scholarly journals Risk management reconceived: reconciling economic rationality with behavioural tendencies

2010 ◽  
Vol 1 (1) ◽  
pp. 1 ◽  
Author(s):  
Ruth Murray-Webster ◽  
Sergio Pellegrinelli
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Economic Value ◽  
Project Planning ◽  
Economic Rationality ◽  
Planning And Control ◽  
Gain Loss ◽  
Audit Activity ◽  
And Control ◽  
Biases And Heuristics

Risk management practices as described in many leading texts feel counterintuitive to many practitioners and are frequently ignored, despite their being evidently logical and potentially valuable. Such practices are often conceived as a remedial post-planning, audit activity. This paper proposes an approach for dealing with project uncertainty and risk, grounded in economics and taking into account behavioural biases and heuristics. The proposed approach is argued to be an enhancement to conventional risk management practices and one that can serve organisations better while also aligning to experienced practitioners’ intuitive approaches. In particular, we argue: that the focus should be on adding economic value rather than reducing risk per se; that opportunity gain/loss is a superior metric for gauging potential impacts of risky events; and that creation of real options should be emphasised as part of the repertoire of generic response actions to risk. The approach also supports the integration and handling of uncertainty and risk as part of holistic project planning and control.

Lean project planning and control: empirical investigation of ETO projects

2019 ◽  
Vol 12 (4) ◽  
pp. 1120-1145 ◽  
Author(s):  
Gabriele Hofinger Jünge ◽  
Erlend Alfnes ◽  
Kristina Kjersem ◽  
Bjorn Andersen
Keyword(s):  
Project Management ◽  
Management Practices ◽  
Management Practice ◽  
Project Planning ◽  
Research Approach ◽  
Maturity Model ◽  
Content Type ◽  
Planning And Control ◽  
Engineer To Order ◽  
And Control

PurposeThe purpose of this paper is to empirically investigate an effective project management practice focusing on planning and control. By doing so, it contributes to the debate on rethinking traditional project management practices and accentuates the need for adjustments based on the project context.Design/methodology/approachThis paper extends the project management theory by proposing a lean project planning (LPP) and control framework, developed and tested in collaboration with ten engineer-to-order (ETO) companies. By following a design science research approach, elements from lean thinking and current project planning and control practices are combined into a maturity model (MM).FindingsETO project characteristics are identified, and their implications for planning and control are discussed. Nine enablers that transform current project planning and control approaches into a lean approach are defined, allowing the analysis of the underlying complexity of planning and controlling ETO projects and thus facilitating the determination of the actions required to improve project performance.Research limitations/implicationsOnce fully embedded in an organization, the presented MM can provide a safe framework for self-criticism and can be used to conduct self-assessments without the need for an external facilitator. Thus, this paper is of particular interest to practicing project managers who aim to implement LPP and control.Originality/valueTo the authors’ best knowledge, this paper is the first to empirically examine the journey toward LPP and control from a MM perspective. This research attempts to describe the enablers of LPP and control.

Risk and risk management practices

2020 ◽  
Vol 11 (8) ◽  
pp. 1555-1581 ◽  
Author(s):  
Adel Elgharbawy
Keyword(s):  
Risk Management ◽  
Credit Risk ◽  
Management Practices ◽  
Archival Data ◽  
Islamic Banks ◽  
Monitoring And Control ◽  
Content Type ◽  
Different Types ◽  
Conventional Banks ◽  
And Control

Purpose This study aims to compare types and levels of risk and risk management practices (RMPs) including the recognition, identification, assessment, analysis, monitoring and control of risk in both Islamic and conventional banks. Design/methodology/approach A questionnaire survey was conducted among the Islamic and conventional banks in Qatar, together with an analysis of archival data extracted from the Thomson Reuters Eikon database for the period 2009-2018. Data were analysed using descriptive statistics, ANOVA and regression analysis. Findings Islamic banks encounter unique types and levels of risk that are not encountered by conventional banks. In Islamic banks, risks such as those of operation and Sharia non-compliance are perceived to be higher, while in conventional banks other risks such as those of credit and insolvency are higher; other risks, for example, liquidity risk, are faced by both. RMPs are determined by understanding risk and risk management, risk identification, risk monitoring and control and credit risk analysis, but not by risk assessment and analysis. However, the RMPs of the two types of bank are not significantly different, except in the analysis of credit risk. Research limitations/implications The study contributes to the debate in the literature by developing a better understanding of the dynamism of risk management in Qatari banks, which can be extended to similar contexts in the region. However, the relatively small sample size in only one country limits the possibility of generalizing the findings. The survey methodology is based on the perception of bankers rather than their actual actions and does not provide in-depth analysis for each type of risk, especially credit risk. However, using archival data, in addition to those from the survey, minimises the bias that would result from depending on one source of data. Practical implications The study provides valuable insights into the different types and levels of risk, as well as the RMPs in Islamic and conventional banks, which can help in guiding the future development and regulation of risk management in the banking sector of Qatar and its region. Originality/value The study helps to explain the mixed results of previous studies that compare types and levels of risk and RMPs in Islamic and conventional banks. Using different types of data and analysis, it provides evidence from one of the fastest growing economies in the world. It also addresses the concerns over RMPs in banks since the global financial crisis.

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