Chapter 6Question 1: Read, list and discuss: a. The stages of group development b. Types of conflicts c. Types of negotiation Chapter 7 1.Do you agree with the following statement: “With proper planni

Hence, in those project environments, it would be appropriate to develop mitigation strategies to address this risk, given its high likelihood of occurring and the negative c\�onsequences it would engender. For example, the project manager could develop a bonus or other incentive program to reward personnel who remain on the project team as a useful response (risk mitigation) for the potential loss of key personnel during the project.

Risk and opportunity are mirror opposites of the same coin—opportunity emerges from favorable project uncertainties and negative consequences from unfavorable events. Figure 7.2 illustrates the dynamics of risk and opportunity over the project life cycle compared to the severity of negative consequences. Early in the life of a project, both risk and opportunity are high. The concept may be thought valuable, and the opportunities are strong, as are the nega- tive risks. This result is due to the basic uncertainty early in a project’s life cycle. Until we move forward into the development phases, many unanswered questions remain, adding to overall project uncertainty. On the other hand, the severity of negative consequences (the “amo\�unt at stake”) is minimal early in the project’s life. Few resources have yet been committed to the project, so the company’s exposure level is still quite low. As the project progresses and more budget money is committed, the overall potential for negative consequenc\�es ramps up dra- matically. At the same time, however, risk continues to diminish. The project takes on a more concrete form and many previously unanswered questions (“Will the technology work?” “Is the development time line feasible?”) are finding answers. The result is a circumstance in which overall opportunity and risk (defined by their uncertainty) are dropping just as the amount the company has at stake in the project is rising. The periods of greatest worry shown in Figure 7.2 are the execute and finish stages, at which point uncertainty is still relatively high and the amount at stake is rapidly increasing. The goal of a risk management strategy is to minimize the company’s exposure to this unpleasant combination of uncertainty and potential for negative consequences. Total Project Life Span Time Major Phase 1 Major Phase 2 Major Phase 3 Major Phase 4 Conceive (C) Develop (D) Execute (E) Finish (F) Dollar value Increasing risk PLAN PRODUCE Period of highest risk impact Combined risk impact Amount at stake Opportunity and risk Figure 7.2 risk Versus Amount at Stake: the challenge in risk Management Source: R. Max Wideman. (2004). A Management Framework for Project, Program and Portfolio Integration. Victoria, BC, Canada, 2004. Copyright © 2004 by R. Max Wideman, AEW Services Vancouver, BC, Canada: Trafford Publishing. Figure from page 64.

Reproduced with permission of R. Max Wideman.