Principles of Risk Management

Learning Outcomes

Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

• explain the range of factors that can influence the perception of risk and principles, involved in achieving effective risk identification;
• explain and critically compare the ways in which risk and uncertainty may be described and evaluated.

Knowledge and Understanding

Having successfully completed this module, you will be able to demonstrate knowledge and understanding of:

• the key concepts and theories that should inform uncertainty management and associated processes.
• the scope for risk and uncertainty management in an organisational context;

Transferable and Generic Skills

Having successfully completed this module you will be able to:

• apply and develop key skills in critical thinking, reflection and verbal communication during the module, and subsequently through preparation of the written assignments, key skills in information handling, critical analysis and written communication.

• Definitions of risk, threat, opportunity and uncertainty distinguished; relationship with performance objectives, implications for uncertainty management. RM, opportunity management and uncertainty management compared.
• Sources of uncertainty: six perspectives: corporate strategy, asset management, people, projects, decision making, the systemic perspective, causes of system failure.
• Application contexts and associated RM issues. Operating, project, programme, strategy, and corporate contexts.
• Objectives for RM applications Distinguishing benefits and objectives for RM. Objectives for process, application, performance and strategic capability; links between these objectives.
• General responses to uncertainty (anticipation, resilience, flexibility, control).
• Formal RM and process frameworks; benefits of formal processes, process issues.
• Understanding uncertainty Quantification of uncertainty (distinguishing targets, expectations and commitments); measures of risk (mean, variance, semi variance, cumulative probability distributions), interdependence between sources of uncertainty (eg virtuous and vicious circles). Limitations of probability impact grids.
• Risk perception and estimation - sources of bias and estimation problems.
• Risk evaluation Cost benefit analysis as a basic framework: scope and limitations. The importance of risk-performance trade-offs, and risk efficiency as a key criterion in evaluating alternative course of action.
• Attitude to risk: Risk aversion, loss aversion and framing of decision choices, cultural effects, risk appetite.
• Multi-party issues Risk ownership, risk allocation and related risk management implications.
• Professional standards and guidelines concerning risk management.

Teaching and learning methods

The module is taught through a mixture of methods ranging from guided background reading, interactive lectures, and discussion of concepts and examples. The first part comprising lectures will focus on generic concepts and processes. The second part will comprise a series of presentations from groups of students reporting on their study of a selected risk management publication from a list selected by the module coordinator to reflect pertinent concepts and risk management issues. Potential sources are numerous, including journal articles, specific textbooks, professional guidelines and standards, Government publications (OGC in UK), National Audit Office reports etc.

Following each group’s presentation, the class will interrogate the group and discuss emergent issues. Students will work in small groups and present a short report on their analysis to the rest of the class, who will then discuss issues arising from each presentation. This will serve two main purposes, first to increase students’ knowledge and awareness of pertinent concepts and issues in contemporary risk management, and second, to encourage focused, critical reflection on a specific risk management topic.

Learning activities include an assignment (group and individual), case studies, private study.

Resources & Reading list

Textbooks

Adams J (2001). Risk. Oxford: Abingdon.

Stephen Ward (2004). Risk Management: organisation and context. London: Witherby.

C.B. Chapman and S.C. Ward (2003). Project risk management: processes, techniques and insights. Chichester: John Wiley & Sons.

Formative

This is how we’ll give you feedback as you are learning. It is not a formal test or exam.

Summative

This is how we’ll formally assess what you have learned in this module.

Referral

This is how we’ll assess you if you don’t meet the criteria to pass this module.

Repeat

An internal repeat is where you take all of your modules again, including any you passed. An external repeat is where you only re-take the modules you failed.

Repeat Information

Repeat type: Internal & External