, and scenario planning can aid in identifying and assessing opportunity
risks.

Prioritization and Selection: Once identified, opportunity risks need to be prioritized

and selected based on their potential impact and alignment with project goals. Project
managers can use qualitative and quantitative techniques, such as scoring models or
decision matrices, to rank and select the most promising opportunity risks for further
attention.

Exploitation and Maximization: After selecting the opportunity risks, project managers
need to develop strategies and action plans to exploit and maximize the positive
outcomes. This may involve allocating resources, adjusting project schedules, leveraging
expertise, or forming strategic partnerships. The goal is to actively pursue and capitalize
on the identified opportunities.

Monitoring and Review: Opportunity risk management should include continuous

monitoring and review. Regularly tracking the progress of identified opportunities,
assessing their realization, and making adjustments as needed ensures that the benefits
are realized and potential risks are mitigated.

By following these approaches to opportunity risk management, project managers can

foster a proactive and forward-thinking approach to risk management. They can harness
positive uncertainties, enhance project outcomes, and increase the chances of project
success.

In conclusion, the understanding of opportunity risk within the dual view of risk
recognizes that uncertainties can lead to positive outcomes as well. By adopting a
proactive approach to opportunity risk management, project managers can identify,
assess, prioritize, exploit, and monitor potential positive risks throughout the project
lifecycle, ultimately enhancing project success.