Risk Case Study

1. Theory and main concepts of Risk

1.1. Risk

Risk is the potential for unwanted or adverse effect or consequences to life, property or health, probability of frequency of an event multiplied by the impact or consequence of the event and uncertain event or condition that if it occurs has a positive or negative effect on the project objective. Risk is the possibility that something unpleasant will happen (Oxford dictionary). Risk’s origin refers to the French word “Risque”, to the Italian words “risco”, and “richiare” (Hay-Gibson, 2009, Cited in Lemieux, 2010, P.200), it has an origin in Portuguese meaning “to dare” (Althaus, 2005; Hey-Gibson, 2009; Lemieux, 2010).

Initially the definition of concept of risk was loss or hazard to the person,

In some situations, risk arises from the possibility of deviation from the predefined strategy or event when there is at least the possibility of negative consequences.

- Joint Technical Committee OB-007 (Standards Australia/Standards New Zealand, 2009,p.l) defines risks as the effect of uncertainty on objects causing a deviation from the expected-positive and/or negative aspects.

- The quantitative engineering definition of the risk is: Risk = (probability of an accident) X (losses per accident)” (Agrawal, 2009, P.2.7)”

In general, two main aspects of risk are uncertainty and consequences and the two major parameters of defining the risks are probability of the risk and the severity of the risk.

1.2 Project Risk

- Thompson and Perry (1992, P.3) define the project as a new structure, system or service and also a substantial renovation extension or replacement.

- Based on Boyce (2003) a project is a certain type of service which gathers different products together in order to active an inclusive

A cause may be considered as an assumption, condition, constraint, or a requirement that makes the probability of positive or negative results, and project objectives consist of cost, time, resource, scope and quality.

1.3 Project risk Management

Project risk management is the process of identifying, analyzing, and responding to risk throughout the life of a project and meet project objectives.

The objective of the project risk management is to increase the probability and impact of positive events (opportunities), and decrease the probability and impact of negative events (threats).

“Thompson and Perry (1992) state that the aim of applying risk management is not to remove all of the risks from the project, but to ensure that all risks are managed effectively. This approach provides many benefits for various types of enterprises, some examples are:

- “Improvement of decision-making methods in order to be less subjective and more systematic;

- Enable the projects to be compared together for sturdiness against particular uncertainties;

- Illustrate the importance of any single