11. Project Risk Management Terms

Question 1

Ordinal scales / Cardinal scales

Answer 1

• Ordinal scales A ranking approach that identifies and ranks the risks from very high to very unlikely or to some other value.
• Cardinal scalesA ranking approach to identify the probability and impact by using a numerical value, from .01 (very low) to 1.0 (certain).

Question 2

Data precision

Answer 2

The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature of the data submitted.

Question 3

Delphi Technique

Answer 3

An anonymous method of querying experts about foreseeable risks within a project, phase, or component of a project.

The results of the survey are analyzed by a third party, organized, and then circulated to the experts. There can be several rounds of anonymous discussion with the Delphi Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the project.

Question 4

Project resilience

Answer 4

awarness of unknowable-unknowns

Question 5

Utility function / Risk tolerance

Answer 5

A person’s or organization’s willingness to accept risk. Relative to the project priority as high-priority projects are typically risk adverse.

Question 6

Type of risks

Answer 6

OTHER TYPES

• External risks - these risks are outside of the project, but directly affect it—for example, legal issues, labor issues, a shift in project priorities, or weather. “Force majeure” risks call for disaster recovery rather than project management. These are risks caused by earthquakes, tornadoes, floods, civil unrest, and other disasters.
• Organizational risks - The performing organization can contribute to the project’s risks through unreasonable cost, time, and scope expectations; poor project prioritization; inadequate funding or the disruption of funding; and competition with other projects for internal resources.

Question 7

Prompt list for risks

Answer 7

Overall project risks subscribe to one of three common types of prompt lists used for risk identification.:

• VUCA
  Volatility, Uncertainty, Complexity, and Ambiguity of risk factors within the project.
• TECOP
  Technical, Environmental, Commercial, Operational, and Political factors of the project.
• PESTLE
  Political, Economic, Social, Technological, Legal, and Environmental domains.