Risk profiles in project management

Abstract

In construction projects, there are always uncertainty and unexpected situations that may occur. The future cannot be predicted, but preparations can be made for surprises and it can be developed ability to respond to them when they happen. Risk management is a learning process through time, and the risk management is much more inefficient if the duty has not been good from the beginning of the project. During the beginning, there are often high level of uncertainty, so this part of the project life cycle requires greater effectively risk managing. A good risk management approach requires a systematic methodology, knowledge and experience.

This report will first address the definition of a risk and one approach of risk managing- the cognitive approach. A cognitive model, based on the approach, will be introduced and from this four cognitive conditions are determined. These conditions represent the knowing of the risk source and the knowing of the risk event. Then, the propensity for risk and uncertainty are looked into, where some decision-making criteria are identified; risk-neutral, risk averse and risk-seeking. This terms are explained later in the report. At the end the practice course of risk managing will be described, both method, routines and strategy.