The recent increase in international projects has resulted in higher risk along with difficulties in control and coordination. Effective project management can therefore be seen as being essential to the success of projects. The purpose of this paper is to understand how a large multinational company currently handles these issues. This paper conducts a case study that will look at the relationship between contingencies and their effects on project risk management. The findings show that although project risk management handles contingencies in standard projects it still requires improvement within complex projects. Therefore, based on research into agile project management a concept is proposed as an alternative for the case company to select project management method.

This thesis studies the overall parameters affecting projects’ risks and analyze different methodologies of project risk management in order to narrow down and develop a customized methodology applicable for Engineering, Procurement and Construction (EPC) projects in the oil and gas industry. To approach this goal, Bidboland II Gas Treating Plant project was selected as an appropriate case study. This case project has been analyzed by combining various risk management methodologies, and based on this analysis a new methodology was suggested to the company for risk management. Additionally, necessary changes in the organization have been proposed to handle the project risk issues in different levels with higher performance. The developed methodology can be applicable for other companies involved in EPC projects.

This thesis presents a generic framework for project managers and/or other stakeholders to assist them in qualitatively assessing and evaluating project risks. The main structure of this framework is constructed based on risk management area in PMBOK (Project Management Body of Knowledge) standard. Additionally, different best practices and methods in the field of risk management and decision making are studied and embedded in the framework. In spite of being theoretical in nature, the framework can contribute to the project risk management area developed by PMBOK, opening the possibility of further research for its verification.

Risk is everywhere and it is something which we face in everyday life. Same is the case with projects. Projects are complex and risks are inherent in projects. It is not unusual for unexpected events to occur and for uncertainty to emerge in projects. These events contribute to project riskswhich require to be dealt with so that projects could continue to run effectively. The need for good project risk management is therefore especially important as it could determine the successof the project or otherwise. However, research on the factors that make project risk response successful has been neglected. Contemporary researchers focused on risk management phases other than risk response. Our main focus in this paper is to indicate determinants of project risk response success and their relative importance in the construction industry of Sweden. The construction industry is considered as construction projects are not only important but they identify tangibly with the physical outputs of projects and exemplify the uncertainty and risks that are present in this type of projects. Sweden is chosen as the context of our study owing to the immense contributions of the construction sector towards the country’s growth and GDP. On thebasis of extensive literature review, we have come up with the determinants for project risk response success and developed a proposed conceptual model. A quantitative study is undertaken with the administration of questionnaires. The empirical data is gathered from project managers in the construction industry of Sweden for this purpose. Project managers are selected as respondents as they would be the ones controlling and managing projects, along with responding to the various risks subjected to in projects. Hypotheses have been generated for this research and the results are analyzed to determine if these hypotheses are to be accepted or rejected. For data analysis, SPSS is used. The results are drawn by the use of statistical tools like ANOVA, correlation and t-tests. These outcomes will lead to the conclusion of our study as to what the factors are that determine project risk response success and their relative importance. A revised conceptual model is finally developed to address the findings of our research. This research found a set of seven success factors which can be used as a guideline for project risk response success. These factors are (1) Team competency and skills, (2) Effective communication, (3) Active leadership, (4) Negotiation and coordination, (5)Hierarchical structure, (6) Behaviour and (7) Empowerment. These determinants of project risk response success can be generalized to the construction industry in Sweden. Keywords: project risk, project risk management, uncertainty, unexpected events, risk response, construction industry.

It is a well-known fact that macro-economic conditions, such as prices of commodities (e.g. oil, cement and steel) affect the cost of construction projects. In a volatile market environment, highway agencies often pass such risk to contractors using fixed-price contracts. In turn, the contractors respond by adding premiums in bid prices. If the contractors overprice the risk, the price of fixed-price contract could exceed the price of the contract with adjustment clauses. Consequently, highway agencies have the opportunity to design a contract that not only reduces the future risk of exposure, but also reduces the initial contract price. The main goal of this dissertation is to investigate the impact of commodity price risk on construction cost and the optimal risk hedging of such risks using price adjustment clauses. More specifically, the objective of the dissertation is to develop models that can help highway agencies manage commodity price risks. In this dissertation, a weighted least square regression model is used to estimate the risk premium; both univariate and vector time series models are estimated and applied to simulate changes in commodity prices over time, including the effect of correlation; while the genetic algorithm is used as a solution approach to a multi-objective optimization formulation. The data set used in this dissertation consists of TxDOT bidding data, market-based data including New York Mercantile Exchange (NYMEX) future options data, and Engineering News-Record (ENR) material cost index data. The results of this dissertation suggest that the optimal risk mitigation actions are conditional on owners' risk preferences, correlation among the prices of commodities, and volatility of the market.

ABSTRACT A GENERIC RISK AND VULNERABILITY ASSESSMENT FRAMEWORK FOR INTERNATIONAL CONSTRUCTION PROJECTS &Ouml / zcan, G&uuml / lbin M.Sc., Department of Civil Engineering Supervisor: Assoc. Prof. Dr. /rem Dikmen Toker Co-Supervisor: Prof. Dr. M. Talat Birg&ouml / n&uuml / l July 2008, 105 pages Project Risk Management (PRM) comprises of identification and assessment, analysis and mitigation of risk factors in order to meet the project objectives. Risk identification and assessment process has the greatest importance as the risk models are constructed based on previously defined risk sources and their interrelations. Although previous studies have concentrated on the relation between risk events and their consequences, the link between them must be modeled by considering the various chains of risk events and the capacity of a &ldquo / system&rdquo / to react to risk events simultaneously. The concept of &ldquo / risk paths&rdquo / should be used to identify chains of risk events by means of a Hierarchical Risk Breakdown Structure (HRBS) rather than defining individual risk factors. The &ldquo / system&rdquo / consists of the characteristics of the project, company and involved parties. The word &ldquo / vulnerability&rdquo / is used to describe the degree v to which a project is susceptible to adverse effects of change. The aim of the current study is to develop a common vocabulary and design a HRBS that integrates vulnerability factors with risk factors. A generic risk and vulnerability assessment framework for international construction projects is presented in this research. The justification of the factors considered within the breakdown structure has been achieved by referring to real construction projects carried out by Turkish contractors in international markets.

Project Risk Management (PRM) plays an important part in determining project success and it is considered an essential activity for companies. The literature provides a vast amount of tools and techniques created to help project managers to deal with project risks. However, in practice, project managers use few tools and techniques. The aim of this research is to understand the reasons for the non-use of PRM tools and techniques by project managers when dealing with risks in the Swedish manufacturing sector. In order to provide evidence on why project managers do not use PRM tools and techniques, this study identifies a list of tools and techniques to investigate, and a list of possible reasons. Both these lists derive from the existing literature and past research. This qualitative study is based on multiple case studies of seven companies with nine respondents. The companies are based in the Umeå region and operate in the manufacturing sector. This study has revealed that project managers, within the sample, prefer to use qualitative tools and techniques such as meetings and expert judgements when dealing with risks. On the contrary, most of the tools and techniques for quantitative risk analysis are not used. There is a lack of awareness regarding the existing tools and techniques, and in general regarding the basic concepts of Risk Management (RM). Project managers tend to heavily rely on intuition and past experience when dealing with project risks. Other reasons that account for the non-use of tools and techniques are lack of resources and an unwarranted use in relation to the project type. In some cases project managers might avoid or delay the management of negative risks and therefore to do not use tools and techniques. Furthermore, two more reasons emerge from the analysis of data, which contribute to a better understanding of the reasons behind the non-use of PRM tools and techniques. These reasons are small increment in quality of RM by using PRM tools and techniques and complacency by project managers when using PRM tools and techniques. This research extends prior literature by providing evidence on the use and non-use of PRM tools and techniques and the reasons for their non-use in a sector where there is a lack of research. Finally, two more reasons are discovered and can contribute to a better understanding of the existing gap between theory and practice of RM.

This research addressed the need for in-depth investigation of what actually happens in the practice of risk management in software package implementation projects. There is strong 'official' sanction in the IT literature for the use of formal risk management processes for IT projects but there is a confused picture of their application in practice. While many potential risk factors for IT projects have been identified, and formal procedures have been prescribed for the management of these risks, there has been little work investigating how project managers assess these risks in practice and what countermeasures they employ against these risks in their projects. In particular, the study used an interpretive critical decision interview approach to focus on those areas of risk management knowledge that project managers have acquired through experience, i.e. tacit knowledge. A new categorization of risk factors emanating from three sources -- vendor, client, and third party -reveals risk factors not previously identified. Some of these new factors arise from the three sources noted, while others arise from the package implementation focus of the projects and from aspects arising from the location of the projects in Hong Kong. Key factors that cause problems even when anticipated and mitigated, and the most often unanticipated problems are also identified. The study further presents an examination of the studied managers' risk management practices, and the strategies they use to address both potential and actual problems. This examination revealed close conformance with recommended literature prescriptions at some stages of projects, and significant variation at other stages, with strategies applied being broad and general rather than risk specific. A useful categorization of these strategies into four broad groups relating to different sets of risk factors is presented, reflecting the actual practice of respondents. Tacit knowledge was revealed throughout these investigations in the variances observed between prescribed and actual practice, and particularly from an examination of project managers' decision-making practices from two different perspectives - rational and naturalistic. A hybrid decision-making model is proposed to capture the actual processes observed, and to provide prescriptive guidance for risk management practice. The investigation makes a contribution to the field of IT project risk management in three ways. First, the investigation has addressed the need for empirical studies into IT risk management practices and the factors influencing project managers in their choice and application of strategies to manage risk. Second, by examining how experienced IT project managers approach the task of managing risk in software package implementations, the study has extended our understanding of the nature of the knowledge and skills that effective IT project managers develop through experience. Third, the study makes a theoretical contribution to our understanding of IT project risk management by examining the decision-making processes followed by IT project managers from the perspective of two contrasting theories of decision-making - the rational method and the Naturalistic Decision Making theory.

This research is conducted to formulate a framework for project risk management by evaluating the current understanding and practices. It examines the risk management processes provided by the various standards, frameworks and guidelines available globally. The research argues that the existence of varying risk management standards, frameworks and guidelines is not an assurance that organisations will adopt their principles and processes. Furthermore, these documents do not provide sufficient information concerning the understanding of the concept of risk and uncertainty and their management. To accomplish this goal, it became necessary for the research to reach an understanding about the concepts and fundamental issues of risk and uncertainty management. This research also sought to know how organisations in different industries manage risks and uncertainties for their projects. This research was confined to the study of the understanding and practices of PRM by established or influential organisations in aerospace and aviation, oil, gas and petrochemical, power, telecommunication as well as construction industries with matching criteria. Semi-structured interviews were conducted using an ‘aide-memoire’ with managers involved in the management of project risks to document the current practices of risk management. Thematic analyses were used to compress and summarise the large amount of data into internally consistent understandings of risk and uncertainty. Based on the results, the research proposes a structure that explains the current understanding of the concepts of risk and uncertainty as well as an outline process framework for conducting risk management for industry use. Practically, risk and uncertainty are found to be interrelated whereby and they happen as an outcome of each other’s occurrence. The proposed framework consists of six major steps which incorporated the purposes and activities within, providing a better understanding of how risk can be managed. This research contributes theoretically, methodologically and practically to project risk management body of knowledge.

The aim of this thesis is modification of the teaching block IS/ICT Project Management at the Department of Information Technologies of the Prague University of Economics by the risk management issues. At present, insufficient space is given to this topic and this may thus create the feeling with the students that this is a marginal issue in the project management. The theoretical starting points to this thesis are above all the PMBOK methodologies of the PMI organization and further the PRINCE2 of the OGD organization. As these are the internationally acknowledged IT project management standards, therefore the key significance is given to them as to the theoretical starting points. Naturally, the part of these methodologies related to the project management is utilized of them. To sketch in the point of view of the issue, the RIPRAN methodology is added that is of Czech origin and was developed by doc. Ing. Branislav Lacko of the Brno University of Technology. This methodology deals only with the risk management. The own new point of view of the risk management that comes out from the above-mentioned theoretical presumptions is divided into following parts: planning, identification, qualitative analysis, quantitative analysis, project simulation, evaluation. As the primary utilization of this thesis is for the students of the Prague University of Economics, namely above all for the students of the given course, this fact is taken into account also in the course of work with the risks. This means, among others, that it is not possible to implement the project according to the plan, and thus simulation tools are utilized for its implementation. All aspects coming out from this school environment have been included in the thesis. A tool in MS EXCEL table editor has been developed for the work with the risks where all steps of the risk management are carried out, namely including the data for subsequent creation of the outputs -- reports, analyses, etc. An advantage of this environment is the possibility of its utilization for automatic procedures. Full use of this characteristic has been made in the tool.