14. Managing Risk and Uncertainty

  1. Hans J. Thamhain

Published Online: 4 APR 2014

DOI: 10.1002/9781118849958.ch14

Managing Technology-Based Projects

Managing Technology-Based Projects

How to Cite

Thamhain, H. J. (ed) (2014) Managing Risk and Uncertainty, in Managing Technology-Based Projects, John Wiley & Sons, Inc., Hoboken, NJ, USA. doi: 10.1002/9781118849958.ch14

Publication History

  1. Published Online: 4 APR 2014
  2. Published Print: 2 APR 2014

ISBN Information

Print ISBN: 9780470402542

Online ISBN: 9781118849958

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Keywords:

  • analytical approaches;
  • enterprise performance;
  • project performance;
  • risk management;
  • risk-impact model;
  • uncertainty

Summary

This chapter highlights the importance of managing risk and uncertainty by using Intel as an example. Risk occurs when uncertainties emerge with the potential of adversely affecting business activities performance. Analytical approaches are important tools for risk management and are predominately used for quantifying probabilities of risk. Three sets of variables affect the ability of dealing with risk: (1) degree of uncertainty, (2) project complexity, and (3) impact on project and enterprise performance. Degrees of uncertainty can be classified into four categories namely, variations (known uncertainty), contingencies (uncertainty is known but difficult to quantify), accidents (known or unknown uncertainty with unknown timing and impact), (4) unknown-unknowns (risk is unknown and unexpected). Effective risk management focuses on risk reduction via simplifying the work and its transfer processes, shortening development cycles, and testing project feasibility early.