Value creation through project risk management

Pelle Lundquist Willumsen*, Josef Oehmen, Verena Stingl, Joana Geraldi

*Corresponding author for this work

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

Risk management is a common and widely adopted project practice. Practitioners use risk management based on a common assumption that risk management adds value to projects. Yet, in the complex and ambiguous environment of a project, value is often subjective. If this is the case, then how do stakeholders perceive project risk management to create value? This paper presents a literature review and an empirical study of project risk management as a means of creating value. The empirical study is based on interviews, analyzed through qualitative analysis, to unravel the subjective value of project risk management. Specifically, we addressed how practitioners perceived the connection between project risk management practices and value creation. We found that stakeholders' perceptions of value played an important role in how value was created through project risk management. What a stakeholder perceives to be important, such as the prospective outcomes of a project, influences the perceived value of a given project risk management practice. The empirical findings indicate the need for a contextualized understanding of the value of project risk management, and thereby provide a more nuanced view of the variety of forms through which project risk management can create value. The findings question the “universal ideal” of PRM value creation portrayed in the academic and practitioner literature.
Original languageEnglish
JournalInternational Journal of Project Management
Volume37
Issue number5
Pages (from-to)731-749
ISSN0263-7863
DOIs
Publication statusPublished - 2019

Cite this

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title = "Value creation through project risk management",
abstract = "Risk management is a common and widely adopted project practice. Practitioners use risk management based on a common assumption that risk management adds value to projects. Yet, in the complex and ambiguous environment of a project, value is often subjective. If this is the case, then how do stakeholders perceive project risk management to create value? This paper presents a literature review and an empirical study of project risk management as a means of creating value. The empirical study is based on interviews, analyzed through qualitative analysis, to unravel the subjective value of project risk management. Specifically, we addressed how practitioners perceived the connection between project risk management practices and value creation. We found that stakeholders' perceptions of value played an important role in how value was created through project risk management. What a stakeholder perceives to be important, such as the prospective outcomes of a project, influences the perceived value of a given project risk management practice. The empirical findings indicate the need for a contextualized understanding of the value of project risk management, and thereby provide a more nuanced view of the variety of forms through which project risk management can create value. The findings question the “universal ideal” of PRM value creation portrayed in the academic and practitioner literature.",
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Value creation through project risk management. / Willumsen, Pelle Lundquist; Oehmen, Josef; Stingl, Verena; Geraldi, Joana.

In: International Journal of Project Management, Vol. 37, No. 5, 2019, p. 731-749.

Research output: Contribution to journalJournal articleResearchpeer-review

TY - JOUR

T1 - Value creation through project risk management

AU - Willumsen, Pelle Lundquist

AU - Oehmen, Josef

AU - Stingl, Verena

AU - Geraldi, Joana

PY - 2019

Y1 - 2019

N2 - Risk management is a common and widely adopted project practice. Practitioners use risk management based on a common assumption that risk management adds value to projects. Yet, in the complex and ambiguous environment of a project, value is often subjective. If this is the case, then how do stakeholders perceive project risk management to create value? This paper presents a literature review and an empirical study of project risk management as a means of creating value. The empirical study is based on interviews, analyzed through qualitative analysis, to unravel the subjective value of project risk management. Specifically, we addressed how practitioners perceived the connection between project risk management practices and value creation. We found that stakeholders' perceptions of value played an important role in how value was created through project risk management. What a stakeholder perceives to be important, such as the prospective outcomes of a project, influences the perceived value of a given project risk management practice. The empirical findings indicate the need for a contextualized understanding of the value of project risk management, and thereby provide a more nuanced view of the variety of forms through which project risk management can create value. The findings question the “universal ideal” of PRM value creation portrayed in the academic and practitioner literature.

AB - Risk management is a common and widely adopted project practice. Practitioners use risk management based on a common assumption that risk management adds value to projects. Yet, in the complex and ambiguous environment of a project, value is often subjective. If this is the case, then how do stakeholders perceive project risk management to create value? This paper presents a literature review and an empirical study of project risk management as a means of creating value. The empirical study is based on interviews, analyzed through qualitative analysis, to unravel the subjective value of project risk management. Specifically, we addressed how practitioners perceived the connection between project risk management practices and value creation. We found that stakeholders' perceptions of value played an important role in how value was created through project risk management. What a stakeholder perceives to be important, such as the prospective outcomes of a project, influences the perceived value of a given project risk management practice. The empirical findings indicate the need for a contextualized understanding of the value of project risk management, and thereby provide a more nuanced view of the variety of forms through which project risk management can create value. The findings question the “universal ideal” of PRM value creation portrayed in the academic and practitioner literature.

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