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Interscience Management Review

Abstract

THE PAPER EMPIRICALLY MEASURES THE INTERPLAY BETWEEN RISK MANAGEMENT AND UNCERTAINTY AND THE CONTEXTUAL VARIABILITY OF RISK MANAGEMENT PRACTICE. THE RESEARCH FIRST CLARIFIES THE CONCEPTS OF UNCERTAINTY, RISK AND RISK MANAGEMENT. THE RESEARCH DEFINES RISK MANAGEMENT FROM AN EMPIRICAL PERSPECTIVE I.E., FROM AN EMPIRICALLY IDENTIFIED SET OF TOOLS THAT IS ACTUALLY USED TO PERFORM RISK MANAGEMENT. THIS TOOLSET IS DERIVED FROM THE RESULTS OF AN ONGOING MAJOR WORLDWIDE SURVEY ON WHAT EXPERIENCED PRACTITIONERS ACTUALLY DO TO MANAGE THEIR PROJECTS. THIS PAPER USES A SAMPLE OF 1,296 RESPONSES FOR WHICH THE INTERPLAY BETWEEN RISK MANAGEMENT AND UNCERTAINTY COULD BE MEASURED. The results are very coherent. They verify and empirically validate many of the propositions drawn from a review of the literature. But results challenge some of the propositions found in the conventional project management literature and some commonly held views. The research shows that the use of risk management practices and tools is negatively related to the degree of project uncertainty. This somewhat counter-intuitive result is consistent with a general tendency for all project management tools and techniques to be used more intensively in better defined contexts. The dominant project management paradigm is oriented towards reducing or controlling uncertainty, but is less well adapted to unforeseeable events and high levels of uncertainty. A better understanding of the reality of the actual practice leads to a discussion about supplementing the current paradigm with new approaches to manage the uncertainty that cannot be removed or reduced by the conventional project management approach.

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