DECISION THEORY AND

PROJECT RISK MANAGEMENT

MAPM- 607-3

Copyright AAUSC 2023/24

COURSE DESCRIPTION
Risk is inherent in the activities we choose. Within a
project, risks are unplanned events or conditions
that can have a positive or negative effect on its
success. Not all risks are bad, but almost all are seen
as a threat.
Risks in a project, should they come to fruition, can
mean total project failure, increased costs, and
extended project duration among other things.
Risk management is the process in which the project
manager and project team identify project risks,
analyze and rank them, and determine what actions,
if any, need to be taken to avert these threats.
In this course, we’ll discuss risk management
planning, risk identification, analysis, response
planning, and the monitoring and control of the
identified risks. 2
COURSE DESCRIPTION & OBJECTIVES
 The Project Risk Management Process, described herein, is
intended to result in the effective management of project risks
and opportunities during the entire project life cycle – from
project inception to completion of construction. The
project manager, project sponsor, and project team members
jointly develop a risk register that enables them to identify,
assess, quantify, prepare a response to, monitor, and control
project risks.
 This course provides information to project managers and
project teams that will help with their risk management efforts
in the following ways:
 Provide a consistent methodology for performing project risk
management activities.
 Provide techniques and tools for project risk management.
 Identify data requirements for risk analysis input and output.
 Provide information on how project risk management fits into
the overall project management process.
 Provide guidance on how to proactively respond to risks.
P 3
COURSE CONTENTS - Chapters
Chapter 1: Introduction
Chapter 2: Preparing The Organization: Building A Risk Management Culture
Chapter 3: Systematic Risk Management
Chapter 4: Making Risk Policy: A Risk-based Program Management Manual
Chapter 5: Risk Analysis
Chapter 6: Risk Matrix Samples
Chapter 7: Customer-driven project Management, TQM, And Risk
Chapter 8: Risk Decisions And Actions
Chapter 9: Building A Risk Management System
Chapter 10: Risk Lessons Learned And The Project Risk Audit
COURSE CONTENTS
Chapter 1: Introduction
1.1 Awareness about Risk
1.2 Uncertainty in Projects
1.3 Projects, Risk and Project Management
1.4 The Need for This Module
1.5 What is Risk?
 Definitions and Concepts of Risk

Chapter 2: Preparing The Organization: Building A

Risk Management Culture
 2.1 Risk: The Organizational Culture Issues
 2.2Classifying Risk
 2.3 The Nature of Projects
 2.4 Project Complexity
 2.5 Mapping Project Risks
 2.6 Risky Projects
 2.7 Customer Requirements
 2.8 Work Breakdown Structure
 2.9 Task List
 2.10 Network Diagram
 2.11 Customer and Client Risks
 2.12 Project Manager’s Roles and Responsibilities in Risk Mgt.
COURSE CONTENTS
Chapter 3: Systematic Risk Management
 3.1 Demystifying Risk-PMBOK
 3.2 Inputs to Risk Management Planning
 3.3 Tools and Techniques for Risk Management Planning
 3.4 Risk Identification
 3.5 Qualitative Risk Analysis
 3.6 Quantitative Risk Analysis
 3.7 Risk Monitoring and Control
 3.8 Summary of Risk Management Process
 3.9 Stakeholder Risks - Not Project Risks
 3.10 Features of Systematic Risk Management
 3.11 Risk Management Systems
 3.12 Establishing the Risk Context
 3.13 Risk Identification

Chapter 4: Making Risk Policy: A Risk-based

Program Management Manual
 4.1 Program Management: Roles and Responsibilities
 4.2 Five-Step Scheduling Process
 4.3 Defining the Program Management Process and Risk
COURSE CONTENTS
Chapter 5: Risk Analysis
 5.1 Introduction
 5.2 Risk Allocation
 5.3 A Three-Dimensional Risk Magnitude Perspective
 5.4 Other Assessment Techniques
 5.5 Risk Ranking

Chapter 6: Risk Matrix Samples

 6.1Steps in Preparing a Risk Matrix
 6.2 Summing up: Risk Matrix Examples

Chapter 7: Customer-driven project

Management, TQM, And Risk
 7.1 Customer-Driven Risk Management
 7.2 Portfolio and Program Management
 7.3 Value of Customer-Driven Risk Management
COURSE CONTENTS
Chapter 8: Risk Decisions And Actions
 8.1 Introduction
 8.2 Risk Response Options
 8.3 Strategic Risk Response
 8.4 Risk Monitoring and Control
 8.5 Risk Disaster Planning and Risk Recovery
 8.6 Post-Project Risk Evaluation and Recording
 8.7 Communicating Risk Messages
Chapter 9: Building A Risk Management System
 9.1 Introduction
 9.2 Organizational Maturity in Risk Management
 9.3 Organizational RMS Policy and Implementation Strategy
 9.4 Clarifying Objectives, Tasks and Commitments
 9.5 Creating a Project Risk Management Framework
 9.6 Assigning RMS Responsibility
 9.7 Risk Management Communication
 9.8 Trialing Techniques
 9.9 Evaluating Response Options
 9.10 Evaluating, Monitoring and Control Procedures
 9.11 Establishing Risk Registers
 9.12 Reviewing RMS Performance

Chapter 7: Customer-driven project Management, TQM, And

Risk
 7.1 Customer-Driven Risk Management
 7.2 Portfolio and Program Management
COURSE CONTENTS
Chapter 10: Risk Lessons Learned And The
Project Risk Audit
 10.1 How to do Risk Lessons Learned Review
 10.2 A Postscript to Lessons Learned
 10.3 Opportunity Management
METHODS/MODES OF DELIVERY
 Lecture on major conceptual frameworks of
Decision Making and project risk management.
 Case analysis on hypothetical projects to learn

more on project objectives, deliverables, and

management of risk.
 Individual and group presentation on main

topics of the course.

METHODS OF EVALUATION/Modes of Assessment

Article Review and Presentation

15%
Book Chapter Review and Presentation
15%
Specific Project Analysis (Group)
20%
Final Examination
50%
Total 100%
REFERENCES
Barkley, B. T., PROJECT RISK MANAGEMENT,
The, Mc, Graw-Hill Companies Inc., 2004.
 Edwards, P. J., and Bowen, P. A., RISK
MANAGEMENT IN PROJECT ORGANIZATIONS,
Elsevier Butterworth Heinemann, 2005.
 Chapman, C., and Ward, S. PROJECT RISK
MANAGEMENT, Processes, Techniques and
Insights, John Wiley & Sons Ltd., 2003.
 King, R., RISK MANAGEMENT, Scitech
Educational Ltd., 2000.
 Harrington, S. E. and Niehaus, G. R. RISK
MANAGEMENT AND INSURANCE, Irwin/Mc Graw
Hill Companies, 1999.