Prosjektledelse, Nr. 2 - 2003 - Norsk senter for prosjektledelse - NTNU

endeavour managing the inherent
uncertainty and need for integration in
order to deliver beneficial objectives of
change” [2].
The word Risk
Project Management Institute (PMI)
and the UK Association for Project
Management (APM), both have adopted
a broad view of risk. Their definitions
of risk are very similar, as follows:
APM
“Risk – an uncertain event of set circumstances
that, should it occur, will
have an effect on the achievement of
the project’s objective “ [3]
PMI
“Risk –an uncertain event or condition
that, if it occurs, has a positive or negative
effect on a project object” [4]
The PMI definition of “Risk” allows
for a positive and negative effect. In
practical terms this may be so. An event
may turn out better that anticipated
and yield a positive effect on the event
itself as well as interlinked activities.
The measures implemented in the conventional
RMP are barriers, or risk
based strategies to prevent the negative
potential to occur and to reduce the
impact if it does occur. Assume that the
event was completed successfully and
the negative elements did not occur. Is
this situation an opportunity, or a result
of effective risk management Well,
firstly, if the negative elements did not
occur, - it could just be a probabilistic
Cause & the roots of uncertainty
Understanding the
roots of uncertainty
Uncertainty
Uncertainty
Management
Prob. *utility
Implication of significat uncertainty
or random outcome, or the control barriers
was proven effective or working
methods to reduce the negative risk to
occur was proven effective The learning
outcome can be employed in opportunities
that may improve project
results and enhance value creation. But
in order to achieve this a system for
such activities must be in place.
The figure below gives an outline of a
conceptual framework with focus on
uncertainty management.
Uncertainty in this conceptual model
can encompass all elements, human,
material information, process, market
situations, financial, contractual, technological,
political, environmental, etc.
The concepts uncertainty and risk are
used in different ways in the literature.
However, in general terms uncertainty
characterises situations where the actual
outcome of a particular event or activity
is likely to deviate from the estimate
or forecast value. Uncertainty is the
combined effect of the initiating events
and all processes that cause and affect
the outcome. Each of the initiating
events and processes may be predictable.
Their combined effect is usually
considered less predictable. Uncertainty
is determined to some degree by the
type of and number of such processes
involved.
Project Risk Management is an established
term in Norway and international
and will most likely be so in time to
come. However, I will argue the knowledge
gained in risk management processes
can effectively be employed in a
Learning loop
Opportuneties
Risk
Positiv
Negative
Positive
Negative
Sustainable competative advantage
more holistic perspective of project and
business enterprises to gain sustainable
competitive advantages. The concept
uncertainty management requires effective
understanding of uncertainty.
Efficient uncertainty management
requires an effective process an effective
process for sorting out which aspects of
uncertainty need to be understood at
deeper level than that currently available.
In the figure below dynamic and
complexity is illustrated in the same
room as uncertainty, little research has
been done in this area. Different strategies
and success factors will be required
in order to effectively manage projects
within the level of tolerability and vulnerability
that is acceptable to owners
and stakeholders in general.
Uncertainty management may prove
valuable in this perspective.
Leverage
strategies
Dynamic
Trust worthy
strategies
Uncertainty
•Ambiguity
Precautionary
strategies
Complexity
Success
factors
Risk based
strategies
Common notions of risk
In everyday language, risk is used in
different contexts. These either emphasize
its negative connotation related to
the possibility of undesirable outcomes
or underline extra rewards that can be
gained only at the price of uncertainty
and possible loss. For example, Latin
proverbs adopted in several languages
relate risk to uncertainty (“do not buy
a pig in a poke”) and possible loss
(“gold may be bought to dear”), or
define risk as a necessary condition of
success (“nothing ventured, nothing
gained”). Risk measures in the riskvalue
models are consistent with the
second meaning. They relate risk to the
probability distribution of all outcomes.
Since greater value and lower risk are
more desirable, people choose risky
options only if they also offer high
expected returns.
In contrast, the dictionary definitions of
risk as a possibility of harm or other
losses are in agreement with the first
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