Risk Management

Question 1

Risk

Answer 1

Risk that one or more events or actions will jeopardize, slow, or prevent the achievement of
project objectives.

Risk =
Impact ( of an event ) x probability of occurence ( of the event )

Question 2

Dealing with risks

Answer 2

• risk avoidance
  → lack of opportunity
• utilization risk shifting
  → insurance fee
• risk acceptance (self carrying)
  → risk awareness
  risk reduction
  → risk strategy

Question 3

Principles of risk-conscious action

Answer 3

1. We only accept controllable risks.
2. We do not deviate from established processes.
3. We are committed to the highest safety standards.
4. We only work within the scope of our competence.
5. We only accept orders of appropriate size.
6. We ensure personnel competence and capacity.
7. We work only with efficient and reliable partners.
8. We only work under contract.
9. We do not allow ourselves to be blackmailed.
10. We report risk-relevant events without delay.

Question 4

Risk potential

Answer 4

• General management risks
• Operational risks
• External risks
• Force majeure
• Other risks

Question 5

General management risks

Answer 5

• Strategic risks
• Corporate planning
• Legal risks
• Organization
• …

Question 6

Operational risks

Answer 6

• Investment risk
• Financing risk
• Operating risk
• Marketing risk
• …

Question 7

External risks

Answer 7

• Market risk
• Environment
• Country risk
• Economic risk
• …

Question 8

Customer risks

Answer 8

• Credit risk
• Contract risk
• Customer satisfaction
• Customer success
• Customer change

Question 9

Risk in construction projects

Answer 9

• Negative: Risk of deviation
• Positive: Opportunity through deviation

1. Coordinated activity to guide and control an organization with regard to risks
   -> Goal: Higher reliability in achieving the project goals
2. Analysis in terms of uncertainties that may lead to negative impacts on the project objectives
   -> Goal: Creation of transparency as basis for decision making

Question 10

External and internal factors throughout the construction phase

Question 11

Methods in risk assessment process

Answer 11

Choice depends on expected risk environment

• Systematized empirical data
• Retrospective Analyses
• Creativity techniques
• Statistical analysis

Question 12

Systematized empirical data

Answer 12

• Explicit knowledge
• Known and expected risk horizon
• Checklist for risks
• Damage catalog
  -> Categorized damages

Question 13

Retrospective Analyses

Answer 13

• Damage analysis of projects and risks
• Indicator analysis
  -> Change indicators e.g. dealing with changed market prices
• Scenario analysis
  -> Description of alternative states and derivation of options for action “Learning from the future”

Question 14

Creativity techniques

Answer 14

• Implicit knowledge
• Inclusion of expert competence
• Brainstorming
  -> Identification and Analysis in the team
• Delphi method
  -> Multi-stage survey method

Question 15

Statistical analysis

Answer 15

• Standard deviation
  -> Interpretation of costing, pricing, etc.
• Monte Carlo Simulation
  -> Aggregation of individual risks to estimate total risk
  -> Scenario planning with distribution function backed scope of risks

Question 16

Risk Management

Answer 16

1. Avoiding
   Accepted dangers:
2. Decreasing
   - technical
   - organizational
   - personal
3. Transferring
   - Danger transfer
   - insurance
   - contractual clauses
4. Accepting

Question 17

Example Risk Management: Economical

Answer 17

Avoiding: no offer in case of low creditworthiness
employer

Transferring: Insurance
against theft

Accepting: Calculation

Question 18

Transparency as a basis for decision making

Answer 18

• Cost of risks:
  Valuation as combination of consequence and probability
  of occurrence
• Risk management measures:
  Assessment of the costs of measures and their impact on risk

-Decision:
Risk measure and imputed approaches

Question 19

Risk aggregation according to Werner Gleißner

Answer 19

• Cause aggregation :
  Risiks with the same cause are bundled and their effect aggregated
• Effect aggregation :
  For risks with the same impact , the occuring causes ae aggregated
• Process flow of risk aggregation takes place at the risk assessment level

Question 20

Element of costing/pricing

Question 21

Risk Controlling

Answer 21

• Monitoring the risks
• Monitoring the measures

Question 22

Monitoring the risks

Answer 22

• Change of risks in the different phases of a project
• Project decisions lead to the emergence of new risk situations, their new individual risks must be identified, analyzed and
  managed

-Risks that have not been assessed and classified as serious can suddenly become a threat to success

Question 23

Monitoring the measures

Answer 23

• Periodic monitoring of the effectiveness of treatment measures
• Adaptation of coping measures in case of changes in risk potentials
• Example: Does adjusting construction sequencing and procedures mitigate schedule risks as identified?