Principles of Risk Management

Learning Outcomes

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;

Subject Specific Intellectual and Research Skills

Having successfully completed this module you will be able to:

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

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.

The module is taught through a mixture of methods ranging from guided background reading, interactive lectures, and discussion of concepts and examples. Most lectures will focus on a distinctive principle of risk management, which can be applied widely by students on highly diverse programmes of study. Potential sources are numerous, and students are encouraged to read widely beyond the illustrative texts listed in the module handbook. A 1200 word assignment, to be marked in December, is intended to give students early feedback on their academic writing skills before they submit their 2000 word essays at the end of the module. Learning activities include an individual assignment, case studies and private study that should focus on research for the 2000 word essay at the end of the module.

Formative

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

Group presentation

• Assessment Type: Formative
• Feedback: Formative feedback relates chiefly to unmarked group presentations which all students participate in. Questions and answers sessions after each group presentation help students prepare their 1200 word reports, which are based on their group presentation topics. Within these sessions, the lecturer always makes suggestions for the individual reports based on how well the group presentations have gone.
• Final Assessment: No
• Group Work: Yes

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.