INTERNATIONAL JOURNAL OF

PROJECT
MANAGEMENT
International Journal of Project Management 24 (2006) 303–313
www.elsevier.com/locate/ijproman

Key points of contention in framing assumptions for risk

and uncertainty management
Chris Chapman *

University of Southampton, School of Management, Southampton SO17 1BJ, United Kingdom

Received 25 November 2005; received in revised form 17 January 2006; accepted 26 January 2006

Abstract

This paper explores the relationship between ‘common practice’ as defined by a simple reading of PMBOK Chapter 11 and ‘best prac-
tice’ as approached (but not quite achieved) by two alternative guides (PRAM and RAMP) in terms of key points of contention in fram-
ing assumptions which everyone interested in project management as a whole ought to understand. An immediate purpose is helping
readers to avoid some of the current confusion about the difference between ‘common practice’ and ‘best practice’. A longer term goal
is influencing the shape of future project risk management guides, to enhance them individually, and to make them easier to use collec-
tively. ‘Best practice’ definition is itself contentious. Other authors are encouraged to debate the definition of ‘best practice’ and explore
the position of other guides. The framing assumptions are considered in terms of basic concepts: ‘probability’, ‘uncertainty’, ‘risk’, ‘opti-
misation’ and ‘opportunity’. A practical example of the implications is provided via analysis of the use of probability–impact (PI) matri-
ces and associated PI indices (risk indices or scores). The use of PI indices is ‘common practice’, but it is a clear indication that ‘best
practice’ is not being followed, for reasons clarified in this paper. A follow-on companion paper considers related generic process def-
inition issues.
 2006 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Project risk management; Uncertainty management; Guides; Probability–impact matrices and indices or scores; Risk indices or risk scores

1. Introduction involves. This paper attempts to stimulate debate involving

The need for effective and efficient management of risk
and uncertainty in projects is not contentious. How best
to satisfy this need is highly contentious amongst those
involved in contributing to the project risk management lit-
erature, especially amongst those involved in producing
guides under the auspices of professional bodies and gov-
ernment agencies. However, direct debate about points of
contention has been limited, and for the most part it has
been confined to discussions within groups producing
guides.
Consequences of this lack of public debate include a sig-
nificant gap between ‘best practice’ and ‘common practice’,
and considerable confusion about what ‘best practice’
*
Tel.: +44 23 80592525; fax: +44 23 80593844.
E-mail address: cbc@soton.ac.uk.
the project management community as a whole about the
differences between ‘best practice’ and ‘common practice’
framing assumptions. To clarify the implications in imme-
diate practical terms an example is employed – the use of PI
(probability–impact) matrices and associated PI indices
(risk indices or scores), a ‘common practice’ tool.
PI indices are a clear symptom of ‘common practice’
which is not ‘best practice’, a statement some readers
may see as contentious. They are used in this paper to illus-
trate the practical implications of framing assumptions
while avoiding the details of generic processes which
require a separate paper. PI indices are central to the risk
management chapter in the third edition of the Project
Management Body of Knowledge (PMBOK) guide [1,
chapter 11], produced by the Project Management Institute
(PMI), referred to as PMBOK 2004 in this paper. They
are accommodated and provide a significant source of

0263-7863/$30.00  2006 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2006.01.006
304 C. Chapman / International Journal of Project Management 24 (2006) 303–313
confusion in the second edition of the Project Risk Analy-
sis and Management (PRAM) Guide [2], produced by the
Association for Project Management (APM), referred to
as PRAM 2004 in this paper. They are also accommodated
and provide a minor source of confusion in the second edi-
tion of the Risk Analysis and Management for Projects
(RAMP) guide [3], produced by the Institution of Civil
Engineers and the Actuarial Profession, referred to as
RAMP 2005 in this paper. In all three cases the date is
dropped when the meaning is clear.
This paper restricts itself to three guides, which requires
explanation. PMBOK 2004 was included because it closely
reflects ‘common practice’ as understood by the author.
Guidelines produced by professional bodies necessarily seek
consensus. This can lead to a ‘lowest common denominator’
syndrome. All guides are practice led to some extent,
although their intentions are to lead practice. PMBOK
2004 reflects common practice more strongly than PRAM
2004 or RAMP 2005. This may be attributable to stronger
pressure within the group which produced it to accommo-
date common practice. However, the author believes that
PMI global reach and the straightforward nature of the
PMBOK guide are important reasons why a simple reading
of PMBOK defines common practice. PRAM 2004 and
RAMP 2005 were included because they are effective alter-
natives which approach ‘best practice’, the remaining gap is
of interest, and the author was directly involved in discuss-
ing key points of contention during their drafting. The
issues raised are relevant to other guides and the literature
more generally. Other guides were beyond the scope of a
single paper, but other authors are encouraged to contrib-
ute to the debate by extending the discussion to other guides
and other approaches in the broader literature. The
author’s view of ‘best practice’ is clearly a legitimate target
as part of this debate. Some readers may wish to debate
‘common practice’, but this would be less productive.
The author was responsible for drafting the process
chapter in PRAM 1997 [4], and a co-author of the substan-
tially revised process chapter in PRAM 2004, as well as
making more general contributions to both editions, like
all members of both working parties. This paper was stim-
ulated in part by the extensive discussions of unresolved
differences in opinion which took place during the second
working party’s deliberations. The management of the
working parties on both occasions was very effective, and
all contributors were collaborative and constructive in their
responses to differences in opinion. Contributors provided
expertise based on experience across a wide range of indus-
try, from consultant, contractor and client perspectives.
PRAM 2004 takes a bold step forward relative to PRAM
1997 and PMBOK 2004, while accommodating sustained
and unresolved arguments about what is ‘best practice’ as
distinct from ‘common practice’, and what should be rec-
ommended, tolerated, or excluded. Accommodating deeply
held conflicting views to the extent achieved by the PRAM
2004 working party was collaboration in the best possible
spirit. In my view this was not a mistake. It was an impor-
tant step in a process to reach agreement which will cer-
tainly take time and may never produce complete
convergence. The views on key points of contention
expressed in this paper were not shared by all members
of the PRAM 2004 working party, but the process of pro-
ducing a consensus was very illuminating, and all members
of the working party deserve credit for the illumination this
paper tries to pass on. This paper is concerned with
explaining what is involved in the areas where consensus
was difficult because a working understanding of all cur-
rent guides and the literature more generally requires clar-
ity on these points of contention, as does enhancing all
future guides and common practice.
The author contributed to the development of the pro-
cess structure in the 1998 first edition of RAMP 2005,
which has not changed, to the editorial processes of both
editions, and to the general discussions of the working
party. Points of contention were not a significant concern,
so this paper does not draw on RAMP to the same extent,
but the RAMP discussion complements and extends the
PRAM discussion in a useful manner. The RAMP working
party brought together a comparable range of interests and
skills, but it was different, diversity in professional back-
grounds being one key difference (actuaries, economists
and engineers), more senior management and board level
experience being another. Management of the RAMP
working party was comparable to the PRAM working par-
ties in terms of its high quality, but different, more direct
control by the chair/chief editor and the originator of the
process definition leading to greater internal consistency
being the key differences. The less contentious nature of
the discussions meant that collaboration was not tested
to the same degree, but it was comparable in quality.
The author has not contributed to PMBOK guides, but
part of the stimulation for this paper and a related earlier
paper [5] was provided by an invitation to give the earlier
paper at a PMI Risk SIG conference in California, and
part of the purpose of this paper is a basis for ongoing dia-
logue with PMI Risk SIG members.
Several PMBOK contributing authors provided very
useful feedback on an earlier draft of this paper, and feed-
back from contributing authors of all three guides shaped
the final draft of this paper significantly.
Key points of contention are addressed in this paper in
terms of framing assumptions. This is not the basis on
which most discussions about them took place. Such dis-
cussions usually focused on process implications. Hind-
sight suggests direct discussion of framing assumptions
might have been a more productive starting place.
In each case the ‘span’ of the framing assumption is
defined on a 5 point scale, from 0 to 4. ‘Span’ reflects gen-
erality, range or scope. Point ‘0’ signifies zero span, point
‘1’ signifies a minimal level of consideration, and point ‘4’
signifies a ‘best practice’ level of consideration, as ‘best
practice’ is currently understood by the author. Intermedi-
ate points were chosen to facilitate discussion. A 5 point
scale provides a good framework for discussion at a useful
 C. Chapman / International Journal of Project Management 24 (2006) 303–313
level of detail. The definitions of points are unambiguous,
and higher values are unambiguously preferable, but all
three guides involve ambiguity in the extent to which they
meet these points. Illuminating and eliminating this ambi-
guity is part of the purpose of this paper, not a limitation
in the analysis provided. Higher points require a more gen-
eral framework for understanding issues, each successive
level adding to lower levels. The points do not define a
‘maturity’ scale – level 4 is directly accessible if the princi-
ples involved are accepted. However, some readers will find
some of the higher points contentious, and when this is the
case references provided will have to be pursued to fully test
the views held. ‘Maturity’ scales [6,7] should reflect appro-
priate framing assumptions, an issue worth exploration.
The framing assumptions are each allocated a section in
the body of this paper. These sections are ordered to help
clarify dependencies, which are extensive and important.
The space allocated to each reflects the relative importance
of clarity, linked to the extent of the contention involved,
feedback from the contributing authors of all three guides
providing crucial guidance in this area. To illustrate some
of the practical implications, PI indices are used as an illus-
trative example.
A companion paper [8] considers further implications
for generic process definition, and addresses how this defi-
nition is affected by process drivers, like the stage in the
project life cycle of current interest. It addresses important
‘best practice’ and ‘common practice’ comparisons and
associated differences between guides which follow on from
those considered in this paper.
2. The span of the ‘probability’ concept employed
(0) probabilities are not employed explicitly,
(1) probabilities have to be objective,
(2) subjective probabilities are sometimes acceptable
‘guestimates’,
(3) subjective probabilities are the only practical choice
available,
(4) subjective probability based adjustment for the impli-
cations of all assumptions and conditions may be
essential.
Part of the initial purpose of the PRAM guide project
was the provision of simple standard process descriptions
and terminology, to avoid the confusion generated by dif-
ferent descriptions of common concepts. However, even
within the bounds of very collaborative working groups,
this goal has proven elusive. The most fundamental point
of contention for both PRAM working parties seemed to
be the definition of ‘risk’ and ‘uncertainty’ to be adopted.
However, underlying this debate was a framing assumption
not discussed explicitly – the span of the probability con-
cept employed.
Assuming any probabilities employed must be ‘objec-
tive’ is a position taken by many engineers and ‘hard scien-
tists’. They usually have an education which included
305
axiomatic objective probabilities and frequency based
objective probabilities, but no formal treatment of ‘subjec-
tive’ probabilities. Consider the implications of this posi-
tion in terms of a very simple example – you are offered
a bet on the outcome of a coin toss. This position means
you can assume the coin is ‘unbiased’, and the toss is ‘fair’,
with an axiomatic 0.5 probability of a head or tail. Or you
can assume the best estimate of the probability of a head is
f/n, where f heads have been observed in n ‘fair’ trials. Or
you can use Bayes theorem to combine an axiomatic prior
and a frequency based posterior estimate. This ‘probability
span = 1’ position might be characterised as a ‘classical’
position on probability. It is suitable for some hard sci-
ences, but it provides very limited managerial decision tak-
ing capability, and in practice this limited capability
frequently forces a ‘probability span = 0’ position.
Fig. 1 illustrates a basic PI matrix, which has its roots in a
classical position on probability. Early use of this portrayal,
without a calibrated probability scale, can be associated with
picturing the probability and impact of hazards by engineers
concerned with safety analysis half a century ago. Their clas-
sical view of probability meant they could not assign risks to
boxes and define the p1 or p2 values, but they could define
impact scale values, and an associated PI index, to provide
a crude measure of the relative importance of hazards, to
guide their search for hazard reduction. The PI index values
r1 to r5 indicated in Fig. 1 could be given increasing values,
like 1–5, or decreasing values.
This classical position on probability can be linked to a
classical position on ‘decision analysis’, adopted by most
textbooks discussing decision analysis before the mid
1960s, some since. ‘Decisions under risk’ involved objec-
tively determined probabilities. ‘Decisions under uncer-
tainty’ involved no available probabilities. Different
decision strategies were recommended for these two differ-
ent circumstances. Chapter 23 of [9] illustrates this classical
approach to decision analysis and probabilities, and con-
trasts it with the ‘modern’ approach considered below.
A ‘probability span = 2’ position can be associated with
a ‘midway’ position on probabilities and decision analysis –
subjective probabilities are sometimes acceptable ‘guesti-
mates’ which can be used when objective probabilities are
p3 = 1
high r3 r4 r5
p2
probability
medium r2 r3 r4
p1
low r1 r2 r3
p0 = 0
i0 = 0 i1 i2 i3
low medium high
impact
Fig. 1. A basic PI matrix showing PI index values.
306 C. Chapman / International Journal of Project Management 24 (2006) 303–313
not available, but they do not embrace objective probabil-
ities – they are an alternative to objective probabilities, and
they are inherently less reliable. Those who hold this view
have usually been exposed to subjective probabilities in
terms of basic decision analysis courses, but they may not
have had formal exposure to generalised views of subjective
probabilities. Developing the earlier example from this
position, if a bet on a coin toss is mandatory, and the coin
is clearly bent, a subjective prior might involve a guesti-
mate of the departure from 0.5 because of the bend, but
such a guestimate is not really a proper probability.
PMBOK 2004 seems to be associated with this position.
The key indicator is the central role of PI indices, a tool
which is not compatible with a ‘probability span = 3’ posi-
tion, for reasons explained below. PI matrices like Fig. 1
used in the PMBOK ‘‘Qualitative Analysis’’ process can
specify all probability scale values, to avoid ambiguity in
terms of the probability scale, but assigning a ‘risk’ to a
box is a guestimate. Non-linear scales may be used for
one or both axes, with a ‘score’ equivalent to Fig. 1 index
defined by the product of logarithmic scale values, for
example. This obscures the one dimensional nature of the
risk measure, as discussed below, but it does not address
the fundamental problems considered below. ‘‘Quantitative
Analysis’’ using probabilities may follow, but PMBOK
explicitly suggests such analysis is often unnecessary, and
in terms of associated practice it is often omitted or limited
in terms of the span of risk and uncertainty addressed
because of its PI index basis. This position involves an
alignment of PMBOK and ‘common practice’.
A ‘probability span = 3’ position can be associated with
a ‘modern’ position on probability and decision analysis –
subjective probabilities are the only practical choice avail-
able, and they should be fully understood and exploited.
Further developing the earlier examples from this position,
if a bet now on the outcome of ten successive tosses of a
coin is mandatory, and the coin is clearly bent, it would
be naı̈ve to simply assume an unbiased coin or fair tosses
on any trials available, and even if these assumptions are
made, the subjective nature of such judgements renders
the estimate subjective. The only sensible approach to mak-
ing appropriate decisions would include a subjective esti-
mate of the expected probability based on an adjustment
from 0.5, plus a subjective estimate of the associated likely
error, which will not cancel out on successive throws. Sub-
jective probabilities are not a second best alternative, they
are the only practical choice available, so they must be
understood, embraced, and used effectively. Subjective
probabilities can be grounded on data and classical objec-
tive probabilities, and doing so means they are an exten-
sion, not an alternative. Indeed, it is essential to embrace
objective probabilities as special cases to reflect the implica-
tions of the assumptions used to derive the objective prob-
abilities, which may or may not suggest adjustments to any
associated parameter estimates. Subjective probabilities
interpreted in this inclusive manner have a wider span than
objective probabilities. This wider span includes judgement
about the relevance of the data and the robustness of any
assumptions, integrating the views of all relevant parties
to achieve an internally consistent and coherent view to
the extent this is worth while. Using subjective probabilities
is driven by the desire to make decisions which are consis-
tent with the best use of all expertise available, as well as
the best use of all data available, because on average this
ought to be better than using probabilities which are not
consistent in this sense. Subjective probabilities may be
given an axiomatic basis which renders them respectable
[10]. They can also be treated as models of different orders,
allowing for probability distributions of probability values
when this is deemed useful [11], not the case in terms of
modern decision analysis, but very much the case in terms
of a ‘minimalist’ approach to PI matrices [12–14].
A real case study example may help to clarify this posi-
tion. In 1976 the author designed a risk management pro-
cess for BP International for offshore North Sea projects.
It was tried out for the first time on the Magnus project,
which subsequently came in on-time and on-cost, despite
some significant surprises. One source of risk when laying
pipe was ‘wet buckles’ – the pipe fractures and fills with
water, becoming too heavy for the barge to hold, leading
to major difficulties. The engineers involved in the plan-
ning had data on past North Sea buckles, and the number
which had occurred divided by the kilometres laid pro-
vided an objective estimate of the probability of a buckle
per kilometre to be laid. However, in their view a better
estimate of this probability was 50% of the data based
objective estimate, because of improvements in the equip-
ment in use and learning by the pipe laying contractors,
with a confidence band which was not formally defined
but of the order ±20%. The 50% adjustment was used.
This was clearly a subjective estimate, but it was much
better than the data based estimate. It was tempting to
use econometric methods to model the trend in the data
objectively, and estimate a confidence band objectively,
because the author had recently completed a PhD in
mathematical economics and econometrics. Econometrics
is a branch of statistics using a classical perspective but
distinguished by a concern for testing the validity of clas-
sical statistical assumptions, and dealing with failures in
these assumptions, via statistical techniques or reformula-
tion of the economics aspects of the modelling assump-
tions. However, this would have involved subjectively
assessed assumptions, which in the author’s view would
not have been as robust as letting experienced engineers
reflect on the joint effect of complex interdependent issues
they had a reasonable understanding off. The author’s
first degree was engineering, and ‘engineering judgement’
is a highly valued notion, provided conscious and uncon-
scious bias is appropriately managed. Objectivity in a
strict sense was not an option. The most effective subjec-
tive estimate was the only choice available. The most data
rich management decision context imaginable does not
change this reality, and assuming otherwise involves a
misunderstanding of proper science.
 C. Chapman / International Journal of Project Management 24 (2006) 303–313
A modern view of probability makes PI indices redun-
dant and PI matrices in Fig. 1 format unhelpful. Allocating
a risk to any square in Fig. 1 requires interpretation in sub-
jective probability terms. Fig. 2 shows two example subjec-
tive probability assumptions which could be associated
with the central box of Fig. 1. Working assumptions for
a simple model might involve a uniform probability distri-
bution between i1 and i2, with another uniform probability
distribution between p1 and p2, mid-point expected values
in both cases. This might be associated with a presumed
reality as shown, avoiding the effort of trying to work with
the more complex reality. The same simple model could be
used for all boxes, although the associated presumed reality
would need adjustments to cope with bounds associated
with axes. One key advantage of this simple subjective
probability model interpretation relative to a conventional
PMBOK interpretation is facilitating the use of standard
probability combination procedures to aggregate across
sources of risk without being forced to use a one dimen-
sional PI index. Another key advantage is we no longer
need to force the use of a pre-specified box. We can accom-
modate whatever box shape suits each source of uncer-
tainty, using Fig. 3, and interpreting each box in Fig. 3
via Fig. 2. If we prefer non-linear scales for our axes, they
can be used. A further key advantage is we do not actually
need graphs with pre-specified common scales. We can use
the framework provided by Fig. 3, but just ask for ‘plausi-
ble minimum’ and ‘plausible maximum’ estimates corre-
probability
presumed reality, although multiple modes may be involved
working assumptions for the model
expected value
impact or probability
Fig. 2. Two example subjective probability distribution assumptions
associated with both dimensions of the central Fig. 1 box.
issue number 2 – very uncertain probability, predictable impact
1.0
issue number 1 – uncertain probability and impact
probability
issue number 3 – reliable probability estimate,
but very uncertain impact
0
0 the expected value of a parameter like cost or duration with
impact
Fig. 3. A ‘minimalist’ view of PI matrices.
307
sponding approximately to 10 and 90 percentile values
for the required uniform distributions, following best prac-
tice by avoiding the use of absolute maximum or minimum
values when soliciting estimates [15]. As Fig. 3 implies, this
minimalist approach avoids wasting information, captur-
ing much more precise information based on the expertise
of the estimator, as well as avoiding forcing guestimates
into boxes they may not fit. As Figs. 2 and 3 indicate, this
minimalist approach needs no pretence of unwarranted
precision. If realising the source of risk is certain, only
the effect being uncertain, a PI approach becomes particu-
larly awkward, but the generalised minimalist approach
copes without difficulty. This means we are not restricted
to a narrow event based view of sources of uncertainty
and risk, as considered later, possibly the most important
reason PI matrices are not part of ‘best practice’.
Significant portions of PRAM 2004 can be associated
with a modern approach to probabilities, including a min-
imalist approach, but portions supporting the use of PI
matrices are clearly in a midway position, and other por-
tions do their best to accommodate both. A clear and con-
sistent modern view of probabilities renders basic PI
indices redundant and the constrained nature of PI matri-
ces unhelpful, although variants of Fig. 3 and alternative
views of this information can be useful. The extent to which
a midway position is accommodated in PRAM 2004 is con-
fusing in the author’s view. It is understandable in the con-
text of the range of views on both working parties and the
early decision to limit scope changes for PRAM 2004. Fur-
ther, it is understandable in the context of a wish to avoid
inflexible or unduly prescriptive guidance – in general there
is more than one way to do most risk management tasks,
and PRAM tries to explain the range available. However,
it is confusing, and this matters in terms of helping inexpe-
rienced users. RAMP 2005 also endorses a modern posi-
tion on subjective probabilities, including a minimalist
approach, and it also accommodates a midway position
and PI indices with ‘health warnings’. However, less atten-
tion to PI indices reduces the confusion. Both these guides
muddy the water in terms of their achievement of a ‘prob-
ability span = 3’ position by their different degrees of
accommodation of a PI index approach. Assessing a frac-
tional rating for either serves no useful purpose, but under-
standing the point of contention involved and the position
of all three guides is useful.
A ‘probability span = 4’ position can be associated with
a ‘generalised modern’ position on probability and decision
analysis – subjective probability based adjustments for the
implications of all assumptions and conditions may be
essential, and may need careful development and articulate
explanation, a position consistent with [11], but beyond the
conventional modern view of subjective probabilities. In
brief, the most sophisticated and effective assessment of
risk and uncertainty available will allow us to estimate
a clear understanding of what sources of uncertainty have
been included, what sources of uncertainty are treated as
308 C. Chapman / International Journal of Project Management 24 (2006) 303–313
conditions or assumptions, and the nature of the bias asso-
ciated with all other assumptions. The author has in mind
the kind of process used for the Magnus project mentioned
earlier [13,14], the context which first raised the issue for
the author. If we want to treat this estimate as uncondi-
tional and unbiased, we need to consider the possible need
for three adjustments, applying three factors. The first is
for ‘known unknowns’, all sources of uncertainty which
were identified but treated as conditions or assumptions.
For example, ‘no project scope changes’ may have been
assumed, but some scope changes may be known to be
inevitable. The second is for ‘unknown unknowns’, all sim-
ilar sources of uncertainty which were not identified. Some
are usually inevitable. The third is for any other sources of
bias, like optimistic assumptions of independence when
combining probability distributions, or pessimistic assump-
tions of perfect positive correlation when combining prob-
ability distributions. Perfect or partial positive correlation
assumptions can be used deliberately to offset bias associ-
ated with known and unknown unknowns, a significant
improvement relative to compounding these two sources
of bias by assuming independence, and a useful practical
approach. The net effect of all three can be referred to as
a ‘cube factor’, a simplification of the abbreviation kuuub,
for known unknowns, unknown unknowns and bias,
related to a three dimensional cube shape portrayal. Usu-
ally the role of a cube factor is insight, not numerical pre-
cision, but sophisticated risk management processes could
be applied in some circumstances. For a brief elaboration
of this cube factor notion see [16]. For a more detailed
treatment see [13,14]. For a discussion of Donald Rums-
feld’s famous ‘‘unk-unks’’ quote, traced to the first edition
of [14] or secondary citations, see [17].
One simple variant of the cube factor notion is ‘an
engineering factor of safety’, traditionally used in a wide
range of areas. Another variant, considered in [16], is the
‘optimistic bias’ adjustment factor proposed by HM
Treasury [18], subsequently adopted by the Department
for Transport [19]. Treasury optimistic bias adjustment
factors are simple ‘objective’ probability estimates of
the average adjustment needed based on classical statisti-
cal analysis of estimates and outturns by industry sector.
Their estimation does not reflect the extent or quality of
the risk and uncertainty management processes in place
for the projects used as data, and guidance on how to
adjust the factors to reflect the quality of the risk man-
agement process for each project they are applied to is
not provided, fundamental defects from an econometric
perspective which can lead to a range of problems.
RAMP 2005 considers this Treasury approach in terms
of some obvious defects. RAMP also stresses the impor-
tance of an ‘assumptions list’, the ‘known unknowns’.
Further, an extensive discussion related to Figure 13 of
RAMP links the ‘known unknowns’ and ‘unknown
unknown’ concepts. However, a definitive ‘probability
span = 4’ position is rejected. RAMP takes the position
a cube factor concept is undesirable, and it is better to
let decision takers consider these issues in other ways,
making the notion of 4 in this context an explicit point
of contention. This can be compared to the established
econometric position, which limits itself to classical statis-
tical tools, leaving economists to make final subjective
adjustments. However, decision takers have to use a cube
factor implicitly if not explicitly, and the author prefers
explicit advice from those who should understand the
limitations of an analysis, leaving decision takers to make
further adjustment judgements they deem appropriate.
PRAM 2004 addresses the importance of assumptions,
but it does not consider ‘optimistic bias’ adjustment fac-
tors or a ‘cube factor’ generalisation. Due to an agree-
ment to limit the scope of changes plus other issues
deemed more important there was no discussion of this
issue. With hindsight these issues should have been
considered.
In the author’s view PMBOK needs to get beyond its
midway position on subjective probability, as indicated
by the central role of PI indices, and RAMP and PRAM
need to avoid their tolerance of PI indices. This is not
because PI matrices cannot be useful. It is because there
are better ways to achieve the same ends, and PI matrices
constrain the vision of what risk management is about in
important ways considered below. Further, all three guides
need to explicitly address the cube factor issue in a coherent
and holistic manner, which requires a generalised modern
view of subjective probability. Until they do so, users of
these guides and other similar guides need to understand
the differences between them in terms of their position on
probability. An exact numerical rating of the position of
any of the guides considered in this paper is a matter of
opinion which is not worth debate. A summary table of
framing assumption point scores for the three guides con-
sidered has been suggested. It is not provided to avoid
encouraging such debate. However, the nature and the
extent of the gap between common and best practice and
the role of guides in defining these positions is a very
important area of debate.
3. The span of the ‘uncertainty’ and ‘risk’ concepts employed
(0) uncertainty is ignored,
(1) uncertainty about identified events and conditions is
considered,
(2) uncertainty about accumulated variability is also
considered,
(3) uncertainty about ambiguity is also considered,
(4) uncertainty about implicit and framing assumptions
is also considered.
(0) risk is not an explicit operational concept,
(1) risk is defined in one dimensional terms, usually
equivalent to an expected outcome,
(2) risk is defined in two dimensions with a cumulative
view of quantified variability,
 C. Chapman / International Journal of Project Management 24 (2006) 303–313
(3) risk also includes the implications of ambiguity which
is not quantified,
(4) risk also includes the implications of framing and
working assumptions.
It is useful to distinguish framing assumptions con-
cerned with the meaning of ‘uncertainty’ and ‘risk’ as indi-
cated above, but discuss them jointly.
In the author’s view, an ‘uncertainty span = 4’ position
requires a definition along the lines ‘uncertainty is lack of
certainty in the simple common language sense’, and a ‘risk
span = 4’ position requires a definition along the lines ‘risk
is the possibility of departures from expectations which
matter’. Explaining why, and how this relates to the three
guides and common practice, is the concern of this section.
The classical position on probability implies a distinc-
tion between ‘uncertainty’ and ‘risk’ couched in terms of
the availability of probabilities (or not). Knight [20] is tra-
ditionally blamed for this distinction, but a recent paper
[21] suggests he was innocent of this charge. A classical
position on decision analysis is possibly the real culprit.
A modern position on probability renders this distinction
irrelevant because whether or not we associate probabilities
with uncertainty is simply a question of whether or not this
is a useful thing to do. Some economists who adopt a mod-
ern view on probability use ‘risk’ and ‘uncertainty’ inter-
changeably. The position taken above allows us to focus
on uncertainty management first, to define expectations,
then move on to risk, to consider departures from expecta-
tions if and when they matter. This facilitates a generalisa-
tion of a two parameter mean–variance view of risk
discussed below while ‘keeping it simple’, in practice and
in terms of underlying principles.
Deliberately ignoring aspects of uncertainty is endemic
to common practice, possibly because most people are
not comfortable with concepts or tools for addressing
uncertainty, and they are not prepared to address anything
they can avoid when they do not have the concepts or tools
to cope. Ward [22] developed a useful outline of a range of
interpretations of ‘ambiguity’ which clarifies the point 3
and 4 positions on uncertainty assumed above, and empha-
sises why the aspects of uncertainty which tend to get
ignored if a PI index focus is adopted are often the most
important.
The PMBOK 2004 definition of ‘risk’ (project risk is an
uncertain event or condition that, if it occurs, has a positive
or a negative effect on at least one project objective, such as
time, cost, span, or quality) implies an ‘uncertainty
span = 1’ position, although uncertainty is not explicitly
defined or discussed separately. This position seems to be
predicated on a classical or midway position on probabili-
ties and decision making, and a commitment to the use of
PI indices together with an analysis of assumptions. It is
consistent with ‘common practice’. However, ‘‘Quantita-
tive Analysis’’ in PMBOK 2004 terms requires an ‘uncer-
tainty span = 2’ position, contradicting the espoused
definition of risk. Further, because common practice fol-
309
lowing PMBOK ‘‘Quantitative Analysis’’ is usually limited
to a ‘top ten’ or ‘top fifty’ set of risks identified in the
‘‘Qualitative Analysis’’ without considering the cumulative
effect of those outside the top set or knock on effects more
generally, it weakens its ‘uncertainty span = 1’ position. On
the other hand, the first paragraph on page 240 has an
‘uncertainty span = 4 tone, as an example of more general
perspectives involved.
In the author’s view, PMBOK 2004 is predominantly in
an ‘uncertainty span = 1’ position, because of the espoused
definition of risk linked to the central role of PI indices.
However, aspects of a 2 and 3 are present, and skilled users
may approach a 4, so a 1–4 classification might be used.
Here, as in terms of some other framing assumptions, the
starting position is simplistic, so later generalisation is con-
fusing and ineffective as a guide for the uninitiated. Both
PRAM 2004 and RAMP 2005 can be associated with a 2–
4 position, depending on how they are interpreted, with a
focus close to a 4. The details are not worth exploring here,
other than noting that the lack of a fully developed cube fac-
tor equivalent precludes a full 4. As in relation to all framing
assumptions, debate on exact ratings for current editions of
these guides would be of limited value, but debate on where
they should be would be useful, and understanding the liter-
ature in the meantime requires attention to what is assumed
about the meaning of ‘uncertainty’.
Early use of PI matrices like Fig. 1 in a hazard context
used a ‘risk = probability · impact’ definition, and this is
still common practice in safety analysis. The PI index value
r3 in all three diagonal boxes as shown, with comparable
common index values for other diagonal sets of boxes,
makes sense in this context. If appropriate probability and
impact scales are used, the expected outcomes associated
with these sets of boxes are approximately the same.
PMBOK 2004 uses a different definition of risk as noted
above – it is broader, accommodating but not requiring a
risk = probability · impact definition. However, making
sense of the PMBOK use of risk indices or scores implies a
similar one dimensional interpretation, a ‘span of risk = 1’
position. As just noted, ‘‘Quantitative Analysis’’ in PMBOK
terms requires a ‘span of uncertainty = 2’ position, but this
contradicts the espoused definition of risk, a simplistic start-
ing position which does not cope with needed complexity.
A ‘span of risk = 2’ position means a one dimension
measure of risk cannot be used. This position might be
associated with a two parameter Markowitz ‘mean–vari-
ance’ approach [23], initially formulated as an approach
to the management of risk in terms of portfolios of securi-
ties, which has become a cornerstone of modern econom-
ics, leading to a Nobel Prize for Economics for
Markowitz. For any given expected outcome, the variance
(a measure of spread) of the associated distribution is a sur-
rogate measure of risk, and it is the way expected values
and related variability combine, bearing in mind the impact
of positive and negative dependence, which is crucial. In
operational terms a useful related alternative is the use of
overlaid cumulative probability distributions to make
310 C. Chapman / International Journal of Project Management 24 (2006) 303–313
expected values indicated by
1.0
cumulative probability
0.5
A B
0
cost
Fig. 4. Overlaid cumulative probability distribution portrayal of choices:
simple linear examples.
choices. Fig. 4 provides a simple example of associated
decision rules. It assumes four potential choices all have
uniform probability distributions of cost outcome in den-
sity form, linear cumulative forms. Choice ‘A’ involves
the same expected outcome as ‘B’. However, the near ver-
tical nature of the ‘B’ curve means it is relatively risk free,
while the flat slope of the ‘A’ curve indicates high variabil-
ity, and high risk relative to ‘B’. ‘B’ is the preferred choice
overall if it is available, because it has less risk and a lower
expected value than all the other choices. If ‘B’ is not avail-
able, then ‘A’ is the best choice. This is because ‘A’ domi-
nates the other two, clearly indicated by the fact its curve is
entirely to the left of the other two. Despite the fact that ‘A’
is more variable than either of the other two, it is less risky
because of its lower expected value. If both ‘A’ and ‘B’ are
not available, ‘C’ is probably the best choice. This is
because its expected value is significantly lower. However,
additional risk is indicated by the overlap area of the
curves, the triangle a–b–c, so a trade-off between risk and
expected value is involved. In this two dimensional frame-
work a one dimensional approach based on expected val-
ues ignores the slopes of the lines – ‘A’ and ‘B’ cannot be
distinguished, as illustrated by the use of r3 for all three
boxes on the diagonal of Fig. 1. See [5,13 or 14] for a devel-
opment of this approach which considers the complications
of curved cumulative distribution shapes.
As noted earlier, a ‘span of risk = 4’ position requires all
uncertainty be considered, in terms of a definition of the
form ‘risk is the possibility of departures from expectations
which matter’. It is important to note here that this requires
considering expectations and possible departures from
them defined in terms of all sources of uncertainty, whether
or not they are usefully measured.
A ‘span of risk = 3’ definition might be associated with
the same definition of risk in the absence of a cube factor
equivalent.
Both PRAM 2004 and RAMP 2005 use variants of this
‘span of risk = 3’ definition of ‘risk’. However, PRAM
2004 refers to risk defined in this way as ‘project risk’, also
using a definition of ‘event risk’ which coincides with the
PMBOK 2004 definition of ‘project risk’ noted above. Fur-
ther, RAMP 2005 refers to risk defined in this way as ‘over-
a c
all risk’, and sometimes uses ‘risk’ without the ‘overall’ in
an event risk sense. This is an important example of the
b
current confusion generated by different guides interpreting
the same term in very different ways, or using different
terms when one is feasible, and a legacy of confusion which
impacts all guides. The PRAM 2004 twin definitions
approach can be seen as part of the cost of accommodating
those members of the working party who wanted to con-
C D
tinue using PI matrices. Alternatively, it can be seen as part
of the heritage of moving from a PRAM 1997 definition of
risk which was effectively identical to the PMBOK 2004
position, bearing in mind this was a major change, and it
was outside the agreed scope of revisions. The RAMP
2005 approach can be seen as simply accepting that ‘risk’
has a range of definitions, and so long as the context makes
clear which is involved, this should not be a problem. In the
author’s view clarity about what risk management is about
has to include clarity about what is meant by the word
‘risk’. A basic definition like that provided above can be
supplemented by clarifications like ‘upside risk’, ‘downside
risk’, ‘event risk’, and so on. There is no need for pedantic
definitions that cannot be altered. But a degree of coher-
ence across guides is important. Until guides achieve this
collectively, those interested in reading about the subject
need to understand the differences in the positions
described above and further differences in other guides
and literature.
4. The span of the ‘optimisation’ concept employed
(0) optimisation in terms of seeking a ‘best’ outcome is
not an explicit issue,
(1) project optimisation in terms of all relevant attributes
is an explicit issue,
(2) project ‘risk efficiency’ is also an explicit issue for all
relevant attributes,
(3) process ‘simplicity efficiency’ is an explicit issue,
(4) corporate ‘learning efficiency’ is an explicit issue.
The second sentence of PMBOK 2004 is ‘‘The objectives
of Project Risk Management are to increase the probability
and impact of positive events, and decrease the probability
and impact of events adverse to the project.’’ The way this
position is developed when discussing ‘‘Qualitative Analy-
sis’’ is clearly consistent with the definition of risk noted
earlier, the use of PI indices, and a ‘span of optimisa-
tion = 0’ position. Aspects of positions 1–4 are an obvious
part of the ‘‘Quantitative Analysis’’ discussion, but they are
not systematically developed, arguably because the starting
position is simplistic. This position is consistent with com-
mon practice. The author is well aware that contributing
authors of PMBOK 2004 have the skills and experience
to go well beyond this, but common practice, often attrib-
uted to PMBOK and consistent with a simple reading of
PMBOK, can be characterised by a failure to make optimi-
sation an explicit issue.
 C. Chapman / International Journal of Project Management 24 (2006) 303–313
All that a ‘span of optimisation = 1’ position requires is
systematic attention to trade-offs between attributes, ask-
ing questions like ‘if we are prepared to increase the
expected cost by 5%, by how much could we decrease the
expected duration, and would it be worth it?’
A ‘span of optimisation = 2’ position extends this to
‘risk efficiency’, minimising the risk associated with the
expected value with an appropriate trade-off between risk
and expected outcome for each relevant attribute. ‘Risk
efficiency’ in a variance efficiency form is central to a
Markowitz mean–variance approach. Fig. 4 demonstrates
a more general form which can cope with any cumulative
distribution shape [5], by implication all higher moments
[13]. PRAM 2004 and RAMP 2005 make ‘risk efficiency’
an explicit issue for key attributes like cost and time, seek-
ing an optimal trade-off between expected outcomes and
risk in the sense associated with Fig. 4, together with an
appropriate trade-off between expected values and risk
for each attribute, which leads on to appropriate trade-offs
between attributes. What is crucial to the current argument
is the need for a definition of risk which involves two
dimensions and a cumulative view of quantified variability.
What is also crucial in practice is at least a minimalist
approach to quantitative analysis to address the question
of risk efficiency, and the notion that doing so pays for
itself directly, by improving expected performance and
reducing risk simultaneously [5,13,14]. In practice a first
pass minimalist approach usually suggests areas where
more refined quantitative analysis would also pay, provid-
ing inbuilt sensitivity analysis which helps to achieve ‘sim-
plicity efficiency’.
‘Simplicity efficiency’ [13,14,16] involves an explicit con-
cern for using models and processes which minimise the
complexity of the analysis required for any given level of
insight, and facilitate choosing an appropriate level of com-
plexity and insight for any given context. There is no ‘one
best way’ to approach all situations. There is a wide range
of choices. But an efficient choice is important, a choice
which minimises the required complexity for any given level
of insight. So is choosing an appropriate level of insight and
complexity. The ‘‘Focus Risk Management Process’’ sub-
phase of the PRAM 2004 process is designed to provide sim-
plicity efficiency and the discussion of the process as a whole
reflects simplicity efficiency. This concern is less apparent in
RAMP 2005, but it does underlie the process. There is evi-
dence of a concern for simplicity efficiency in PMBOK
2004, but the use of a PI index is a clear indication of process
inefficiency. This inefficiency can be considered at several
levels. At the lowest level, if a one dimensional index equat-
ing the diagonal boxes in Fig. 1 is the desired output, it
would make more sense to draw the diagonal lines indicated
in Fig. 5 and estimate the same index directly. This would
provide the same risk index values without wasted effort
or the unhelpful illusion ‘position on the diagonals matters’.
For those used to non-linear scales with a ‘score’ defined by
the product, the linear diagonals become non-linear, but the
issue is the same. At a higher and more important level, the
311
p3 = 1
high r3 r4 r5
p2
probability
medium r2 r3 r4
p1
low r1 r2 r3
p0 = 0
i0 = 0 i1 i2 i3
low medium high
impact
Fig. 5. A simplified version of Fig. 1 with the same PI index values in the
same locations but diagonal boundary lines.
time spent in Fig. 1 derivatives and associated guestimation
could be better spent on a very different style of qualitative
analysis. For example, an effective simple ‘traffic light’ pro-
cess is as follows.
Use simple versions of the ‘Identify’, ‘Structure’ and
‘Ownership’ phases of the PRAM 2004 process as elabo-
rated in [14] to associate each source of uncertainty with
a preliminary view of appropriate responses, each source
of uncertainty and possible responses combination being
referred to as an ‘issue’. Simplify the issues by grouping
them, without losing sight of key dependencies, to the
extent this is possible. Clarify the ownership of ‘issues’, at
board, senior manager, contractor or sub-contractor levels
as appropriate. Then, if an issue has clear and acknowl-
edged ownership plus plausible responses, give it a ‘green
light’. If an issue has clear and acknowledged ownership
but no plausible responses as yet, give it an ‘amber light’.
Otherwise give it a ‘red light’. Focus senior management
attention on the red lights first. When amber lights are
addressed, refine the priority by asking questions like ‘do
we need to identify the issues needing immediate senior
management attention first?’or ‘do we need to identify
the issues needing more analysis first?’ In the latter case
simple quantitative analysis to ‘size’ the issues is useful.
The former case suggests earlier project management fail-
ure with both immediate management implications and
long term corporate learning implications.
It should be clear that if this kind of analysis has not
been done, guestimation in the format of Figs. 1 or 5 is
likely to be relatively ineffectual. Intermediate levels of inef-
ficiency include the waste of information and the problems
associated with a one dimensional measure of risk dis-
cussed earlier, plus related defects discussed on page 145
of PRAM 2004.
Corporate learning is a key issue [24], and ‘learning effi-
ciency’ implies all the lower levels of optimisation need to
be addressed over time in terms of explicitly managing cor-
porate learning. For example, if early applications of a pro-
ject risk management process are treated as investments in
corporate learning as well as assessments of particular pro-
jects, erring on the side of more complex processes provides
insight into what forms of complexity pay and which do
not. Later applications can reflect this tested approach to
312 C. Chapman / International Journal of Project Management 24 (2006) 303–313
simplification, which is not available if simplistic
approaches are used from the outset. This notion is explicit
in PRAM 2004, using this example. In some respects it is
less evident in RAMP 2005, but in others it is more evident,
the role of a whole life cycle perspective being particularly
important. It is generally less evident in PMBOK 2004,
although skilled consultants who use this basis clearly
understand many of the issues.
While ‘optimisation span = 3 and 4’ positions are
explored in some detail in [13,14], their treatment is still
very limited relative to what might be done. This is an area
which deserves a lot more attention in the literature as a
whole. Moving all guides to a clear 4 is a key opportunity.
In the meantime users of all guides need to understand
their limitations.
5. The span of the ‘opportunity’ concept employed
(0) opportunities are ignored,
(1) opportunities are favourable events,
(2) opportunities also include cumulative good luck,
(3) opportunities include more effective responses to both
positive and negative variability,
(4) opportunities include any way of improving
performance.
The PMBOK 2004 definition of risk implies an ‘oppor-
tunity span = 1’ position. The use of PI matrices like Fig. 1
can be expanded to consider opportunities in this sense as
suggested by Hillson [25], incorporated in both PRAM
2004 and PMBOK 2004. As noted earlier, ‘‘Quantitative
Analysis’’ in PMBOK terms requires attention to the
cumulative effect of uncertainty, but the more sophisticated
concerns which ‘‘Quantitative Analysis’’ can address are
undermined by a simplistic focus in the ‘‘Qualitative
Analysis’’.
A cumulative view of good luck, three activities in
sequence accumulating accelerated performance for a vari-
ety of reasons for example, is beyond the span of uncertainty
and risk concepts limited to events and conditions. Risk and
uncertainty concepts have to embrace cumulative variabil-
ity, clearly the PRAM 2004 and RAMP 2005 position.
The notion that responses to uncertainty are central to the
‘opportunity’ concept is an important further generalisation.
For example, to accumulate good luck in three activities in
sequence performed by different sub-contractors, contracts
would have to ensure the following activity sub-contractors
are motivated to respond to early completion by prior activ-
ity sub-contractors, to avoid ‘wasting good luck’ [13].
Further generalisation can include indirect moral boost-
ing notions, like ‘searching for opportunities’ is what risk
management is about, and ‘if risk management is done
well, it should be fun’ [14].
PRAM 2004 and RAMP 2005 are both 4s in these
terms, although the emphasis of the point 3 and 4 issues
needs further development in these guides and the litera-
ture as a whole. PMBOK 2004 touches on point 3 and 4
issues, but the implicit revision in the initial definition of
‘risk’ needed to deal with ‘‘Quantitative Analysis’’ is con-
fusing, and it helps to sustain common practice which does
not fully exploit the opportunity management aspect of
uncertainty management.
6. Conclusion
Most organisations which make extensive use of risk
and uncertainty management processes need to develop
their own processes at some stage, usefully viewed as a syn-
thesis of successive ‘‘Focus Risk Management Process’’
sub-phases if they start with a PRAM 2004 framework as
part of their perspective. Developers of these processes
and people involved in using any particular process should
view them in the context of what is widely understood –
our collective experience or knowledge. This applies to
users who provide input assessments and users who inter-
pret the outputs. Users of processes do not need extensive
process design expertise, but they do need to understand
why using any process at any level in a ‘paint by numbers’
manner is ineffective. Features and insights provided by a
range of guides should be considered as part of this knowl-
edge. Many valuable guides not considered in this paper,
like [26], offer strengths which can be usefully included,
provided any conflicting basic definitions and assumptions
are understood and worked around. One immediate pur-
pose of this paper is clarifying how all readers of this jour-
nal can best approach the literature on project risk
management, guides produced by professional bodies and
government agencies in particular.
Other literature which uses some different definitions
and terms but underlies the position taken here, like [27],
is clearly relevant. So is literature which is supportive of
any relevant perspectives, like [28], and literature which
offers alternative perspectives, like [29]. Books like [25],
which offer useful additional perspectives in some areas
but employ some framing assumptions which contradict
one or more of the positions taken here, are more difficult
to synthesise unless the implications of these framing
assumptions are understood, but they offer important
insights. A basic purpose of this paper is making it easier
for all readers of this journal to cope with a literature which
involves different framing assumptions.
It should be clear there are serious limitations in many
of the framing assumptions of PMBOK 2004 from the
author’s perspective. In particular, the span of the proba-
bility concept used limits the span of the uncertainty and
risk concepts, which in turn limits the span of the optimi-
sation and opportunity concepts. The use of PI indices is
central to the PMBOK process and these span issues.
The follow-on paper [6] will develop the implications in
terms of generic process definition. The author is very con-
cerned about making sure the potential users of all guides
understand why common practice based on a simple read-
ing of PMBOK is not best practice. The author is also very
concerned to make it clear that this does not imply that
 C. Chapman / International Journal of Project Management 24 (2006) 303–313
contributing authors of the PMBOK guide follow it in a
simplistic way in their own practice, and other experts can-
not interpret it in more sophisticated terms. The basic dif-
ficulty with PMBOK as the author sees it is a simplistic
starting position which does not facilitate clearly under-
stood additional complexity when that complexity is use-
ful. It is not ‘simplicity efficient’ in conceptual terms.
It is perhaps less obvious but just as important to note that
the author is concerned that PMBOK 2004 may remain the
de facto definition of common practice because it is easy to
follow for those who are untroubled by its limitations unless
more sophisticated guides are made as easy to understand as
possible by all those concerned with producing guides for
their users. For example, trying to accommodate the use of
PI indices in guides like PRAM 2004 or RAMP 2005 which
provide much better tools is unhelpful in the author’s view. It
involves another kind of ‘simplicity inefficiency’.
But the author’s more general concern is the evolution
of all guides towards consistent support at a generic level
for the users of these guides. Other guides can be assessed
in similar terms using the approach to framing assumptions
outlined here. In the long term this should help all guides to
approach easily understood ‘best practice’. At present users
can be badly served by guides and a broader literature
which is confusing because it uses very basic words like
‘risk’ in very different ways, and it assumes very different
objectives are at stake, with very little discussion in the lit-
erature about the implications of these differences. Many
good guides are available, each with particular strengths.
To some extent they make different framing assumptions
because they are designed for different contexts. Making
different framing assumptions is not a problem in itself –
it is the lack of general awareness of the implications which
is the problem. The author hopes this paper generates some
progress towards the resolution of these concerns.
Acknowledgements
The author is grateful to all members of the PRAM and
RAMP working parties who contributed to the insights
about the points of contention which initiated this paper.
Stephen Ward provided comments on an early draft which
led to the separation of [6] and significant development.
Contributing authors for the PRAM, RAMP and PMBOK
guides provided very useful comments on earlier drafts:
Terry Williams, Mike Nichols, Chris Lewin, Stephen Grey,
Steve Simister, David Hillson, Martin Hopkinson, Crispin
(Kik) Piney, David Tilston, David Hulett and Paul Close,
in the order comments were first received, in some cases
an ongoing dialogue proving particularly helpful. Two
anonymous referees also provided very helpful suggestions.
References
[1] PMI (Project Management Institute). A guide to the project
management book of knowledge: PMBOK (project management
book of knowledge) guide. 3rd ed. Upper Darby, PA: PMI; 2004.
313
[2] APM (Association for Project Management). Project risk analysis
and management (PRAM) guide. 2nd ed. High Wycombe: APM
Publishing; 2004.
[3] Institution of Civil Engineers and the Faculty and Institute of
Actuaries. RAMP Risk Analysis and Management for Projects, 2nd
ed. London: Thomas Telford; 2005.
[4] Simon P, Hillson D, Newland K, editors. APM (Association for
Project Management) project risk analysis and management (PRAM)
guide. Norwich: APM Group Limited; 1997.
[5] Chapman CB, Ward SC. Why risk efficiency is a key aspect of best
practice projects. Int J Project Manage 2004;22:619–32.
[6] Hillson DA. Towards a risk maturity model. Int J Project Business
Risk Manage 1997;Spring 1(1):35–45.
[7] Hopkinson M. Maturity models in practice. Risk Manage Bull
2002;5(4).
[8] Chapman CB. Key points of contention in generic process descrip-
tions for project risk and uncertainty management. Int J Project
Manage (submitted for publication).
[9] Chapman CB, Cooper DF, Page MJ. Management for engineers.
Chichester: Wiley; 1987.
[10] Pratt JW, Raiffa H, Schlaifer R. The foundations of decisions under
uncertainty: an elementary exposition. J Am Stat Assoc
1964;59:353–75.
[11] Raiffa H. Decision analysis: introductory lectures on choices under
uncertainty. Reading, MA: Addison-Wesley; 1968.
[12] Chapman CB, Ward SC. Estimation and evaluation of uncertainty: a
minimalist first pass approach. Int J Project Manage 2000;18:369–83.
[13] Chapman CB, Ward SC. Managing project risk and uncertainty: a
constructively simple approach to decision making. Chichester:
Wiley; 2002.
[14] Chapman CB, Ward SC. Project risk management: processes,
techniques and insights. 2nd ed. Chichester: Wiley; 2003.
[15] Moder JJ, Phiips CR. Project management with CPM and PERT.
New York: Van Nostrand; 1970.
[16] Chapman CB, Ward SC, Harwood I. Minimising the effects of
dysfunctional corporate culture in estimation and evaluation pro-
cesses: a constructively simple approach. Int J Project Manage
2006;24:106–15.
[17] Dreck MH. <http://www.janegalt.net/blog/archives/004640.html>
[accessed 29.06.05].
[18] Treasury HM. The green book, appraisal and evaluation in central
government. 1 Horse Guards Road, SW1A 2HQ, London: HM
Treasury; 2003.
[19] Flyvberg B. In association with COWI. The British Department for
Transport, Procedures for dealing with optimism bias in transport
planning, Guidance Document. Report 58924, Issue 1, Department
for Transport, London, 2004.
[20] Knight FH. Risk, uncertainty and profit. Boston: Houghton Mifflin;
1921.
[21] LeRoy SF, Singell Jr LD. Knight on risk and uncertainty. J Political
Economy 1987;95:394–406.
[22] Ward SC, Chapman CB. Transforming project risk management into
project uncertainty management. Int J Project Manage
2003;21:95–105.
[23] Markowitz H. Portfolio selection: efficient diversification of invest-
ments. New York: Wiley; 1959.
[24] Senge PM. The fifth discipline: the art and practice of the learning
organisation. New York: Doubleday; 1990.
[25] Hillson D. Effective opportunity management for projects: exploiting
positive risk. New York: Marcel Dekker; 2003.
[26] Australian/New Zealand Standard AS/NZS 4360:2004. Risk Man-
agement. Homebush NSW 2140: Standards Australia and Wellington
6001: Standards New Zealand, 2004.
[27] Cooper DF, Chapman CB. Risk analysis for large projects. Chich-
ester: Wiley; 1987.
[28] Morris PWG, Hough GH. The anatomy of major projects. Chich-
ester: Wiley; 1987.
[29] Williams T. Modelling complex projects. Chichester: Wiley; 2002.