American College of Technology (ACT)

MSc Programme in Project Management

Course Title: Project Risk Management
Instructor: Belay T (PhD)
 Course Objectives
The course deals with the basic concepts of Risk Planning, Identification, Analysis,
Response, Controlling and Mentoring
At the end of this course, students will:
• Explain risk, Project risk and Risk Management
• Discuss the various types of project risk management processes ;
• Explain how risk can impact a project, identify the components of the risk
management plan and risk register and their relationship to the project
management plan as well describe the techniques involved in risk
identification and analysis
• Explain how the probability and impact of risk can be assessed and how
risk events can be prioritized
• Recognize the difference between qualitative risk analysis and quantitative
risk analysis and explain when either or both should be used
• Describe how to make project decisions when outcomes are complex and
are affected by uncertainty
• Explain how risk planning, risk analysis, risk response planning, and risk
monitoring and controlling are related
• Employ the various management responses to positive and negative risks
• Anayize disaster risk management,
 Course contents (Six Chapters)
Chapter One
[Link] to Project risk management
1. 0. Defnining project, Project Mgt
1.1 Defining Risk
1.2 Risk Management
1. 3 Project risk management
1.4 Components of Risk
– 5 Project Selection and Risk
1.6 Project Risk planning processes and elements
1.7 Risk Utility, Risks Preferences and Risk Propensities
– 8 Risk management process .
1.9 Projcet Risk planning
 Chapter Two
2. Identifying Project Risks

[Link] to identify project Risks:

identification tools and techniques
2.2 Sources of Scope Risks
2.3 Sources of Schedule Risks
2.4 Sources of Resources Risks
2.5 Cause-risk-effect Statements
2.6 Project Priority Matr
 Chapter Three
3. Analysing and Evaluating Project Risks
3. 1Qualitative Risk Analysis
•3.1.1 Risk Probability Scales
•3.1.2 Risk Impact Scales
•3.1.3 Risk Assessment Matrix
•3.1.4 Assumptions Testing
•3.1.5 Risk and Cognitive Biases
•3.2 Quantitative Risk Analysis
•3.2.1 Expected Monetary Value (EMV)
•3.2.2 Decision Trees Analysis
•3.2.3 Monte Carlo Simulation
•3.2.4 Scenario Analysis
•3.2.5 Sensitivity Analysis
•3.3 Risk Evaluation
 Chapter Four
[Link] Projcet Risk Response Strategies and
Implement Risk Responses process
4.1 Defining Risk Response &Categories of Common Risks
4.2 Risk Response Planning
4.3 Risk response strategies
4.3.1 Strategies for Negative Risks (Threats)
4.3.2 Strategies for Negative Risks (Threats) Strategies for
Negative Risks (Threats) Strategies for Negative Risks
(Threats) Strategies for Negative Risks (Threats) 4.4 Risk
Management Timeline
 Unit 5
MONTORING AND CONTROLLING PROJECT RISKS
5.1Defining Risk Monitoriand Control ng and Control
5.2 Inputs to Risk Monitoring
5.3 Tools and Techniques for Risk Monitoring & Control
5.4 Output from Risk Monitoring & Control
5.5 Implementing Response Plans
5.6 Metrics for Project Risk Reduction
5.7 Risk register
5.8 Project risk Reviews, trend analysis and risk reassessment
 Unit Six
6. Uncontrollable/ External Risks
6.1 Defining disaster, hazard , dister risks and Disaster Risk
Management
6.2 Disaster risk theories & models
6.3Disaster risk management(DRM) approaches and disaster
risk reduction (DRR)

6.4 : Hazard/disaster risk/vulnerability assessment

6.5 : Managing /governing risk along the supply
chain/value chain
 Evaluation:The method of assessment will consist of the following:

• Individual assignmnets/ project work = 50%

• Final Exam = 50%

9
 Key concepts & terminologies
• Project
• Project Management
• Risk idnetfication
• Risk
• Project risk • Risk analyis
• Projcet riks management • Risk response and mitigation
• Hazard, Disaster, Vulnerability Capacity • Risk control
• Risk register , • Disaster Risk Management
• Disaster Risk , • Disaster Risk Reduction
• Secondary risk ,
• Residual risk
• Resilience /Resilient
• Customer risk • Value chain /supply chain
• Stakeholder risk • Sensitivity Analysis
• Project complexity • Monte Carlo Analysis
• Risk Triggers • Quantitative Risk Analysis
• Risk tolerance
• Qualitative Risk Analysis
• Risk appetite
• Risk category
• Delphi technique
• Decision tree analysis
• Risk Register
• Risk breakdown structure
• Risk Management plan
• Risk Response plan
 Chapter One
[Link] to Project Risk Management
1.0 PROJECT MANAGEMENT
• THE PROJECT MANAGEMENT BODY OF KNOWLEDGE (PMBOK)
• PMBOK recognizes 5 basic process groups and 10 knowledge areas typical of
almost all projects and the 47 (49) process . The basic concepts are applicable to
projects, programs and operations.
 The five basic process groups are:
• Initiating/ identfication
• Planning
• Executing/ implementation
• Monitoring and Controlling
• Closing
 The Ten knowledge areas are:
• Project Integration Management
• Project Scope Management
• Project schedule Management
• Project Cost Management
• Project Quality Management
• Project Resource Management
• Project Communications Management
• Project Risk Management
• Project Procurement Management
 Remarks: What’s New with 5th, 6th and 7th ed of PMI
The Five Projcet mgt process group ,10PMBOK & 47Process
5th Ed of PMI ( 2013)
5 Project mgt process groups ,10 PMBOK & 49Process ( 6th
ed,2017)
PMI( 6th ed 2017) and PMI (7thed ,2021)
 • ኢትዮጲያ ውስጥ ፕሮጀክቶች ለምን ይዘገያሉ?
• ( Dealy as one of a projcet risk …. scope risks ,cost risks, time risks,
technology risks, resource risks, communication risks ,procurement risks )
***************
በሀገራችን በርካታ የልማት ፕሮጅቸቶች በጣም ይዘገያሉ (አንዳንዶቹ ጭራሽ ከመሰረተ
ልማት አያልፉም) እስቲ ፕሮጀክት የሚዘገይበትን ምክንያት እንመልከት (በኢትዮጲያ ለየት
ያሉ ምክንያቶች አሉ)፤
1. ትክክለኛ የአዋጪነት ጥናት አለማድረግ፤
2. ፕሮጅክቶች የሚያርፉበት ቦታ መረጣ ችግር (በተለይ የስኳር ፕሮጅቸቶች)፤
3. በተቋማት መካከል የመናበብ ችግር (መብራት፤ውሃ እና ኤሌክትሪክ ሃይል)፤
4. የተማሩ ሰዎች እጥረት እና የተማረ የሰው ሃይል የማሳተፍ ችግር፤
5. የከፋ ሙስና (ለምሳሌ የህዳሴ ግድብ፤የማዳበሪያ እና የስኳር ፕሮጅቸቶች)፤
6. በጥራት የመስራት ችግር (በህዳሴው ግድብ ላይ የተከሰተው ችግር)፤
7. በተግባር ወቅት የወጥነት ችግር (Formalization Problem)፤
8. የፕሮጀክት ባለቤትነት በግልጽ ያለመታወቅ ችግር፤
9. ፕሮጀክቶች ያለ ፉክክር ለአንድ አካል መስጠት (ሜቴክ)፤
እነዚህ ችግሮች ፕሮጀክቶች መጠናቀቅ ከነበረባቸው ግዜ በላይ በመውሰድ ተጨማሪ ወጪ
እንዲወጣ እና ለፕሮጀክቶች የዋለን የውጪ ብድር በግዜ ያለመክፈል ችግር ይፈጥራሉ፤
 1.1 Defining Risk
• What is risk? What picture comes to your mind when you hear the word
“Risk”? Can you define risk?, How does it influence the success behind a
project?
• Risk is an uncertain event or condition that, if it occurs, has a
positive or negative effect on a project objective.
• Risk is an uncertain event or set of circumstances that, should it
occur, will have an effect on the achievement of the project‘s
objectives.
• Decision-theorists take a similar approach, separating decisions
under risk‘ where the probabilities of different outcomes are known
(or at least knowable) from decisions under uncertainty ‘where
probabilities are unknown (and maybe unknowable). Some
philosophers suggest that as a result uncertainty‘ belongs to the
subjective realm of belief, while risk‘ has an objective component
based in fact or truth. Not all uncertainties are risk
• In other words, R = P x C where, R = Risk, P = probability of
unfavorable outcome, C = consequence of unfavorable outcome
• Risk = f(event, uncertainty, damage)
• Risk = f(hazard, safeguard)
• “A combination of the probability of a defined threat or
opportunity (likelihood) and the magnitude of the
consequences of the occurrence (impact) defines a risk index.

• An undesirable situation or circumstance that has both a

likelihood/ possibility of occurring and a potentially
negative consequence.

• Risk is inevitable in a business organization when

undertaking projects. However, the project manager needs to
ensure that risks are kept to a minimal.

• Risks can be mainly divided between two types, negative

impact risk and positive impact risk, or Internal/
controllable and external /uncontrollable
• Not all the time would project managers be facing negative
impact risks as there are positive impact risks too. Once the
risk has been identified, project managers need to come up
with a mitigation plan or any other solution to counter attack
the risk.
 1.2 Project Risk
• All projects are risky since they are unique undertakings with
varying degrees of complexity that aim to deliver benefits.
• Project risk is an unpredictable event that causes a project to
not go as planned. It is an uncertain event or condition that, if it
occurs, has a positive or negative effect on a project objective.
• Here are the most common examples of project risk:-scope
risks ,cost risks, time risks, technology risks, resource risks,
communication risks ,procurement risks, miscellaneous risks.
• Project Risk is the cumulative effect of the chances of an
uncertain occurrence that will adversely affect project
objectives. Risk Management is a systematic and explicit
approach for identifying, quantifying, and controlling project risk.
• Risk management, as an integral part of project management,
occurs on a daily basis.
• With proactive risk management, we look at projects in a comprehensive
manner and assess and document risks and uncertainty.
 1.3 Project Risk Management
• Project risk management is defined as the intentional, systematic
process of planning for, identifying, analyzing, responding to, monitoring
and controlling project related risks.
• Project Risk management involves people, processes, tools, and
techniques that will contribute, to the greatest extent possible, to
maximizing the probability of successful results.
• Project Risk Management :a process for identifying, communicating, and
managing project risks through all phases of project delivery.
• Project risk management is the art and science of identifying, analyzing,
and responding to risk throughout the life of a project and in the best
interests of meeting project objectives.
• Main processes include:
– Plan risk management
– Identify risks
– Perform qualitative risk analysis
– Perform quantitative risk analysis
– Plan risk response and implement risk responses
– Control risks
Managers can plan their strategy based on five steps of risk management
which prevails in a project/ an organization. Following are the steps to
manage risks effectively in an organization:
 Risk management cont...
 An iterative/ repetative process to identify, assess, reduce, accept,
and control risks in a systematic, proactive, comprehensive and cost
effective manner, taking into account the project/business, costs,
technical, quality and schedule programmatic constraints.
 It is a process to:-
-Identify all relevant risks
-Assess / rank those risks
-Address the risks in order of priority
-Monitor risks & report on their management
 The Risk Management Process consists of a series of steps that,
when undertaken in sequence, enable continual improvement in
decision-making.
 Risk Management is the name given to a logical & systematic
method of identifying, analysing, treating and monitoring the risks
involved in any activity or process.
 Risk management is often overlooked(i.e unnoticed /ignored) in
projects, but it can help improve project success by helping select
good projects, determining project scope, and developing realistic
estimates
 Benefits/ pupose of Risk Management
• Is it necessary to manage project risks? Yes, Absolutely ...why?)
• Identify factors that are likely to impact the project objectives of scope, quality, cost
and time
• Quantify the likely impact of each factor
• Give a baseline(reference) for project non-controllables
• Mitigate impacts by exercising influence over project controllables
• The pmbok also points out that risk management includes maximizing the results of
positive events and minimizing the consequences of adverse events.
• More and better information is available during planning and decision making
• Project objectives are verified
• Improved communications
• Higher probability of project success
• Proactive approach and
• Project might be canceled
 Promotes good management
 May be a legal requirement depending upon industry or sector
 It is important that risks are managed because they could negatively affect key
aspects of the organisation as well as its overall success 21
 To increase predictability and to improve probability of success
• Tips for Success Risk Managmnet
• Involve all levels of staff & management in the process
• Check controls are relevant & effective
• Ensure risk owner takes responsibility for management of
risks under their control
• Focus on risk cause, not its symptoms

• Why Risk Management(RM)may Fail ?

• Limitations of scope
• Lack of top management support
• Did not engage all stakeholders
• Failure to share information
• RM not embedded within planning & management system
 Who uses Risk Management?

Risk Management • Finance and

practices are widely used Investment
in public, NGOs and the
• Insurance
private sectors, covering
a wide range of activities • Health Care
or operations.
• Public
These include: Institutions

• Governments
 1.4 Components and Types of Risk
• What are the Components of Risk
• "Risk consists of three parts: an uncertain events or situation, the
likelihood of occurrence of the situation, and the effect (positive or
negative) that the occurrence would have on project success.
A risk must also be an event. Therefore, terms like cost, schedule
and performance do not meet the definition of risk we use because
they are not events. However, a future event in the program schedule
or a future event that measures system performance could be a risk.
The probability of the future event occurring must be greater than
0% but less than 100%. Future events that have a zero or 100 %
chance of occurrence are not risks.
The impact or consequence of the future event must be unexpected
or unplanned for.
Attitudes to risk, both the organization and stakeholders can be
influenced by a number of factors, which are broadly classified into
three groups. 1. The risk appetite is the uncertainty of an entity that is
willing to take the risk in anticipation of a reward. 2. Risk tolerance is
the degree, amount or volume risk for an organization or an individual
will exhibit resistance. 3. Risk Threshold refers to measures relating to
the impact of risk on the project, stakeholders in this situation may have
an interest.
 Types of projcet risks
• The Differences Between Internal (Controllable) & External (uncontrollable) Risks in
Projects
• As internal risks, example the 9 project mgt Knowledge areas) the following risks were
listed as example :
• Cost Risks: Risks of project costs being exceeded due to inaccurate estimates of costs or
creeping scope changes.
• Schedule Changes: Risks that activities take longer than expected, which in turn usually
leads to cost increases, later benefits and a possible loss of competitiveness.
• Performance or Quality risks: Risks that the project fails to deliver the planned results with
the promised performance and quality. All these risks arise from project execution.
• As external risks, the following examples were listed as example :
• Governance risks: These are related to business management, project support, leadership
and corporate reputation.
• Strategic risks: These result in errors in the strategy definition, e.g. in using a technology
that does not bring the desired success.
• Operational risks: This results from poor implementation and process problems, e.g. in
purchasing, production and sales, but also in protection against theft and fraud.
• Market risks: These include competition risks, currency risks, commodity and interest rate
risks as well as liquidity and credit risks.
• Legal risks: These arise from changes in regulatory requirements, contract risks or patent
risks.
• Environmental risks: Risks related to earthquakes, storms, flooding, vandalism, sabotage,
civil unrest or strikes
Project Risk:
This slide shows schematically how the function of project risk management
is tied into the remaining nine PMBOK management functions. Risk
management should be established as a continuing integrative function
throughout the project’s life cycle

Integration
Communication
Scope
Stakeholders

Project Risk
Time Cost

Quality
Procurement
Human Resources

27
 Matching : individual work / Self assessment quiz
Match

1 Integration A. Defining contracts and choosing a contractor

2 Scope B. Keeping everybody working toward the same goal and dealing with
changes

3 Quality C. Budgeting your project and tackling the money you are spending

4 Cost D. Getting people who will do the work and keeping them motivated

5 Procurement E. An individual, group, or organization who may affect, be affected by, or

perceive itself to be affected by a decision, activity, or outcome of a
project.

6 Time F. Making sure that you build the right product and that you do it as
effectively as possible

7 Stakeholder G. Figuring out who should talk to whom to keep everybody in the loop
about your project

8 Communication H. Estimating the duration a project will take

9 Human Resources I. Defining the work that you will (won’t) do on the project
• Risk exists at two levels within every project.
(i) Individual project risk is an uncertain event or condition that, if it occurs, has a
positive or negative effect on one or more project objectives.
(ii) Overall project risk is the effect of uncertainty on the project as a whole, arising
from all sources of uncertainty including individual risks, representing the exposure
of stakeholders to the implications of variations in project outcome, both positive
and negative.
Project resilience. The existence of emergent risk is becoming clear, with a growing
awareness of so-called unknowable-unknowns. These are risks that can only be
recognized after they have occurred.
Emergent risks can be tackled through developing project resilience. This requires
each project to have:
(i) Right level of budget and schedule contingency for emergent risks, in addition to
a specific risk budget for known risks;
(ii) Flexible project processes that can cope with emergent risk while maintaining
overall direction toward project goals, including strong change management;
(iii)Empowered project team that has clear objectives and that is trusted to get the job
done within agreed upon limits;
(iv)Frequent review of early warning signs to identify emergent risks as early as
possible; and
(v) Clear input from stakeholders to clarify areas where the project scope or strategy
Common Types of Risk in Business ( in some cases for Projcets)

A business risk is a future possibility that may prevent you

from achieving a business goal.
•The risks facing a typical business are broad and include
things that you can control such as your strategy and things
beyond your control such as the global economy.
•There is a strong relationship between risk and reward. It's
generally impossible to achieve business gains without taking
on at least some risk. Therefore, the purpose of risk
management is not to completely eliminate risk.
•In most cases, risk management seeks to optimize the risk-
reward ratio within the bounds of the risk tolerance of your
business.
•Example : The risk-reward ratio measures how much your
potential reward is, for every dollar you risk. For example: If you
have a risk-reward ratio of 1:3, it means you're risking $1 to
potentially make $3. If you have a risk-reward ratio of 1:5, it
means you're risking $1 to potentially make $5
• The following are common types of business risk.
1. Competitive risk: The risk that your competition will gain
advantages over you that prevent you from reaching your goals. For
example, competitors that have a fundamentally cheaper cost base
or a better product.

1. Economic risk: The possibility that conditions in the

economy will increase your costs or reduce your sales.
3 Operational risk: The potential of failures related to the day-to-day
operations of an organization such as a customer service process.
It is the result of insufficient or failed processes. However, operational
processes that are considered to be complete and successful also
generate risk.

4. Legal risk: The chance that new regulations will disrupt your
business or that you will incur expenses and losses due to a legal
dispute

5. Compliance risk: The chance that you will break laws or regulations.
In many cases, a business may fully intend to follow the law but ends
up violating regulations due to oversights or errors.
6. Strategy risk: The risks associated with a particular strategy.
7. Reputational risk: Reputational risk is the chance of losses
due to a declining reputation as a result of practices or
incidents that are perceived as dishonest, disrespectful or
incompetent. The term tends to be used to describe the risk of a
serious loss of confidence in an organization rather than a minor
decline in reputation.
8. Program risk: The risks associated with a particular business
program or portfolio of projects.
9. Innovation risk: Risk that applies to innovative areas of your
business such as product research. Such areas may require
adapting your risk management practices to fast paced and
relatively high risk activities.
10. Country risk: Exposure to the conditions in the countries in
which you operate such as political events and the economy.
11. Quality risk: The potential that you will fail to meet your
quality goals for your products, services and business practices.
•
12. Credit risk: The risk that those who owe you money to fail to pay. For
the majority of businesses this is mostly related to accounts receivable risk.
13. Exchange Rate risk The risk that volatility in foreign exchange rates will
impact the value of business transactions and assets. Many global
businesses have high exposure to a basket of currencies that can add
volatility to financial results such as operating margins.
•
14. Interest Rate risk: The risk that changes to interest rates will disrupt
your business. For example, interest rates may increase your cost of capital
thus impacting your business model and profitability.
•
15. Taxation risk: The potential for new tax laws or interpretations to result
in higher than expected taxation. In some cases, new tax laws can
completely disrupt the business model of an industry.
• 16. Process risk: The business risks associated with a particular process.
Processes tend to be a focus of risk management as reducing risks in core
business processes can often yield cost reductions and improved revenue.
•
16. Resource risk: The chance that you will fail to meet business goals due
to a lack of resources such as financing or the labor of skilled workers.
17. Political risk: The potential for political events and outcomes to
impede your business.
18. Seasonal risk: A business with revenue that's concentrated in a single
19 Health and safety risk is the potential for harm to come to
people as a result of your business activities. In many cases,
the concept is extended to include the general health and
safety of employees independent of work related hazards. For
example, employers may offer medical services or support for
a healthy lifestyle to reduce the risks that employees will
become sick. Eg workers in flower farms of Ethiopia ????

The potential that your business activities will have a negative

effect on human health or wellbeing. Often extended to
include the overall health of employees due to factors outside
the work environment.

A worker is injured on a construction site due to an

equipment failure. An employee suffers a repetitive strain injury
related to their duties. A customer is injured when items fall off
a shelf at a retail location.
 Example Risk and Food safety: Consumers Awareness on their Eight Basic
Rights

 The eight consumer rights are:

• Right to basic needs,

• Right to safety,
• Right to information,
• Right to choose,
• Right to representation,
• Right to redress,
• Right to consumer education, and
• Right to healthy environment.
1. The first right refers to basic needs. This right ensures availability of
basic goods and services to consumers at affordable prices and of good
quality. It includes adequate food, clothing, shelter, health care, education,
public utilities, water and sanitation to lead a decent life.

1. The second right pertains to safety. This right assures consumers to be

protected against marketing of goods which are injurious to health and life.
Consumers are assured that manufacturers of consumer products
undertake extensive safety and performance testing before selling their
products in the market.
2. The third is the right to information. This is the right of consumers to be
protected against dishonest or misleading advertising or labelling and the
right to be given the facts and information needed to make an informed
choice. Consumers have the right to receive adequate information about
products on which to base buying decisions.

1. The fourth is the right to choose. This deals with the right to choose
products and services at competitive prices, with an assurance of
satisfactory quality. Consumers expect a wide array of goods and services
which are offered in the market with diverse brands, sizes, shapes, colors
and with differences in the price, quality and use.
[Link] fifth right refers to representation. The right to representation is also
known as the right to be heard. This is the right to express consumer interest
in the making and execution of government policies that will have an impact on
the supply of goods and services to consumers.
6. The sixth is the right to redress. This is the right of consumers to be
compensated for misrepresentation, shoddy goods or unsatisfactory
services. Under this right, consumers expect defective goods to be replaced or
money refunded by the seller or dealer. Consumers also have the right to seek
legal remedies in the appropriate courts of law.
7The seventh right pertains to consumer education. This is the right to
acquire the knowledge and skills necessary to be an informed consumer.
Consumers may look forward to the three sectors of society: business,
government and consumer would embark on an information campaign through
tri-media on consumer-related issues as well as series of seminars,
conferences, for training and public hearings for the welfare of consumer.
8 The eight right concerns a healthy environment. This right assures
consumers to live and work in an environment which is neither threatening
nor dangerous and which permits a life of dignity and wellbeing.
Consumers expect the government exerting effort regarding the alarming
increase in the degradation of the environment especially on forest, dying
wildlife, depleted land fill space and environmental contamination to prevent
further damage and the constant monitoring of our seas, coral reefs, forest and
waste disposal being committed by factories to check if there is a violation of the
laws on environmental protection.
 Categories of Risks(Cont....)
(I) Financial risk
Reduction in funding
Failure to safeguard assets
Poor cash flow management
Lack of value for money
Fraud / theft
Poor budgeting
(II) Operational risk
•These risks result from failed or inappropriate policies, procedures, systems
or activities e.g.
Failure of an IT system
Poor quality of services delivered
Lack of succession planning
Health & Safety risks
Staff skill levels
No process to track contractual commitments
 (III) Reputational risk
• Organization engages in activities that could threaten it’s good
name
 Through association with other bodies.
 Staff / members acting in a criminal or unethical way
•Poor stakeholder relations
(IV) Governance & Compliance risk
•Lack of oversight by Board
•Segregation of duties not defined formally
•Ensuring compliance with funders terms and conditions
•Compliance with applicable legislation
 Safeguarding of vulnerable individuals
 Taxation Law
 Data Protection
 Health & Safety Law
(v) Residual and Secondary Risks
•It’s also important to identify residual and
secondary risks
•Residual risks are risks that remain after all of
the response strategies have been
implemented..eg?--------
•Secondary risks are a direct result of
implementing a risk [Link]?............
Risk categories
Risk to a project can arise from one of the following four categories
Risk breakdown structure ( RBS 0, 1 ,2
 1.6. Project Selection and Risk

Important types of project risk are best addressed by

project selection because they are outside the scope of
project managers.
Some of the areas of risks during this phase are:-
(i) Business objectives of the project: All projects need to have a
clear business objective and how the project outcome meets the
objective. This helps determine whether the investments required to
execute the project brings value to the business.
(ii) Risk profile of the organization: The other major area of risk
during the project selection phase is the risk profile of the
organization. Risk profile of the organization specifically the key
stakeholders and the executives need to be taken into consideration
while selecting a project and also the mix of projects for execution.
 1. 7 Risk Utility, Risks Preferences and Risk Propensities
• Risk utility or risk tolerance is the amount of satisfaction or
pleasure received from a potential payoff. Each person has a
natural preference towards risk, preference which depends on
one‘s own temperament. By knowing a person‘s preference
towards risk, we can anticipate which choices they are going to
make. And the attitude towards risk can be of three types:
• Risk averse: It shows a conservatory attitude towards risk, with
preference for safe results. Utility rises at a decreasing rate for
people who are risk-averse
• Risk seeking: It shows a liberal attitude towards risk, with
preference for speculative results. Those who are risk-seeking
have a higher tolerance for risk and their satisfaction increases
when more payoff is at stake.
• Risk neutral: It shows an impartial attitude towards risk, with
preference for future results. The risk-neutral approach achieves a
balance between risk and payoff
• በኢኮኖሚክስ እርካታ (Utility) እንዴት ይለካል?
************************
Utility የኢኮኖሚክስ ቃል ሲሆን ከአገልግሎት ወይም ከምርት
የምናገኘው እርካታ ማለት ነው፤ የሸማቾች የእርካታ ደረጃ በቀጥታ
ፍላጎትን እና ዋጋን ተጽኖ ማድረግ ይችላል ምክንያቱም ሸማቾች
ሁልግዜ ከፍተኛ እርካታ የሚያገኙበትን ነጥብ ስለሚፈልጉ፤
•
እርካታ አንድ ሸማች ከተጠቀማቸው ጠቅላላ አገልግሎት ወይም እቃዎች
ላይ የሚሰማውን የእርካታ መጠን ያወዳድራል (መለኪያው ዩቲልስ
ይባላል) ለምሳሌ 4 ቢራ የሚጠጣ ሰው የመጀመሪያው ቢራ የሚሰጠው
እርካታ ከሁለተኛ ከፍ ያለ ነው፤ አምስተኛ ቢራ ቢጨምር ምን አልባት
በብዛት ምክንያት እርካታው ዜሮ ወይም ከዜሮ በታች (ሊሰክር እና
ሊታመም ይችላል) ሊሆን ይችላል፤ በአንዱ ቢራ እና በሌላው ቢራ
መካከል የሚኖረው የእርካታ ልዩነት Law Of Diminishing Marginal
Utility ይባላል፤
• Risk preference refers to the attitude people hold towards risks, which is a key
factor in studies on investors‘ decision-making behavior. Risk preference
commonly refers to the tendency to choose an action that involves higher
variance in potential monetary outcomes, relative to another option with a
lower variance of outcomes.
• . Risk propensity (RP) is a feature characterized by an increased probability
of engaging in behaviors that have some potential danger or harm but also
provide an opportunity for some benefit. የአደጋ ስጋት ተጋላጭነት
 1.8 Risk management process (RMP)
All risk management processes follow the same basic steps, although sometimes
different jargon is used to describe these steps. Together these 5/6/7 risk management
process steps combine to deliver a simple and effective risk management process.
Steps of the Risk Management Process

The Risk Management process steps are a generic guide for any organisation,
regardless of the type of business, activity or function

Step 1. Communicate and consult.

Step 2. Establish the context.
Step 3. Identify the risks.
Step 4. Analyze the risks.
Step 5. Evaluate the risks.
Step 6. Treat the risks.
Step 7. Monitor and review

Dig a well before you are thirsty

A Chinese proverb
Developing a risk management process

A suggested approach for developing a risk management

process is to:-
• Make a board commitment to risk management and appoint
one member responsible for the process.
• Identify key people to be involved in the process (stakeholders,
coaches, instructors, treasurer, staff, event coordinator, etc.).
• Set up a committee to undertake the risk management process
and report to the board regularly.
• Communicate your risk management strategies to everyone in
your organisation.
• Monitor and review your risk management plan regularly and at
the board level.
• The project risk management process (see Figures above slides ) is
not difficult. A full project risk management effort includes these processes:
1. Risk Management Planning – Deciding how to approach, plan, and
execute the risk management activities for a project.
2. Risk Identification – Determining which risks might affect the project and
documenting their characteristics.
3. Qualitative Risk Analysis – Prioritizing risks for subsequent further
analysis or action by assessing and combining their probability of
occurrence and impact.
4. Quantitative Risk Analysis – Analyzing probabilistically the effect of
identified risks on overall project objectives.
5. Risk Response – Developing options and actions to enhance
opportunities and to reduce threats to project objectives.
6. Risk Monitoring – Tracking identified risks, monitoring residual risks,
identifying new risks, executing risk response plans, and evaluating
their effectiveness throughout the project life cycle.
• At its foundation, project risk management involves asking and answering a few
simple questions:
• What risks might negatively (threats) or positively (opportunities) affect
achieving the project objectives? (Risk identification)
• Which of these are most important? (Qualitative risk analysis)
• How could these affect the overall outcome of the project in probabilistic terms
of cost and schedule? (Quantitative& risk analysis)
• What can be done about it? (Risk response)
• Having taken action, how did the
responses effect change,
and where is the project now?
(Risk monitoring)
• Who needs to know about this?
(Communication)
[Link] Risk Management ([Link] step of Risk Management
• Plan Risk Management is the process of defining how to conduct risk
management activities for a project.
• The key benefit of this process is that it ensures that the degree, type,
and visibility of risk management are proportionate to both risks and the
importance of the project to the organization and other stakeholders.
• This process is performed once or at predefined points in the project. The
inputs, tools and techniques, and outputs of the process are depicted
in Figure below depicts the data flow diagram for the process.
 Project risk planning processes and elements
• Risk Management Planning is defined as the process of deciding
how to best prepare for and conduct the risk management activities
for a project to ensure its most successful completion.
• Planning of risk management processes is important to ensure
that the level, type, and visibility of risk management are suitable
with both the risk and importance of the project to the organization;
to provide sufficient resources and time for risk management
activities; and to establish an agreed-upon basis for evaluating
risks.
• The Risk Management Planning process should be completed
early during project planning, since it is crucial to successfully
performing the other processes.
• The risk management plan includes these elements and guidelines:
• Develop and document an organized, comprehensive & interactive risk management
strategy.
• Determine the methods to be used to execute a risk management strategy.
• Plan for adequate resources.
• List of possible risk sources and categories
• Impact and probability matrix
• Risk reduction and action plan
• Contingency plan
• Risk threshold and metrics
• The main contents of a Risk Management Plan(PMP) are as follows:
(i)Project description: Only required if it is a stand-alone document and not part of the
PMP; Types of risks. Political, technical, financial, environmental, security, safety,
programme etc.;
(ii) Risk processes: Qualitative and/or quantitative methods, max. nos of risks to be listed;
(iii) Tools and techniques: Risk identification methods, size of P-I matrix, computer
analysis etc.;
(iv) Risk reports: Updating periods of Risk Register, exception reports, change reports
etc.;
(v) Attachments: Important project requirements, dangers, exceptional problems etc.
• The risk management plan is integrated into the project plan. It
elaborates on the two W’s and two H’s of risk management.
• What risk will be managed?
• Who will manage the risk?
• How will the risk be managed?
• How much will be spent on managing the risk?
• Topics addressed in a risk management includes:
• Methodology
• Roles and responsibilities
• Budget and schedule
• Risk categories
• Risk probability and impact
• Revised stakeholders’ tolerances
• Tracking
• Risk documentation 56
 Unit Two
2 Project Risk Identification
• 2.1 Risk Identification(RI)
• Risk identification is defined as the process of identifying any and all potential
risks that might affect a project and documenting their characteristics.
• Risk identification determines what might happen that could affect the
objectives of the project, and how those things might happen.
• The risk identification process must be comprehensive, as risks that have not
been identified cannot be assessed, and their emergence at a later time may
threaten the success of the project and cause unpleasant surprises.
• The process should be structured using the key elements to examine risks
systematically, in each area of the project to be addressed. A number of tools
and techniques can be used for risk identification.
• Identify Risks is the process of identifying individual project
risks as well as sources of overall project risk, and
documenting their characteristics.
• The key benefit of this process is the documentation of
existing individual project risks and the sources of overall
project risk.
• It also brings together information so the project team can
respond appropriately to identified risks.
• This process is performed throughout the project.
• The inputs, tools and techniques, and outputs of the process
are depicted in Figure below ( next slide) depicts the data
flow diagram for the process.
 2.2 Who will be participated in identifying project risks?
• Participants in activities to identify risks include:
project manager, project team members, team
management risk (if assigned), customers, and
experts from outside the project team, end users,
other project managers, stakeholders, and risk
management experts.
• Risk identification is a complex process because
new risks may evolve or become known project that
arose.
• The aim of risk identification is to identify possible
risks that may affect, either negatively or positively,
the objectives of the project and the activity under
analysis.
• Answering the following questions identifies the risk:

• Identify the risk issues :– (Wh Questions)

• Why is sales down?
• Why is market share down?
• What is the reason behind employee turnover?
• Why is our new product recently introduced not doing well?
What are the reasons behind all the budget variances?
• Are we charging the right price for products and services?
• Are our cost centers and revenue centers functioning according
to their set objectives? Should we make investment in a new
technology? Why? Why not?
2.3 Inputs, tools and outputs for identifying risk
Inputs
•Risk management plan
• Project scope statement
•Cost management plan
• Schedule management plan
• Human resource management plan
•Scope baseline
• Activity cost estimates
•Activity duration estimates
Stakeholder register Project documents
Procurement documents Communication management plan
Enterprise environmental factor Organizational process assets
Perform qualitative risk analysis
Perform quantitative risk analysis
Plan risk responses Monitor and control risks
• Tools and techniques for Risk identification include:
– Brainstorming
– The Delphi Technique
– Interviewing
– SWOT analysis
– Risk breakdown structure
 There are still other many tools and techniques for
identifying the risks associated with projects. These
include:
o Examination of local or overseas experience with similar
activities and projects, including analysis of post-project
completion reports and audits;
o checklists;
o Focus group discussions;(maximum 12 people)
o Scenario/situation analyses;
o Surveys and questionnaire
(I) Brainstorming
• is a technique by which a group attempts to generate ideas or find a
solution for a specific problem by build-up ideas spontaneously and
without judgment
• An experienced facilitator should run the brainstorming session
• Be careful not to overuse or misuse brainstorming.
– Psychology literature shows that individuals produce a greater
number of ideas working alone than they do through brainstorming
in small, face-to-face groups
– Group effects often inhibit idea generation

(II) Delphi Technique

• The Delphi Technique is used to derive a consensus among a panel

of experts who make predictions about future developments/
phenonomen

• Provides independent and anonymous input regarding future events

• Uses repeated rounds of questioning and written responses and avoids

the biasing effects possible in oral methods.
64
 (III) Interviewing
•Interviewing is a fact-finding technique for collecting
information in face-to-face, phone, e-mail,
•Interviewing people with similar project experience is an
important tool for identifying potential risks

(iv) SWOT analysis

•SWOT analysis (strengths, weaknesses, opportunities, and
threats) can also be used during risk identification
•Helps identify the broad negative and positive risks that apply
to a project
(V)Risk Breakdown Structure
•A risk breakdown structure is a hierarchy of potential risk categories for a
project
•Similar to a work breakdown structure but used to identify and categorize
risks
65
 Risk identification tool( Trend Anayisis )

Historical Review Project Creativity Technique

Prese Futu
Past
nt re

The output of the process will be a Risk register

Adapted from PMI’s Practice Standard for Project Risk Management
• The typical project risk categories include triple constraint (i)Scope (ii)
Schedule, and (iii) Resources.
(A)Scope risk
• product scope includes the features and functions of the products, services,
and results. And project scope is the work required to create the deliverables.
" Scope risks are uncertain events or conditions that are related to the project
scope.
• Scope Risk Examples: Scope tends to be a vague concept. eg…
Individuals may add features to the product that were not approved.
The project team may not identify all the deliverables, requiring changes later.
Scope changes may not be processed through the change control process.
Requirements may not be properly analyzed and understood.
Requirements may not be properly prioritized.
Traceability structure may not be developed resulting in requirements not
being managed through the design, development, and testing processes.
The project team may fail to identify all the activities required to create the
deliverables.
Project complexity (interfaces, algorithmic assessments, technical or
architecture analysis) and Volume of anticipated changes.
B. Schedule risk
•Schedule risk is the likelihood of failing to meet schedule plans and the effect of
that failure.
•It exists in every schedule and is impossible to predict, with complete confidence,
the length of time necessary to complete an activity, meet a milestone, or deliver a
system.
•Schedule risks are the most numerous in the project experience risk information
database, representing well over a third of the records. They fall into three
categories: delays, dependencies, and estimates.
•How can you avoid schedule risk in project management?
•(i) Reduce the number of Critical Paths
•(ii) Reduce Activity Dependencies
•(iii) Schedule Risky Activities Earlier
•(iv) Plan Regular Schedule Reviews
C)Resource risk
• A resource risk is the chance that you will fail to meet a goal due to a lack of
resources.
•Resources can include financing, time, skilled workers and anything else you need to
achieve a particular goal.
•Project resource risks are usually most severe for activities that are most likely to
impact the project schedule—activities
•Categories of resource risk :
•Staff leaving the project permanently
•Staff leaving the project temporarily
•Staff joining the project late
•Queuing issues involving people not dedicated to the project
•Resource shortfalls
•Training isn't available and inadequate
•Resources are inexperienced
•Lack of commitment from functional managers
• Main three project elements: The ultimate success of any project
is usually determined by meeting the expectations of the customer
(whether external or internal) and/or upper management in terms
of cost (budget), time (schedule), and performance (scope).
• The interrelationships between these three project elements are
often different for the various project‘s stakeholders and can even
create tensions and conflicts.
 2.4 Cause-Risk-Effect Statements
• Every risk has a root cause. In the case of projects, the risk root cause will originate
from one or more of three sources: Process, People or Product.
• The majority of risks that are causing a project to fail are associated with Process
and/or People root causes.

• It is crucial during the Indentify face to register identified risks with the Cause-Risk-
Effect format in order to show that you have clearly understood them.

• Effects are unplanned variations from project objectives, either positive or negative,
which would arise as a result of risks occurring. Examples include being early for a
milestone, exceeding the authorised budget, or failing to meet contractually agreed
performance targets.
Situation Cause Risk Effect
/process

Lack of As a result of the delays which would lead to the project

Resources allocated resources not completing completion date being endangered
having the required project tasks and the quality of the deliverables
skill sets, may occur, being compromised.
Risk
Id
Identification Example
Risk Description Event Date

1 Performance issues due to redesign of batch (splitting into 4 concurrent jobs) are not handled before Sep-10
the cycle testing begins in September
2 Server performance issues are not handled before the cycle testing begins in September Sep-10
3 Unanticipated table changes occur after the coding has been completed in August Aug-10
4 The testing environment chosen could interfere with other high priority projects Sep-10
5 Priority to implement non-rating mod may go up due to NJ coming up right after IOWA. Aug-10
6 Impact Analysis brings up something that we are not thinking of now (on both mainframe and PARIS Jun-10
sides), that may result in pushing the project dates
7 Coding may take longer than expected Jul-10
8 Finding too many differences between SBR and Mainframe rating of a policy during Integration Aug-10
Testing may longer to complete, pushing the dates for cycle testing and the project.
9 Daily business functions could be interrupted for Production Problems - taking the resources away Anytime
from this project Ex: HSM, GA Home/ROP, Claims Splitting, RCT Changes
10 Other new product (MA Auto, NJ Auto, Company8, Chrome Expansion) - Taking resources away from Anytime
this project
11 System upgrades (Rating Engine 4.0, end of VB6…) may be pushed on us right in the middle of this Jun-10
project

Generic risks are actually issues, they normally need a different action plan
 Unit Three
3 Project Risk Analysis and Evaluation
3.1 Risk assessment
•Risk assessment is the combined effort of: identifying and analyzing
potential events that may negatively impact individuals, assets, and/or the
environment; and making judgments "on the tolerability of the risk on the
basis of a risk analysis" while considering influencing factor.
•Risk assessment focuses on the risks that both internal and external threats
pose to your data availability, confidentiality, and integrity.
•To assess risks thoroughly, you have to spot all the possible events that can
negatively impact your data ecosystem and data environment.
•Risk assessments should follow five simple steps:
•Step 1: Identify the hazards (natural or human )
• Step 2: Decide who might be harmed and how
•Step 3: Evaluate the risks and decide on precautions
•Step 4: Record your findings and implement them
•Step 5: Review your assessment and update if necessary
• How to utilize risk analysis in prioritizing risks? All security
risks are not equal. Something may have an impact but low
potential.
• High Priority: A high risk-high impact scenario, for instance, would
undeniably be a zero-day attack(የዜሮ-ቀን ጥቃት), whereby hackers
spot a way of exploiting a previously unidentified weakness.
• A zero-day attack (also referred to as Day Zero) is an attack that exploits a potentially
serious software security weakness that the developer may be unaware of. The software
developer must rush to resolve the weakness as soon as it is discovered in order to limit the
threat to software user
• Medium Priority: An example of a medium-risk occurrence can be a
former worker stealing information after being terminated from
work. While most employees just go from one occupation to the next,
others may be disgruntled.
• Low Priority: Low-risk cases include somebody breaking into your
company offices and stealing various devices. The possibility of this
event happening is low. Also, the possibility of data loss is low,
especially if the devices do not have any stored information on them.
Example for Definition of Probability
and Impacts
 The ten steps to risk assessment
The ten steps to risk assessment and developing a risk
management action plan are as follows:
•1. Make a commitment as an organisation to risk
management.
•2. Identify all possible material threats and risks.
•3. Assess the level of each risk.
•4. Decide to accept, treat or transfer each risk.
•5. Determine treatment options for all unacceptable risks.
•6. Formalise your risk management action plan.
•7. Implement your treatment options.
•8. Communicate information to everyone affected.
•9. Review your risk management action plan on a
periodical basis (at least quarterly) or sooner if a major
issue arises in your organisation’s operations.
•10. Identify any new risks and update your plan.
3.2 Risk analysis
• Risk analysis involves examining how project outcomes
and objectives might change due to the impact of the risk
event.
•Once the risks are identified, they are analysed to identify
the qualitative and quantitative impact of the risk on the
project so that appropriate steps can be taken to mitigate
them .
•Risk analysis is the process that figures out how likely that
a risk will arise in a project. It studies uncertainty and how it
would impact the project in terms of schedule, quality and
costs if in fact it was to show up.
•Two ways to analyze risk is quantitative and qualitative. But
it‘s important to know that risk analysis is not an exact
science, it‘s more like an art.
 How likely is the risk event to happen? (probability and frequency?)
 What would be the impact, cost or consequences of that event
occurring? (economic, political, social?). Once risks are identified you
determine the likelihood and consequence of each risk. You develop
an understanding of the nature of the risk and its potential to affect
project goals and objectives. This information is also input to your
Project Risk Register.
• Probability and Impact
Therefore, Overall exposure(risk) = probability X impact

• A. Qualitative Risk Analysis

• Assess the likelihood and impact of identified risks to determine their

magnitude and priority. How to Perform a Qualitative Risk Analysis?

Once you’ve got a list of risks, you’ll need to get a good idea of
the probability and impact of each risk. Remember the
probability and impact guidelines in the Risk Management plan?
This is where you use them to assign a probability and impact
to each risk! Perform Qualitative Risk Analysis helps you
prioritize each risk and figure out its probability and impact.
• There are several ways to perform a qualitative risk analysis.
• These techniques require varying degrees of discipline and time.
• For small projects, project managers can use what we call the KISS (Keep It Super
Simple) Method. This one-dimensional technique involves rating risks as:
Very Low, Low, Medium, High, Very High
• Rather, a more common method is the probability/impact matrix. This two-
dimensional technique is used to rate probability and impact.
• Probability is the likelihood that a risk will occur.
• The impact is the consequence or effect of the risk, normally associated with the
project objectives such as schedule, cost, scope, and quality.
• Rate probability and impact on a scale such as 1 to 5 where 5 is the highest
probability and impact. Then we multiply probability times the impact to
calculate our risk score.
• For example, we could rate a risk as a probability of 4 and an impact of 3. The
risk score would be 4 x 3 = 12.
• The scale may be applied to both threats and opportunities. Higher risk scores
for threats indicate negative impacts such as adverse impacts on the schedule or
budget. And higher risk scores for opportunities indicate positive impacts such
as a reduction in the schedule or budget.
• Risk quantification tools and techniques include: (i) Probability/impact
matrixes (ii) The Top Ten Risk Item Tracking (iii) Expert judgment
Qualitative Analysis Example
Id Risk Description Event Date Probability Impact

1 Performance issues due to redesign of batch (splitting into 4 concurrent Sep-10 High Medium
jobs) are not handled before the cycle testing begins
2 Server performance issues are not handled before the cycle testing begins in Sep-10 Low Medium
September
3 Unanticipated table changes occur after the coding has been completed in Aug-10 Low Low
August
4 The testing environment chosen could interfere with other high priority Sep-10 Low Medium
projects
5 Priority to implement non-rating mod may go up due to NJ coming up Aug-10 Medium High
right after IOWA.
6 Impact Analysis brings up something that we are not thinking of now (on both Jun-10 Medium Medium
mainframe and PARIS sides), that may push the project dates
7 Coding may take longer than expected Jul-10 High Medium
8 Finding too many differences between SBR and Mainframe rating of a policy Aug-10 Medium Medium
may push the dates for cycle testing and the project.
9 Daily business functions could be interrupted for Production Problems - Anytime Medium Medium
taking the resources away from this project
10 Other new product (MA Auto, NJ Auto, Company8, Chrome Expansion) - Anytime High High
Taking resources away from this project
11 System upgrades (Rating Engine 4.0, end of VB6…) may be pushed on us Jun-10 Low Medium
right in the middle of this project
Quantitative Analysis Example
Id Risk Description Event Probabili Impact Magnit
Date ty (days) ude
1 Performance issues due to redesign of batch (splitting into Sep-10 H 70% M 15 10.5
4 concurrent jobs) are not handled before the cycle testing
2 begins
Server performance issues are not handled before the cycle Sep-10 L 10% M 10 1
testing begins in September
3 Unanticipated table changes occur after the coding has been Aug-10 L 10% L 5 0.5
completed in August
4 The testing environment chosen could interfere with other high Sep-10 L 10% M 10 1
priority projects
5 Priority to implement non-rating mod may go up due to NJ Aug-10 M 25% H 40 10
coming up right after IOWA.
6 Impact Analysis brings up something that we are not thinking of Jun-10 M 25% M 15 3.75
now (on both mainframe and PARIS sides), that may push the
7 project
Codingdates
may take longer than expected Jul-10 H 50% M 20 10
8 Finding too many differences between SBR and Mainframe Aug-10 M 30% M 15 4.5
rating of a policy may push the dates for cycle testing and the
project.
9 Daily business functions could be interrupted for Production Anytime M 30% M 10 3
Problems - taking the resources away from this project
10 Other new product (MA Auto, NJ Auto, Company8, Chrome Anytim H 70% H 45 31.5
Expansion) - Taking resources away from this project e

11 System upgrades (Rating Engine 4.0, end of VB6…) may be Jun-10 L 20% M 20 4
pushed on us right in the middle of this project
11 Total Risk Magnitude for the Project 79.75
 Risk Quantification
• Risks can be evaluated based on quantity.
• Project managers need to analyze the likely
chances of a risk occurring with the help of a matrix. Critical
Probability 4 Medium

2 Low High

1 2 3 4

Impact

• Using the matrix, the project manager can categorize the risk into four
categories as Low, Medium, High and Critical.
• The probability of occurrence and the impact on the project are the two
parameters used for placing the risk in the matrix categories.
• As an example, if a risk occurrence is low probability = 2 and it has the
highest impact = 4, the risk can be categorized as 'High'.
• The core concept of risk is that it is the probability of occurrence of an
unfavorable outcome and the consequence of that outcome.
• In other words, R = P x C
• where, R = Risk, P = probability of unfavorable outcome, C = consequence
of unfavorable outcome
 Probability/Impact Matrix
A probability/impact matrix or chart lists the relative probability of a risk
occurring on one side of a matrix or axis on a chart and the relative impact
of the risk occurring on the other
List the risks and then label each one as high, medium, or low in terms of
its probability of occurrence and its impact if it did occur
Can also calculate risk factors:
– Numbers that represent the overall risk of specific events based on their
probability of occurring and the consequences to the project if they do
occur
The corners of the chart have these characteristics:
 Low impact/low probability – Risks in the bottom left corner are low
level, and you can often ignore them.
 Low impact/high probability – Risks in the top left corner are of
moderate importance – if these things happen, you can cope with them
and move on.
 High impact/low probability – Risks in the bottom right corner are of
high importance if they do occur, but they're very unlikely to happen.
 High impact/high probability – Risks towards the top right corner are of
critical importance. These are your top priorities, and are risks that you
 Sample Probability/Impact Matrix

Bottom-left corner: In this spot, write down risks with low probability and low impact.
Top-left corner: This spot denotes any risks that have a high probability of occurring but low i
impact.
Bottom-right corner: Any risk in this corner would have a high impact, but there is a low probability
that it will occur. 85
Top-right corner: Any risk you put in this corner has both a high probability and high impact.
Chart Showing High-, Medium-, and Low-Risk Technologies

86
  Top Ten Risk Item Tracking

• Top ten risk item tracking is a qualitative risk

analysis tool that helps to identify risks and maintain
an awareness of risks throughout the life of a project.

• Establish a periodic review of the top ten project risk

items.

• List the current ranking, previous ranking, number of

times the risk appears on the list over a period of
time, and a summary of progress made in resolving
the risk item.
88
Example of Top Ten Risk Item Tracking

89
 B. Quantitative Risk Analysis
• By the time you get here, you’ve got a list of risks, with a probability and impact
assigned to each. That’s a great starting point, but sometimes you need more
information if you want to make good decisions… You can make better decisions
with more precise information. That’s what this process is about—assigning
numerical values for the probability and impact of each risk

• Main tools techniques of Quantitative risk analysis include:

• Quantitative Risk Analysis tools and techniques include but are not limited to:
(i) Three Point Estimate – a technique that uses the optimistic, most likely, and
pessimistic values to determine the best estimate.(see next slide)
(ii) Decision Tree Analysis – a diagram that shows the implications of choosing
one or other alternatives.
(iii) Expected Monetary Value (EMV) – a method used to establish the
contingency reserves for a project budget and schedule.
(iv) Simulation models ( Monte Carlo Analysis) – a technique that uses optimistic,
most likely, and pessimistic estimates to determine the total project cost
and project completion dates. For example, we could estimate the
probability of completing a project at a cost of $20M. Or what is a company
wanted to have an 80% probability of achieving its cost objectives. What
is the cost to achieve 80%?
(V) Sensitivity Analysis – a technique used to determine which risks have the
greatest impact on a project.
• Fault Tree Analysis– the analysis of a structured diagram which identifies
91
elements that can cause system failure.
(i)Three point Estimates for use in triangular distribution
(ii) Decision Trees and Expected Monetary Value (EMV)

• A decision tree is a diagramming analysis technique

used to help select the best course of action in
situations in which future outcomes are uncertain
• Expected monetary value (EMV) is the product of a
risk event probability and the risk event’s monetary
value

• Expected monetary value analysis: The method

considers the probability of each possible outcome
and determines the average value of all outcomes

• You can draw a decision tree to help find the EMV

93
• Decision Trees Example – Building the Decision Tree to Use in Decision Tree
Analysis. In this scenario, you can either:
• Build the new software: To build the new software, the associated cost is
$500,000
• Buy the new software: To buy the new software, the associated cost is
$750,000.
• Stay with the legacy software: If the company decides to stay with the legacy
software, the associated cost is mainly maintenance and will amount to
$100,000.
• Decision Trees Example – Calculating Expected Monetary Value for each Decision Tree
[Link] diagram depicts the decision tree. Now, you can calculate the Expected Monetary Value for
each decision. The Expected Monetary Value associated with each risk is calculated by
multiplying the probability of the risk with the impact. By doing this, we get the following:
Initial setup cost are 500 000, 750 000 &1000000 respectively

I.e. Growth in business mean is the stage where the business reaches the point
for additional option to generate more profit
• Looking at the options listed above, you can start building
the decision trees as shown in the diagram. By looking at this
information, the lobby for staying with the legacy software
would have the strongest case. But, let’s see how it works .

• The Buy the New Software and Build the New Software
options will lead to either a successful deployment or an
unsuccessful one. If the deployment is successful then the
impact is zero, because the risk will not have materialized.
However, if the placement is unsuccessful, then the risk will
materialize and the impact is $2 million.
• The Stay with the Legacy Software option will lead to only
one impact, which is $2 million, because the legacy software is
not currently meeting the needs of the company. Nor, will it
meet the needs should there be growth. In this example, we
have assumed that the company will have growth.

• In this example, Decision Trees analysis will be used to make

the project risk management decision. The next step is to
compute the Expected Monetary Value for each path in the
Decision Trees
• What is the Expected Monetary Value?
• The expected monetary value is how much money you can expect to make
from a certain decision. Steps to Calculate Expected Monetary Value (EMV)
• To calculate the Expected Monetary Value in project risk management, you
need to:
• Assign a probability of occurrence for the risk.(.i.e 40%,5%,100%)
• Assign monetary value of the impact of the risk when it occurs.(i..e $
2,000,000) Multiply Step 1 and Step 2.
• The value you get after performing Step 3 is the Expected Monetary Value. This
value is positive for opportunities (positive risks) and negative for threats
(negative risks). Project risk management requires you to address both types of
project risks

• Build the new software: $ 2,000,000 * 0.4 = $ 800,000

• Buy the new software: $ 2,000,000 * 0.05 = $ 100,000
• Staying with the legacy software: $ 2,000,000 * 1 = $ 2,000,000

• Now, add the setup costs to each Expected Monetary Value:

• Build the new software: $ 500,000 + $ 800,000 = $ 1,300,000
• Buy the new software: $ 750,000 + $ 100,000 = $ 850,000
• Staying with the legacy software: $ 100,000 + $ 2,000,000 = $ 2,100,000

• Now let’s make the decision ?------------------------

• Now let’s make the decision in this Decision Trees
example. This will illustrate the role of Decision Trees in
Project Risk Management.

• Looking at the Expected Monetary Values computed in

this Decision Trees example, you can see that buying the
new software is actually the most cost efficient
option, even though its initial setup cost is the highest.
Staying with the legacy software is by far the most
expensive option.

• When you conduct a SWOT Analysis to determine

whether a business idea is worth pursuing, there is no
quantified data to support your decision. Decision Trees
and Decision tree analysis help you quantify the data,
which is then useful in convincing stakeholders. It is a
critical part in Project Risk Management
• Eg 2: Expected Monetary Value Example for Project Risk Management
• Suppose you are leading a construction project. Weather, cost of construction material,
and labor turmoil are key project risks found in most construction projects:
• Project Risks 1 – Weather: There is a 25 % chance of excessive snow fall that’ll delay the
construction for two weeks which will, in turn, cost the project $80,000.
• Project Risks 2 – Cost of Construction Material: There is a 10 % probability of the price of
construction material dropping, which will save the project $100,000.
• Project Risks 3 – Labor Turmoil: There is a 5 % probability of construction coming to a
halt(stop) if the workers go on strike. The impact would lead to a loss of $150,000. Consider
your industry and geographic area to determine whether this risk would have a higher
probability.
• Next, let's see how to quantify the project risks by calculating the Expected Monetary Value of
each risk.
• Expected Monetary Value Calculation for Project Risk Management
• In this Expected Monetary Value example, we have two negative project risks (Weather and
Labor Turmoil) and a positive project risks (Cost of Construction Material). The Expected
Monetary Value for the project risks:
• Weather: 25/100 * (-$80,000) = – $ 20,000
• Cost of Construction Material: 10/100 * ($100,000) = $ 10,000
• Labor Turmoil: 5/100 * (-$150,000) = – $7,500
• Note: Though the highest impact is caused by the Labor Turmoil project risk, the
Expected Monetary Value is the lowest. This is because the probability of it occurring is
very low.
• This means that if the:
• Weather negative project risks occurs, the project loses
$20,000,
• Cost of Construction Material positive project risks occurs,
the project gains $10,000, and
• Labor Turmoil negative project risks occurs the project loses $
7,500
• The project’s Expected Monetary Value (EMV) based on
these project risks is: -($20,000) + ($10,000) – ($7,500) = –
$17,500
• Therefore, if all risks occur in the construction project, the
project would lose $17,500. In this scenario, the project
manager can add $17,500 to the budget to compensate for
this. This is a simplistic Expected Monetary Value calculation
example. Another technique used to calculate complex
Expected Monetary Value calculations is by conducting
Decision Tree Analysis. This analysis helps while making
complex project risk management decisions
 (iii) Simulation Model: Monte Carlo Analysis
• A project simulation uses a model that translates the uncertainties specified
at a detailed level into their potential impact on objectives at the level of
the total project.
• Project simulations are typically performed using the Monte Carlo technique.
• For a cost risk analysis, a simulation may use the traditional project WBS as
its model. For a schedule risk analysis, the Critical Path Method (CPM)
schedule is used.

• Simulation uses a representation or model of a system to analyze the expected

behavior or performance of the system.

• Monte Carlo analysis simulates a model’s outcome many times to provide a

statistical distribution of the calculated results.

• To use a Monte Carlo simulation, you must have three estimates (most likely,
pessimistic, and optimistic) plus an estimate of the likelihood of the estimate
being between the most likely and optimistic values.

• A large aerospace company used Monte Carlo simulation to help quantify risks
on several advanced-design engineering projects, such as the National
Aerospace Plan (NASP)
 Steps of a Monte Carlo Analysis
1. Assess the range for the variables being considered
2. Determine the probability distribution of each
variable
3. For each variable, select a random value based on
the probability distribution
4. Run a deterministic analysis or one pass through
the model
5. Repeat steps 3 and 4 many times to obtain the
probability distribution of the model’s results

102
Let us try to understand this with the help of an example. Suppose you are managing a project involving
creation of an eLearning module. The creation of the eLearning module comprises of three tasks: writing
content, creating graphics, and integrating the multimedia elements. Based on prior experience or other
expert knowledge, you determine the best case, most-likely, and worst-case estimates for each of these
activities as given below:

Tasks Best-case estimate Most likely estimate Worst-case estimate

Writing content 4 days 6 days 8 days

Creating graphics 5 days 7 days 9 days

Multimedia integration 2 days 4 days 6 days

Total duration 11 days 17 days 23 days

The Monte Carlo simulation randomly selects the input values for the different tasks to generate the
possible outcomes. Let us assume that the simulation is run 500 times. From the above table, we can
see that the project can be completed anywhere between 11 to 23 days. When the Monte Carlo
simulation runs are performed, we can analyse the percentage of times each duration outcome between
11 and 23 is obtained. The following table depicts the outcome of a possible Monte Carlo simulation
 Number of times the simulation Percentage of simulation runs where
Total Project
result was less than or equal to the the result was less than or equal to the
Duration
Total Project Duration Total Project Duration

11 5 1%

12 20 4%

13 75 15%

14 90 18%

15 125 25%

16 140 28%

17 165 33%

18 275 55%

19 440 88%

20 475 95%

21 490 98%

22 495 99%

23 500 100%

This can be shown graphically in the following manner:

What the above table and chart suggest is, for example, that the likelihood of completing the project in
17 days or less is 33%. Similarly, the likelihood of completing the project in 19 days or less is 88%, etc.
Note the importance of verifying the possibility of completing the project in 17 days, as this, according to
the Most Likely estimates, was the time you would expect the project to take. Given the above analysis,
it looks much more likely that the project will end up taking anywhere between 19 – 20 days
 (iv) Sensitivity Analysis
• Sensitivity analysis is a technique used to show the effects of
changing one or more variables on an outcome
 Sensitivity analysis is the quantitative risk assessment of how changes in a specific model
variable impacts the output of the model.
• For example, many people use it to determine what the monthly payments for a
loan will be given different interest rates or periods of the loan, or for determining
break-even points based on different assumptions
• Spreadsheet software, such as Excel, is a common tool for performing sensitivity
analysis
• Sensitivity analysis can be applied in a number of different disciplines, including
business analysis, investing, environmental studies, engineering, physics and
chemistry
• Used to determine which risks have the most potential impact on the project.
Sensitivity analysis examines the extent to which variation of a project element
affects a project objective when all other uncertain elements are held at their
baseline values.
• There are five steps in to the scenario analysis process:
• Step One – Defining the Problem. This seems to always be where things get started in
business.
• Step Two – Gathering Data. ...
• Step Three – Separate Certainties from Uncertainties. ...
• Step Four – Develop Scenarios. ...
• Step Five – Use the Scenarios in Your Planning
106
 Shortfalls when using quantitative risk analysis
• There are three potential shortfalls when using quantitative
risk analysis techniques:
• Data quality: It is essential to avoid the GIGO situation
(garbage in garbage out), and attention must be paid to
ensuring good quality inputs to the model.
• Interpretation: Outputs from risk models require
interpretation, and Quantitative Risk Analysis will not tell the
project manager what decision to make.
• Action: The project team must be prepared to use the results
of risk modelling, and to take decisions based on the
analysis. You should beware of ‗analysis paralysis‘, since
quantitative risk analysis is merely a means to an end, and
must lead to action.
 3.3 Evaluate the risks
• Risk Evaluation is the process used to compare the estimated
risk against the given risk criteria so as to determine the
significance of the risk. Note also that risk evaluation may be
used to assist in the decision to risk treatment.
• Rank the risks according to management priorities, by risk
category and rated by likelihood and possible cost or
consequence. Determine inherent levels of risk.

• Risk evaluation involves comparing the level of risk found during

the analysis process with previously established risk criteria, and
deciding whether these risks require treatment.
• The result of a risk evaluation is a prioritized list of risks that
require further action.

• You evaluate or rank the risk by determining the risk magnitude,

which is the combination of likelihood and consequence. You make
decisions about whether the risk is acceptable or whether it is
serious enough to warrant treatment.
108
These risk rankings are also
added to your Project Risk Register
 Evaluate the risks( cont..
Using Risk Scores to Set Priorities

Here’s where the prioritization comes into play. Consider the following risks:
.
Risk ProbabilityImpact Risk Score

A 2 4 8

B 5 5 25

C 4 5 20

D 3 4 12

E 4 4 16

F 3 3 9

Which risks are greatest? Let’s sort the table in descending order on the risk
score.

Risk ProbabilityImpact Risk Score

B 5 5 25

C 4 5 20

E 4 4 16

D 3 4 12

F 3 3 9

A 2 4 8

109
• Who evaluate risk ?or Who Are Your Risk Owners?
• A risk owner is an individual–typically a subject matter
expert– who is responsible for evaluating the risk,
developing response plans, monitoring the risk, and
executing risk responses when necessary. The risk
owner may engage others in the evaluation process.
• When Should You Perform Qualitative Risk Analysis?
• Project managers should facilitate the risk evaluation
processes early in their projects. Throughout the
project, risk reviews should be conducted. Current
risks are reviewed again and new risks are identified
and analyzed.

110
 Evaluate the risks
After establishing ‘Likelihood’ and
‘Consequence’ you can use a table like this
to set a level of risk.
Extreme Very high Moderate Low Negligible
Almost
Severe Severe High Major Moderate
certain
Likely Severe High Major Significant Moderate
Moderate High Major Significant Moderate Low
Unlikely Major Significant Moderate Low Very low
Rare Significant Moderate Low Very low Very Low

You must define what these risk levels mean to you.

• There are two ways to evaluate risks:
• [Link] Risk Analysis. Qualitative analysis such as rating probability and
impact should always be performed. This allows you to quickly prioritize and rank
your risks.
• [Link] Risk Analysis. Quantitative analysis is not always performed. This
analysis requires more time but provides more data to aid in making decisions.
You cannot respond to all risks, neither should you.
• Prioritization is a way to deal with competing demands. This aids in determining
where you will spend your limited time and effort. You evaluate project risk in
order:
• To have the greatest impact. 80%of the impact will come from 20% of the risks.
• To respond wisely and appropriately..
• To assign resources suitably.
• There are two methods for qualitative risk evaluation:-
• (i) KISS Method I use the KISS (Keep It Super Simple) Method on smaller projects and
with teams that lack maturity in assessing risks. This one-dimensional technique involves
rating risks as: •Very Low •Low •Medium •High • Very High
• (ii) Probability/Impact Method : Most normally use this technique with larger, more
complex projects and with teams that have experience with risk assessments. This two-
dimensional technique is used to rate probability and impact.
 Unit 4 Projcet Risk reposne
4.1 Defining Risk response
All that’s left now is to plan responses to each risk! This is where you decide
whether to avoid, mitigate, transfer, or accept…and how you’ll do it! The goal
of all of the risk planning processes is to produce the risk register. That’s your
main weapon against risk.
•Risk treatment (treatment) (mitigation) is about considering options
for treating risks that were not considered acceptable or tolerable at
chapter Three .
•Risk treatment involves identifying options for treating or controlling
risk, in order to either reduce or eliminate negative consequences, or to
reduce the likelihood of an adverse occurrence. Risk treatment should
also aim to enhance positive outcomes. Risk treatment consists of
determining what will be done in response to the risks that have been
identified, for the purpose of reducing the potential risk exposure.
• Risk treatment is about considering options for treating risks that were not
considered acceptable or tolerable.
• Risk treatment involves identifying options for treating or controlling risk, in order
to either reduce or eliminate negative consequences, or to reduce the likelihood of
an adverse occurrence. Risk treatment should also aim to enhance positive
outcomes.
• This is also referred to as Risk Response Planning. During this step you assess
your highest ranked risks and set out a plan to treat or modify these risks to achieve
acceptable risk levels. How can you minimize the probability of the negative risks
as well as enhancing the opportunities? You create risk mitigation strategies,
preventive plans and contingency plans in this step. And you add the risk
treatment measures for the highest ranking or most serious risks to your Project
Risk Register .
• Options for risk treatment:
Identifies the following options that may assist in the minimization of negative risk
or an increase in the impact of positive risk.
1- Avoid the risk
2- Change the likelihood of the occurrence
3- Change the consequences
4- Share the risk
5- Retain/keep the risk
• When it comes to risk management, it depends on the project manager to choose
strategies that will reduce the risk to minimal. Project managers can choose
between the four risk response strategies, which are outlined below.
(i) Risks can be avoided(ii) Pass on the risk (iii) Take corrective measures to
reduce the impact of risks (iv) Acknowledge
114 the risk
 4.2 Plan Risk Responses
• Plan Risk Responses is the process of developing options and actions to
enhance opportunities and to reduce threats to project objectives.
• The key benefit of this process is that it addresses the risks by their
priority, inserting resources and activities into the budget, schedule and
project management plan as needed.
• The Plan Risk Responses process follows the Perform Quantitative Risk
Analysis process (if used). Each risk response requires an understanding
of the mechanism by which it will address the risk. This is the mechanism
used to analyze if the risk response plan is having the desired effect. It
includes the identification and assignment of one person (an owner for risk
response) to take responsibility for each agreed-to and funded risk
response.
• Risk responses should be appropriate for the significance of the risk,
cost-effective in meeting the challenge, realistic within the project context,
agreed upon by all parties involved, and owned by a responsible person.
Selecting the optimum risk response from several options is often
required.
115
 Plan Risk Responses….
• Strategies for Negative Risks
• Avoid. Risk avoidance is a risk response strategy whereby the project team acts
to eliminate the threat or protect the project from its impact. It usually involves
changing the project management plan to eliminate the threat entirely.
• Transfer. Risk transference is a risk response strategy whereby the project team
shifts the impact of a threat to a third party, together with ownership of the
response. Transferring the risk simply gives another party responsibility for its
management—it does not eliminate it.
• Mitigate. Risk mitigation is a risk response strategy whereby the project team
acts to reduce the probability of occurrence or impact of a risk.
• Accept. Risk acceptance is a risk response strategy whereby the project team
decides to acknowledge the risk and not take any action unless the risk occurs.
This strategy is adopted where it is not possible or cost-effective to address a
specific risk in any other way.
• This step is about deciding whether risks are acceptable or need treatment.
• Risk acceptance
A risk may be accepted for the following reasons:
(i) The cost of treatment far exceeds the benefit, so that acceptance is the only option
(applies particularly to lower ranked risks)(ii) The level of the risk is so low that
specific treatment is not appropriate with available resources, (iii) The
opportunities presented outweigh the threats to such a degree that the risks
justified and (iv) The risk is such that there is no treatment available, for example
the risk that the business may suffer storm damage.
 Plan Risk Responses…
• Strategies for Positive Risks or Opportunities
• Exploit. The exploit strategy may be selected for risks with positive
impacts where the organization wishes to ensure that the opportunity is
realized. This strategy seeks to eliminate the uncertainty associated with
a particular upside risk by ensuring the opportunity definitely happens.
• Enhance. The enhance strategy is used to increase the probability
and/or the positive impacts of an opportunity. Identifying and maximizing
key drivers of these positive-impact risks may increase the probability of
their occurrence.
• Share. Sharing a positive risk involves allocating some or all of the
ownership of the opportunity to a third party who is best able to capture
the opportunity for the benefit of the project.
• Accept. Accepting an opportunity is being willing to take advantage of
the opportunity if it arises, but not actively pursuing it.

118
 Negative risk(threats) Positive risks( Opportunities )
Avoid Exploit
Transfer Share
Mitigate/reduce Enhance
Accept Accept

The choices of response strategies for THREATS include:

AVOID: Focus on eliminating the cause and thus, eliminating the threat.
MITIGATE: There are certain risks that cannot be eliminated. However, their impact
can be reduced. This is termed as mitigation of risks.
TRANSFER: Transfer the risk to some other party. Insurance purchases, warranties,
guarantees, etc are examples of risk transfers

The choices of response strategies for OPPORTUNITIES include:

EXPLOIT: Add work or change the project to make sure the opportunity occurs
ENHANCE: Increase the probability and positive impact of risk events
SHARE: Allocate ownership of opportunity to a third-party

A response strategy for BOTH threats and opportunities:

ACCEPT: Passive acceptance leaves action to be determined as needed, in case of a risk
event
Mitigation Strategies for Technical, Cost, & Schedule Risks

120
 4.3 Implement Risk Responses
• Implement Risk Responses is the process of implementing agreed-upon
risk response plans. The key benefit of this process is that it ensures that
agreed-upon risk responses are executed as planned in order to address
overall project risk exposure, minimize individual project threats, and
maximize individual project opportunities. This process is performed
throughout the project. The inputs, tools and techniques, and outputs of
the process are depicted in Figure below
 Unit Five
[Link] AND CONTROLLING PROJECT RISKS
5.1 Defeining Montoring and Risk control
Control Risks is the process of implementing risk response plans, tracking identified
risks, monitoring residual risks, identifying new risks, and evaluating risk process
effectiveness throughout the project.
The key benefit of this process is that it improves efficiency of the risk approach
throughout the project life cycle to continuously optimize risk responses.
The Control Risks process applies techniques, such as variance and trend analysis,
which require the use of performance information generated during project execution.
Risk monitoring and control is about putting the plans into action and examining the
results of those plans. This involves the following:
Tracking and monitoring identified risks
Responding to risks as they occur
Monitoring residual and secondary risks
Identifying new risks
Evaluating risk response plans that are put into action
Monitoring for risk triggers
Ensuring that risk policies and procedures are followed
Ensuring that risk response plans and contingency plans are appropriate & effective
• Project Risk Register is a useful tool to monitor, track and review risks
• Monitor and review is an essential and integral step in the risk
management process.

• A business owner must monitor risks and review the effectiveness of the
treatment plan, strategies and management system that have been set up to
effectively manage risk..

• Risks need to be monitored periodically to ensure changing

circumstances do not alter the risk priorities. Very few risks will remain
static, therefore the risk management process needs to be regularly
repeated, so that new risks are captured in the process and effectively
managed.

• A risk management plan at a business level should be reviewed at least on

an annual basis. An effective way to ensure that this occurs is to combine
risk planning or risk review with annual business planning.

123
 5.2 Purpose of riks montoring
• The purpose is to determine if:
Risk responses have been implemented as planned.
Risk response actions are as effective as expected or if new
responses should be developed
Project assumptions are still valid.
 Risk exposure has changed from its prior state, with analysis of
trends.
 A risk trigger has occurred.
 Proper policies and procedures are followed.
 New risks have occurred that were not previously identified.
 5.3 Inputs to risk monitoring and control
• [Link] management plan
• [Link] Register: Contains outputs of the other processes:
identified risks & owners, risk responses, triggers and
warning signs
• [Link] Change Requests: Approved changes include
modifications such as to scope, schedule, method of work, or
contract terms. This may often require new risk analysis to
consider impact on existing plan and identifying new risks
and corresponding responses
• [Link] Performance Information: Project status and
performance reports are necessary for risk monitoring and
control of risks.
5.4 Tools and techniques for risk monitoring & control
1. Reassessment Project risk reviews at all team meetings. Major reviews at
major milestones Risk ratings and prioritization may change during the life of
the project. Changes may require additional qualitative or quantitative risk
analysis.
2. Risk audits: Examine and document the effectiveness of the risk response
planning in controlling risk and the effectiveness of the risk owner.
3. Variance and Trend Analysis: Used for monitoring overall project cost &
Schedule performance against a baseline plan. Significant deviations indicate
that updated risk identification and analysis should be performed.
4. Reserve Analysis: As execution progresses, some risk events may happen
with positive or negative impact on cost or schedule contingency reserves.
Reserve analysis compares available reserves with amount of risk remaining at
the time and determines whether reserves are sufficient
5. Status meetings: Risk management can be addressed regularly by including
the subject in project meetings. It refers to discussions with risk‟s owner,
share experience and helping managing the risks.
 5.5 Outputs from Risk monitoring and control
• [Link] Register Updates
• Risk register is updated to include: probability, impact, rank, response, etc..
• utilized on future projects.
• [Link] action: Corrective action consists of performing the contingency plan
or workaround. Workarounds are previously unplanned responses to emerging risks.
• Workarounds must be properly documented and incorporated into the project plan
and risk response plan.
• [Link] Preventive Actions: Used to direct project towards compliance
with the project management plan
• [Link] change requests: Implementing contingency plans or workarounds
frequently results in a requirement to change the project plan to respond to risks.
The result is issuance of a change request that is managed by overall change control.
• [Link] Process Assets Updates: Information gained through the risk
management processes are collected and kept for use by future projects: Templates
for risk management plan, probability-impact matrix, risk register, lessons learned
• [Link] Management Plan Updates: Updates to the project management plan as a
result of approval of requested changes.
5.6 Risk register : What is it? its Components ?, How to report on it ?
A Risk Register is a management tool used to record relevant details
relating to risks.
It is a database of information on risks. Best kept simple to begin with!
•The main output of the risk identification process is a list of identified risks
and other information needed to begin creating a risk register
•A risk register is:
– A document that contains the results of various risk management
processes and that is often displayed in a table or spreadsheet format
– A tool for documenting potential risk events and related information
•Risk events refer to specific, uncertain events that may occur to the
detriment or enhancement of the project
Parts of a Risk Register (Components)
•Risk Description – Clear description of risk, its cause & consequence
•Controls / Actions already in place – List what is actually happening now
which reduces the impact of a risk or its likelihood
•Impact (consequence, cost,)– scale of 1 to 5 (1 = minor, 5 = catastrophic)
(Note this is to be residual impact only)
•Likelihood(probability ) – scale of 1 to 5 (1 = remote, 5 = unavoidable) (Note
this is to be residual likelihood only)
•Weighting – Its Risk Ranking: a calculated figure i.e. impact x likelihood
 Risk Register contents
• An identification number for each risk event
• A rank for each risk event
• The name of each risk event
• A description of each risk event
• The category under which each risk event falls
• The root cause of each risk
• Triggers for each risk; triggers are indicators or symptoms of actual
risk events
• Potential responses to each risk
• The risk owner or person who will own or take responsibility for each
risk
• The probability and impact of each risk occurring.
• The status of each risk

 This document is vital as it provides a huge deal of information.

Risk register will often consists of diagrams to aid the reader as to
the types of risks that are dealt by the organization and the course of
action taken. The risk register should be freely accessible for all the
130
members of the project team.
Sample Risk Register

• No.: R44
• Rank: 1
• Risk: New customer
• Description: We have never done a project for this
organization before and don’t know too much about them. One
of our company’s strengths is building good customer
relationships, which often leads to further projects with that
customer. We might have trouble working with this customer
because they are new to us.
13
1• Category: People risk • Etc.
Summary
Project Risk Management

134
 Chapter six
6. Uncontrollable (External) risks or Disaster Risk
6. 1 Disaster riks managmnet and hazards

6.1.1 Defining Disaster

The term disaster is coined from Latin words dis & astro- ,
which means away from the star or an event to be blamed
on an unfortunate astrological configuration.
In the past, disasters were seen as ‘Acts of God”.
Death is the just punishment for sin (Romans 6:23).
Does God use natural disasters to punish mankind today ?
 Some people believe that God uses natural calamities to
discipline humankind. Others reject that notion. Still others
do not know what to believe.
He is the Creator and as such has the power
and authority to control earth’s natural forces
(Revelation 4:11) . His actions are always in
harmony with his personality, qualities, and
principles.
Eg Protection for obedient worshippers: God gave
Noah detailed instructions regarding the making of
an ark for survival of the Flood. “Noah and those
who were with him in the ark kept on surviving.”
Genesis 7:23.
These perspectives viewed disasters as a divine punishment for moral
misbehavior, rather than a consequence of human misuse of the
environment.
In other words, disasters were accepted as external inevitable events
Until 1950, disaster risk was solely seen as caused by natural hazards
•However, development in science & technology gradually started to
question these perceptions on disasters.
•From 1970, views which recognize the role played by human actions in
exacerbating hazards have emerged.
•But until 1990s most of the approach had over emphasized on extreme
events & humanitarian or emergency response, which was the
dominant strategy in reducing the impact of disasters.
•This neglected the root causes & everyday social processes that
influence vulnerability & looked to see how this could be incorporated
• Since 1990, the contemporary understandings has re-emphasized the
mutual interactions between nature & society
• Before one can therefore focus on the more technical & complex
terms of disaster risk reduction & disaster risk management, one
must have a very clear understanding of what in actual fact
a“disaster” entails. Probably one of the most debated terms in
disaster reduction remains the basic definition of a disaster
• Hence, in contemporary understanding disaster is:

• considered as a function of the characteristics & frequency of

hazards at a specified location,
• the nature of the elements at risk (people, infrastructure, &
economic activities),
• their inherent degree of vulnerability to the hazard &

• their capacity to manage or reduce the hazards’ impact

• The greatest challenges of humanity at the start of
the 21st century are conflict, violence, terrorism, and
war along with their terrible consequences of poverty,
disease, environmental destruction, and poor
leadership.
• Religious fanaticism, insecurity, unemployment,
illiteracy, fear, depression and unhappiness have
been some of the primary causes of terrorist
activities in the world.
• These challenges are present at all levels of human
life—family, school, community, society, and globally.
• UNISDR is the UN office dedicated to disaster risk
reduction..”
. Acc. to UNISDR (2009), a disaster is a result from
the combination of hazard, vulnerability and insufficient capacity
or measures to reduce the potential chances of risk.
• A disaster happens when a hazard impacts on the vulnerable
population and causes damage, casualties and disruption.
• E.g A given hazard – flood, earthquake or cyclone which is a
triggering event along with greater vulnerability (inadequate access
to resources, sick and old people, lack of awareness etc) would lead
to disaster causing greater loss to life and property.
• a serious disruption of the functioning of society, causing
widespread human, material or environmental losses &
impacts
• which exceeds the ability of the affected community to cope
using only its own resources
 DRM cont…
• Therefore, we need to understand the three major
components namely hazard, vulnerability and
capacity with suitable examples to have a basic
understanding of disaster management.

• Hazards are always prevalent, but the hazard becomes

a disaster only when there is greater vulnerability and
less of capacity to cope with it.

• In other words, the frequency or likelihood of a hazard

and the vulnerability of the community increases the risk
of being severely affected.
 6.1.2 The concept of hazards

• A potentially damaging
physical event, phenomenon or
human activity, which may
cause the loss of life or injury,
property damage, social &
economic disruption or
environmental degradation

• Potential cause form harm

• Some examples of hazards are

earthquakes, volcanic eruptions,
cyclones, floods, landslides,
droughts, & other such events.
 Hazards classification
1. Natural Hazards: Natural processes or phenomena occurring in
the biosphere that may constitute a damaging event

• Natural hazards can be classified according to their geological,

hydro-meteorological or biological origins

• Natural hazards comprise phenomena such as earthquakes; volcanic

activity; landslides; tsunamis, tropical cyclones & other severe
storms; tornadoes & high winds; river floods & coastal flooding;
wildfires & associated haze; drought; sand/dust storms; insect
infestations
Classification of hazards cont….
2. Anthropogenic hazards: These are human induced processes or
phenomena occurring in the biosphere that may constitute a damaging event.
•These hazards are the consequences of human activities which may cause
loss of life or injury, damage to property, social & economical disruption or
environmental degradation.
• Examples of human-made hazards mostly include Technological hazards:
such as the toxicity of pesticides to fauna, accidental release of chemicals or
radiation from a nuclear plant. These arise directly as a result of human
activities.
•Disasters have always been a result of human interaction with nature,
technology & other living entities. Sometimes unpredictable & sudden,
sometimes slow & persistent, various types of disasters continually affect the
way in which we live our daily lives. Human beings as innovative creatures
have sought new ways in which to control/limit the devastating effects of
disasters.
 Anthropogenic Hazards Cont…

•Another classification includes quasi-natural hazards that arise

through the interaction of natural processes & human activities.

•Environmental degradation is partly due to processes induced by

human behavior & activities in a way (sometimes combined with
natural hazards)

•ED damages the natural resource base or adversely alters natural

processes or ecosystems. E.g.. desertification
 Natural Hazards Vs. Disasters
• A disaster is the result of the impact of a natural or human
made hazard on a socio-economic system with a given
level of vulnerability, which prevents the affected society
from coping adequately with this impact

• Natural hazards themselves do not necessarily lead to

disasters
• It is only their interaction with people & their
environment that generates impacts, which may reach
disastrous proportions .
• Human social & economic development has further
contributed to creating vulnerability & thus weakening the
ability of humans to cope with disasters & their effects.
 Hazards Vs. Disasters….
•Many scholars have expressed diverse views on what exactly constitutes
a disaster.

•Some link the existence of a disaster to a specific amount of losses

sustained (e.g. number of people killed & injured).

•others judge an event to be a disaster if a certain predefined threshold is

breached

•some judge disasters on their geographical extent & significance with

regard to “normal” conditions,

•while some express a disaster in terms of its monetary value in losses.

For a disaster to be entered into the database, at least one of the

following criteria must be fulfilled:

– 10 or more people reported killed

– 100 or more people reported affected
– declaration of a state of emergency
– call for international assistance
 More hazard terminology….
1. Secondary hazards
•These are hazards that follow as a result of other hazard events

•Examples of secondary hazards are: Building collapse; Dam failure ;

Fire; Hazardous material spill; Interruption of power/ water supply/
communication/ transportation/ waste disposal; Landslide; Tsunami
(tidal wave); Water pollution…

2. Chronic hazards
•A group of hazards that do not stem from one event but arise from
continuos conditions

•Exemples: ., famine, Resource degradation, pollution, & large-scale toxic

contamination, which accumulate over time
 6.1.3. Distribution of common hazards in the
World
• Despite the lethal reputation of earthquakes, epidemics & famine,
natural hazards, are not the greatest threat to humanity,

• a much greater proportion of the world’s population find their lives

shortened by events that often go unnoticed: violent conflict, illnesses,
& hunger (Wisner et al., 2005)

• Wisner et al (2005) distinguish between slow onset & rapid

onset hazard types

• There is a need to connections between the risks people face &

the reasons for their vulnerability to hazards.
Top 10 countries by number of reported events in 2014

Source: Annual Disaster Statistical Review 2014: the numbers & trends
 Hazard types & their contribution to deaths, 1900–1999

Avalanches: a mass of snow, ice, and rocks falling rapidly down

a mountainside.
 Deaths during disasters, listed by cause, 1900–1999

The Great Leap Forward famine in China (1958–1961), & then low estimates put
the number of deaths at 13 million & higher ones at up to 30 million or more
Total number of reported natural disasters between 1900 & 2015

Source: Author’ computation from EM-DAT: OFDA/CRED International

Disaster [Link]
February 11, 2016– UNISDR 2015/16
The human cost of the hottest year on record - climate
change & Drove disasters El Nino worldwide in 2015

– The hottest year on record, 2015, has confirmed that

weather and climate-related disasters now dominate disaster
trends linked to natural hazards, according to a new analysis
presented today.

346 reported disaster

22 773 people died
98.6 million people affected
66.5 USD billion economic damage
The top five most disaster-hit countries in 2015 were China
USA, India , Philippines and Indonesia .
Source: UNISDR 2016
Source: UNISDR 2016
Source: UNISDR 2016
6.1.4 Common Hazards in Ethiopia
Ethiopia has a long recorded history of disasters of both natural and anthropogenic
origin. The common hazards causing disasters include drought, floods, landslides,
civil war, epidemics, and mass displacement.
Drought:
Ethiopia has faced severe drought 15 times since 1965. According to
the Food Security Risk Index for 2010, it is one of 10 countries
considered to be at extreme risk, and is ranked as having the 6th
highest risk out of 163 countries surveyed.

The pastoralist populations of the Afar and Somali Region continue to

be the most acutely food insecure in the country.

A significant proportion of the population in the northeastern

highlands is chronically food insecure.
In addition, people living along the riverbanks of major rivers of the
countries are at chronic risk of food insecurity including in the Awash
Since early 2008, the Ethiopian government has embarked on a process to award
millions of hectares (ha) of land to foreign and national agricultural investors.

According to the Oakland Institute team (2011) research shows that

at least 3,619,509 ha of land have been transferred to investors,
although the actual number may be higher. And most of the land is
transferred for floriculture production.

The Ethiopian government claims that these investments will allow

for much needed foreign currency to enter into the economy and will
contribute to long-term food security through the transfer of
technology to small-scale farmers.

Despite Ethiopia’s endemic poverty and food insecurity, there are no

mechanisms in place to ensure that these investments contribute to
improved food security. What do you say?.....
Our goal is not to alleviate hunger. I am a businessman. What I am doing is positive, cheaper
food, making employment. Can’t understand how that can be negative.” — Foreign investor in
Gambella
Drought..cont..
Droughts are a weather-related
natural hazard, which can affect
vast regions for months or
years
- have a significant impact on a
country’s economic
performance, particularly food
production.
-Contributed about 48.8 % of
Nationally reported losses of
lives (1990-2014)
During the period from 1980 to 2006,
more than 99% of the total drought
fatalities globally were reported in
Africa . For example, the fatalities in
Sudan & Ethiopia in 1983 added up to
450,000. Drought fatalities were the
highest during the period from 1983 to
1985 when droughts occurred in Africa.
 Common Hazards in Ethiopia Cont…

Flooding Flood
is usually the
result of heavy or
continuous rain that
exceeds the absorptive
capacity of the soil & the
flow capacity of rivers,
streams & coastal areas.
Types of Flood :River
flood,
Flash flood, Coastal
flood

-contributed 38.9 % of
NRL 1990-2014
Landslide in Ethiopia
A landslide is the movement of rock, debris or earth down a slope. They result from
the failure of the materials which make up the hill slope and are driven by the force of
gravity. Landslides are known also as landslips, slumps or slope failure

Internal displacement, conflict , ethnic tensions, violence and/ or localized

grievance, political instability in ethiopia

Gedio and West Guji Zone, Jijiga, west Wellega, Shaemene, Gurafereda, Metekel,
Burayu, Ataye, Wolakiyete, Raya, Konso zone, Wolaita [Link] .etc..
 Desert locusts

• Since January 2020, swarms of desert locusts have

damaged over 200.000 hectares of cropland in
Ethiopia. These swarms put high pressure on the
access to food in different regions of Ethiopia. In
April the FAO calculated that a million of people have
been affected and require emergency food
assistance.
 Covid-19 as Biological disaster
Here is few of famous people who died from coronavirus in our country
• ኢትዮጵያ.....

• #በአክቲቪስቱ፦ ተስፋዋን አሟጣ የጨረሰች!

• #በባለስልጣናቱ፦ የተስፋ እቅፍ ውስጥ ያለች!
• #በህዝቡ፦ ወደ አልተለመደ ሁኔታ ውስጥ እየገባች ያለች!
• #ለባለሙያው፡ በኢኮኖሚስቱ ፣በህግ፦ ለትንበያ ፍፁም እየራቀች ያለች!
• በእናተስ???
 6.1.5 Basic concepts in DRM
 A disaster happen only when a hazard meets a vulnerable
situation or people.
 People are vulnerable when they are unable to adequately
anticipate, withstand & recover from hazards.
 Vulnerability refers to the characteristics of a person or a group &
their situation that influence their capacity to anticipate, cope with,
resist & recover from the impact of a hazard.

There are many aspects of vulnerability arising from various

physical, social, economic, & environmental factors

E.g. -poor design & construction of buildings,

-inadequate protection of assets,
-lack of public information & awareness
Basic concepts in DRM …
• Risk: is a combination of the probability of occurrence of events & their
negative consequences.
• “Potential losses” for some particular cause, place & period.
• People do not necessarily share the same perceptions of the significance
& underlying causes of different risks.
• A disaster is a function of the risk process.
• It results from the combination of hazards, conditions of vulnerability &
insufficient capacity or measures to reduce the potential negative
consequences of risk.
• Disaster risk (R) = Vulnerability (V) X Hazard (H)/Capacity (C) .
• What is the difference between a 'hazard' and a 'risk'?
• A hazard is something that can cause harm, e.g. electricity, chemicals,
working up a ladder, noise, a keyboard, stress, etc.
• A risk is the chance, high or low,
that any hazard will actually cause
somebody harm.
Sources of risks and their characteristics

Figure : Risk sources and their characteristics

 How is risk determined?
• There are three essential components in the determination of risk,
each of which should be separately quantified:-

• the hazard occurrence probability: the likelihood of experiencing

any natural or technological hazard at a location or in a region.
• the elements at risk: identifying and making an inventory of people
or buildings or other elements which would be affected by the
hazard if it occurred, and where required estimating their economic
value.
• the vulnerability of the elements at risk: how damaged the
buildings or people or other elements would be if they experienced
some level of Hazard.
Evaluation of risk : how where, how much and howl long exposed
for one can be exposed fro the risk
 Disaster risks
• Definitions of risk are commonly probabilistic in nature, relating
either to:

 (i) the probability of occurrence of a hazard that acts to trigger a

disaster or series of events with an undesirable outcome, or

 (ii) the probability of a disastrous outcome, combining the

probability of the hazard event with a consideration of the likely
consequences of the hazard (Smith, 1996; Stenchion, 1997; Downing et al., 2001;
Brooks, 2003;Jones & Boer, 2003).
• DR also defined as the potential disaster losses, in lives,
health status, livelihoods, assets and services, which could
occur to a particular community or a society over some
specified future time period.
 Disaster risk equation
Disaster Risk = Hazard (H) x Vulnerability (V)
Capacity (C)
OR
Disaster Risk = f(H & V / C)
• For many risks, mitigation can best be handled at the level of the
community because the exposure of the community is greater than that
of the individual, & because protection often requires collective,
sometimes large-scale action.

• In the 20th century the scale of natural disasters (including famine) has
been much greater than that of technological disasters (apart from
wars), both in terms of the total number of casualties & the numbers of
high casualty events.
The Crunch model shows that a disaster happens only if a hazard meets
a vulnerable situation.
A disaster is a result from the combination of hazard, vulnerability
and insufficient capacity or measures to reduce the potential
chances of risk.
 6.1.6 Major Characteristics of Disasters

• There is an important distinction between an event & a disaster. Not all adverse
events trigger disasters;

• There is no such thing ‘natural disaster’ but there are natural hazards.

• Disasters are described by socio-economic & environmental consequences of

adverse events.
• Disasters may be sudden onset or ‘creeping’ in nature.

– Sudden/fast/abrupt onset (disasters triggered by earthquake, volcano,

tsunami, flood, tornado…)
– Creeping/slow/steady onset disasters (disasters triggered by drought,
famine, AIDS epidemic, land degradation…)
 Characteristics Cont…
• Disasters are not always limited to a single hazard. Sometimes two or more
completely independent disasters occur at the same time.

• Disasters can be categorized into international, national & local disasters

based on the scale of response required to manage its adverse consequences.
• Disaster is defined as:
‘a serious disruption of the functioning of society, causing widespread human,
material or environmental losses which exceed the ability of the affected society
to cope using only its own resources’. ISDR, 2002.

• A hazard becomes a disaster risk & then disaster when it coincides with a
vulnerable situation, when societies or communities are unable to cope with it
with their own resources & capacities.
 Characteristics of disasters
Hazard/
Disaster Risks X Vulnerability = Disaster

Crops that
Drought X = Life loss
depend on
rainfall

Flood X Poorly
=
Life & Property
constructed damage
house
 6.1. 2 Disaster/disaster risk theories & models
• Introdcution
• Theory is A set of assumptions, propositions, or accepted facts
that attempts to provide a plausible or rational explanation of cause-and-
effect (causal) relationships among a group of observed phenomenon
• Theory/models: help to enhance our understanding through simplifying
complex and often interrelated phenomena.
• Is a formal set of idea that is intended to explain why some thing happen
or exists.
• Is explanation that results from extensive research, tested & debated over
periods of time
1. The Pressure and release model (PAR model):
2. Capacity Building to Reduce Disaster Risk/The Access model
3. Resilience Theory
4. Normal Accident Theory
5. Chaos theory
 I) The Pressure And Release model (Vulnerability model)

• Pressures: Vulnerable conditions exist because of pressures acting on

individuals and communities. We might not be aware of these pressures and they
are often difficult to challenge.
• ‘Pressures’ are structures and processes that create vulnerable conditions. We
need to identify:
■ who is responsible for creating vulnerable conditions. These can be organisations
(such as local government departments, religious groups or commercial
companies) or individuals (such as a local landowner). These are called the
structures.
■ how structures affect the vulnerable conditions, such as through policies and
practices. These are called the processes.
• PAR is a simple tool for showing how disasters occur when natural hazards
affect vulnerable people
• The basis for the PAR idea is that a disaster is the intersection of two opposing
forces:
I) processes generating vulnerability
II) the natural hazard event (or sometimes a slowly unfolding natural process)
III) The PAR model suggest that the hazard event is isolated and distinct from the
conditions which create vulnerability.
IV) Collaborative learning. What structures create vulnerable conditions in our local area?
V) What processes create vulnerable conditions in our local area?
 Vulnerable conditions
• Some elements are at risk because they are unable to withstand the impact of a
hazard. This vulnerability might be:
■ Economic such as fragile livelihoods; no credit and savings facilities
■ Natural such as dependence on very few natural resources.
■ Constructed such as structural design; location of houses on an unstable slope
■ Individual such as lack of skills or knowledge; lacking opportunity due to
gender; being old or very young; living with HIV or AIDS.
■ Social such as a disorganised or fragmented society; bad leadership.
Example, The spiritual context depends on how we relate to God. It relates to
people’s individual spirituality and to the presence of religious institutions at local
or national level. It influences the way people act and therefore influences
vulnerability to disaster. The church is part of this spiritual context. There are
many ways in which the church can help to reduce vulnerability. However, in
some places, church practices could be increasing vulnerability. For example,
costly marriage or funeral ceremonies could increase economic vulnerability.
■ What is the spiritual context in which we live?
■ How do spiritual beliefs affect people’s attitude to disaster?
■ How do spiritual beliefs affect people’s attitude to other people in times of disaster?
■ Are there any spiritual practices that increase vulnerability?
■ In what ways could the church reduce vulnerability in our community?
 Vulnerability
• Vulnerability may be defined as “The extent to which a community,
structure, services or geographic area is likely to be damaged or disrupted
by the impact of particular hazard, on account of their nature, construction
and proximity to hazardous terrains or a disaster prone area.”
• Vulnerability is the degree to which someone or something can be
affected by a particular hazard and depends on a number of factors
and processes:
 physical (unstable locations, closer proximity to hazards, fragile
unprotected houses).
 economic (no productive assets, limited income earning
opportunities, poor pay, single income revenue, no savings and
insurance).
 social (low status in society, gender relations, fewer decision-
making possibilities, oppressive formal and informal institutional
structures, and political, economic and social hierarchies).
 Vulnerability is not static

Progression of vulnerability

Root Dynamic Unsafe

Hazards pressures conditions Disaster
causes
Root Causes
Dynamic Pressures Unsafe Conditions
Economic How the vulnerability of
Social Processes and activities
population is expressed
Demographic that ‘translate’ effects of
in conjunction with
 Political/ideological root causes temporally
a hazard
processes that affect and spatially into ‘unsafe
allocation, utilization conditions’
- Living in hazardous
& distribution of locations
resources E.g: Rapid urbanization,
The function of the violent conflict, foreign
-Being unable to afford
state and distribution debt and structural
safe buildings
of power adjustment programs,
 Natural conditions rural-urban migration,
- Engaging in dangerous
Disease outbreaks, etc..
livelihoods
 Vulnerability triggering factors
• One needs to consider not just the fact that people live in
flimsy (fragile) houses in hazardous locations (e.g. flood
prone areas),
• but why they live there, which could be the product of such
forces as:-
– Poverty
– Rapid & unplanned urbanization; population growth
– displacement due to economic development
– Environmental degradation
– Climate change
 Cont…
Poverty
Disasters hit poor people the hardest
53% of affected people by disasters
live in developing Countries
Over 95% of the people killed by
disasters lived in middle and low-
income countries,
Extensive research shows the poor
are more likely to occupy dangerous,
less desirable locations,
An estimated 1 billion people
worldwide live in slums and shanty
towns,
which are vulnerable to disasters.
 Poverty
• Poverty is considered as of two types:-
• Relative poverty: as the name indicates, it is relative and it is everywhere in
the world.
• Absolute poverty: a poverty situation where people are not getting the
minimum requirement to live in terms of shelter, food and cloth.
• People with absolute poverty have different characteristics:-
A) Physical weakness like a measurement children weight,height,age…
B) Vulnerability to a continued deterioration
C) Powerlessness/ voiceless in front of other people, government, institutions etc
• The poor can explain the poverty as he/she felt. The world bank tried to assess
how the poor express or feel poverty.
• Different individuals from different countries expressed poverty as follow:-
• Russian poor: define poverty as a daily worries about lack of money
• Bangladesh poor: wellbeing is defined as to have life free of anxiety
• Jamaican poor: define it as lack of self confidence
• Kenyan poor : graphic expression: The poor invited the researcher in to his
rooms and kitchen and shows his roofs, walls, kitchen equipments and said
what you see is poverty.
• Ethiopian poor: define poverty to be skin, to be pale, a situation that makes an
individual older than his age.
 Poverty
• Prof. Mesfin and Desalegn Rahemto did similar analysis
(probably before Sen and missed the Nobel Prize!??
(Desalegn’s “The Peasant & State” as well as his Poverty
Studies in Wello and Welaita are a must; See Prof. Mesfin’s
reference for this in the picture title, next slide)

Mesfin Woldemariam,
political leader,
scholar, human rights
advocate, peace
activist.
የድህነት_አዙሪት?
• #Development_እና_Happiness
በኢኮኖሚ ማደግ እና የዜጎች ደስተኝነት ምን ያገናኛቸዋል?
ለምሳሌ፡- ከፍተኛ የገቢ ደረጃ ላይ የደረሰ አንድ ሰው የሚኖርበት አካባቢ ንጹ ካልሆነ፤ ልጆቹን የሚያስተምርበት ጥሩ
ትምህርት ቤት ከሌለ፤ ከፍሎ የሚታከምበት ጥሩ ሃኪም ቤት ከሌለ፤ ሰው በመሆኑ ብቻ የማይከበር ከሆነ፤ ወንጀል
በመብዛቱ አደጋ ይደርስብኛል ብሎ የሚሰጋ ከሆነ፤ የፈለገውን ሃይማኖት የመከተል መብት ከሌለው፤ በሃይማኖት፤
በፖለቲካ ወይም በዘር ሁኔታው መሸማቀቅ የሚደርስበት ከሆነ፤ በየመንገዱ የተቸገሩ ሰዎችን የሚመለከት ከሆነ፤
የመንግስት ባለስልጣናት ተጽኖ የሚያደርጉበት ከሆነ፤ ወዘተ ይህ ሰው ሃብታም ነው ወይስ ድሃ?
በ21ኛው ክፍለ ዘመን የዜጎችን የኢኮኖሚ እድገት ደረጃ በነፍስ ወከፍ ገቢ ብቻ መለካት ግዜ ያለፈበት ነው፤ ለዚህም
ሲባል በኢኮኖሚ መበልጸግ (Economic Development) መታየት ያለበት ዜጎች ባላቸው የደስተኝነት ልክ ነው የሚሉ
ኢኮኖሚስቶች መብዛት ጀምረዋል በዋናነት Amartya Sen’s እና Richard Layard ደስተኝነት የሰዎችን ጠቅላላ የኑሮ
ሁኔታን ከሚወስኑት ጉዳዮች መካከል አንዱ ነው ይላሉ (Happiness is part of human well-being)፤ ብዙ የጥናት
ግኝቶች እንዳረጋገጡት የዜጎች ጠቅላላ ገቢ ሲጨምር ዜጎች ደስተኝነታቸው አና እርካታቸው በተመሳሳይ መልኩ
እንደሚጨምር ነው፡፡ Richard Layard፡- የዜጎች የደስተኝነት ሁኔታ በ7 ምክንያቶች ተጽኖ ይደርስበታል ይላል
እነሱም የቤተሰብ ሁኔታ፤ የገቢ ሁኔታ፤ የስራ ሁኔታ፤ የማህበረሰብ እና የጓደኞች ሁኔታ፤ የጤና ሁኔታ፤ ነጻነት
እንዲሁም ለራሳችን የምንሰጠው ዋጋ ናቸው፡፡
ለምሳሌ፡- 4 ጓደኛማቾች ቢኖሩ እና ከመካከላቸው ብቸና ገቢ ያለው አንድ ሰው ብቻ ሆኖ በተዝናኑ ቁጥር ምን ያህል
ግዜ እሱ ብቻ ሂሳብ እየከፈለ ይቆያል? ይሄ ጉዳይ በማህበራዊ ግንኙኘቱ ደስተኛ እንዳይሆን ያደርገዋል፤ ስለዚህ
ብቻውን ዘወትር ወጪ ላለማውጣት የጋራ ግንኙነቱን ሊቀንስ ይችላል፤ ነገር ግን ሁሉም በቂ ገቢ ያላቸው ቢሆን
ቶሎ ቶሎ እና ረጅም የመዝናኛ ግዜ እንዲኖራቸው ያስችላል Richard Layard የሚለው ይህንን ነው የጓደኞች ሁኔታ
የሰዎችን የደስተኝነት ደረጃ ይወስናል፡፡
በዓለም ላይ ያሉ ሁሉም ሀገራት መሪዎችም ሆኑ ህዝቦች በምድር ላይ የተሰጣቸው ሃላፊነት የሚከተሉትን የዜጎች
የእድገት ዓላማዎች ማሳካት ነው፤ ጥቂት የስካንድንቪያ(Scandinavia) ሀገራት ሲያሳኩት አሜሪካንን ጨምሮ እጅግ
በጣም ብዙ ሀገራት እስካሁን ማሳካት አልቻሉም! ዓላማዎቹ…..
በቀዳሚነት ዜጎች ለህይወት አስፈላጊ የሆኑ ግብዓቶችን እንዲሟሉላቸው ያስፈልጋል ማለትም ምግብ፤ ውሃ፤ ልብስ፤
ቤት፤ የጤና ሽፋን፤ ጥበቃ ወዘተ፤ ከዚህ ሲያልፍ ብዙ የስራ እድል፤ የተሻለ ትምህርት፤ ባህላቸውን የመጠበቅ
መብት፤ በራሳቸው ነገሮችን የማድረግ ነጻነት (Not being used as a tool by others for their own ends) ፤
የመከበር፤ እውቅና የማግኘት፤ በራስ የመተማመን ሁኔታ፤ እንዲሁም በማህበራዊ እና በኢኮኖሚያዊ ሁኔታዎች
የፈለጉትን አማርጦ የመጠቀም እድል እና ከጥገኝነት የመላቀቅ አቅም እንዲኖራቸው ማድረግ ነው፡
 Cont…
Environmental degradation

Communities can all too often

increase the probability and severity
of disasters by destroying the
forests, coral reefs and wetlands that
might have protected them.
 Cont…

Rapid & unplanned urbanization

An estimated 1 billion people worldwide live

in slums and shanty towns, which are
vulnerable to disasters.

Significant proportion of the urban population

lives in marginal settlements or crowded
slums with inadequate access to clean water,
sanitation, schools, transport and other public
services
Paris, France
 Cont…
Climate change

Increased drought will lead to

land degradation, Crop damage and
reduced yields; livestock deaths and
wildfire risks will increase, and

people dependent on agriculture will

face food and water shortages,
malnutrition and increased disease,
with many being forced
to migrate.
 Cont…
• Legal/political issues, such as
– lack of land rights;
– discrimination;
– government macro-economic and other
policies; and
– other political features, such as the failure of
government and civil society institutions to
protect citizens.
Cause and effect in the Disaster Pressure model
•The most important root causes that give rise to
vulnerability (and which reproduce vulnerability over
time) are economic, demographic and political
processes.
•These affect the allocation & distribution of resources,
among different groups.

•Root causes reflect the exercise and distribution of

power in a society.

•Dynamic pressures are processes and activities that

‘translate’ the effects of root causes both temporally and
spatially into unsafe conditions.
 Conceptual frame-works of vulnerability:
The Double Structure of Vulnerability
Vulnerability: external- and internal side;
External side relates to: exposure to risks and
shocks
PEA:e.g. social inequalities, assets control by upper
classes;
HEP: population dynamics and capacities to
manage the environment
ET: relates vulnerability to the incapacity of people
to obtain or manage assets via legitimate economic
means
Internal side relates to :capacity to anticipate,
cope with, resist and recover from the impact
of a hazard
C&CTh: control of assets and resources, capacities
to manage crisis situations and resolve conflicts ;
ATA: how people act as react freely or as a result of
societal, economical or governmental constraints;
MAA: mitigation of vulnerability via access to assets.

Bohle’s conceptual Framework for

vulnerability analysis.
II) Capacity Building to Reduce Disaster Risk (access Model)
To reduce the risk of disaster, the factors that cause risk should be addressed.
This means working against all the components of the PAR model. Action may
be necessary at local, national and even international levels.
•It is an expanded analysis of the principal factors in the PAR model that relate to
human vulnerability and exposure to physical hazard H D V
•Focuses on the process by which the natural event impacts upon people and their
responses.
•It is a more magnified analysis of how vulnerability is initially generated by
economic, social and political processes, and what then happens as a disaster unfolds.
•The Access model indicates more specifically and in more detail how conditions need
to change to reduce vulnerability and thereby improve protection and the capacity for
recovery.
•Capacity may include physical, institutional, social or economic
means as well as skilled personnel or collective attributes such
as leadership and management.”
•Access model: analysis of the principal factors
 III) Resilience Theory
• Resilience is derived from the Latin word resilio, meaning
‘to jump back’ (Klein et al., 2003).
• ‘Resilience’ was selected the global development
buzzword of 2012 by an aid industry website.
• Defn: the capacity to recover quickly from difficulties; toughness
the ability [of a system] to cope with change
• The term is applied in a number of fields, especially
disaster management
• The adoption of the Hyogo Framework for Action 2005–
2015—also known as ‘The Hyogo Declaration’—by the
United Nations International Strategy for Disaster Risk
Reduction (UNISDR) is a positive move in underscoring
the concept.
• attention is on what affected communities can do for
themselves and how best to strengthen them
 Resilience theory….
• The concept of resilience helps us to obtain a complete
understanding of risk and vulnerability.

• It fills a void by addressing the ‘soft perspective’ of vulnerability

and allows us to rethink the prevalent ‘risk = hazard x
vulnerability’ equation.

Source: Béné/Wood/Newsham/Davis 2012

 Resilience …
• Absorptive capacity: is a firm’s ability to identify, assimilate, transform
and apply valuable external knowledge

• Adaptive capacity: is the capacity of a system (human or natural) to

adapt if the environment where the system exists is changing .It plays a
prominent role in reducing community vulnerability.

• Transformative capacity: is a special form of adaptive capacity that,

when required, enable a community to intentionally initiate
transformative action and /or to navigate their way through an active or
forced transformation. The ability to create a fundamentally new systems
that the shock will no longer have any impact
 …
• When referring to people, the essence of resilience centres on
quick recovery from shock, illness or hardship.

• A person who bounces back—unchanged—from exposure to

stresses and shocks (Vickers & Kouzmin, 2001).

• Disaster resilience is seen as the ‘shield’, ‘shock absorber’ or

buffer that moderates the outcome to ensure benign or small-
scale negative consequences.

• Indeed, the goal of disaster risk management is to guarantee

minimal loss of life and livelihoods and to allow the affected
community or system to return to ‘normal’ within the shortest
possible time.
 Capacity

• Capacity can be defined as “resources, means and

strengths which exist in households and communities and
which enable them to cope with, withstand, prepare for,
prevent, mitigate or quickly recover from a disaster”.

• It is the combination of all the strengths and resources

available within a community, society or organization that can
reduce the level of risk or the effects of disaster.

• It may include physical, institutional, social, or

economic means as well as skilled personal or
collective attributes such as leadership and
management.
 Capacity cont …

• Ability of an affected community to deal with a hazard

• Existing coping mechanisms
• Indigenous knowledge
• Resilience of a community
• Expressed in terms of:
– social (the family),
– political (decision-making ability),
– economical (wealth) and
– environmental (biodiversity, conservation and natural
resource) aspects
 Resilience

• The capacity of a system , community or society potentially

exposed to hazards to adapt by resisting or changing
order to reach and maintain all acceptable level of
functioning and structure.

• This is determined the degree to which the social system is

capable of organizing itself

• to increase its capacity for learning from past

disasters for better future protection and to improve
risk reduction measures.
 Resilience Cont…
• The ability of a person or a group to anticipate, cope with, resist, and
recover from the impact of a hazard/disaster.
• Resilience refers to a person’s or a community’s ability to bounce back
or recover after adversity or hard times, and to be capable of building
positively on these adversities.
• Resiliency often is related to 3 different characteristics:

– The magnitude of the shock that a HH or community can absorb and

remain viable

– The degree to which the HH or community is capable of self

organization after the exposure to the hazard to maintain an acceptable
level of functioning and structure

– The degree to which a HH or community can learn from these difficult

circumstances and adapt
 IV) Normal accident theory
• Living with High-Risk Technologies is a 1984 book by Yale
sociologist Charles Perrow, which provides a detailed analysis of
complex systems conducted from a social sciences perspective. It was
the first to "propose a framework for characterizing complex
technological systems such as air traffic, marine traffic, chemical
plants, dams, and especially nuclear power plants according to their
riskiness".
• Perrow says that multiple and unexpected failures are built into
society's complex and tightly-coupled systems. Such accidents are
unavoidable and cannot be designed around.
• Perrow's argument based on human error, big accidents tend to
escalate(worsen) , and technology is not the problem, the
organizations are. Each of these principles is still relevant today.
• Perrow identifies three conditions that make a system likely to be
susceptible to Normal Accidents. These are:
• The system is complex
• The system is tightly coupled and The system has catastrophic potential
 V) Chaos theory
• Chaos theory is concerned with unpredictable courses of events.
The irregular and unpredictable time evolution of many nonlinear
and complex linear systems has been named chaos.

• Chaos theory describes the qualities of the point at which stability

moves to instability or order moves to disorder.

• Chaos theory, which emerged in the 1970s, has impacted several

aspects of real-life in it’s short life thus far and continues to impact
all sciences.

• The idea that even the slightest change in the starting point can lead
to greatly different results or outcomes.

• Strange attractor: A dynamic kind of equilibrium which represents

some kind of trajectory upon which a system runs from situation to
situation without ever settling down.
6.1. 3 Disaster risk management (DRM) approaches and
Disaster risk Reduction (DRR)

• Disaster risk management can be defined as:

• the range of activities designed to maintain control over
disasters & emergency situations &
• to provide a framework for helping at-risk persons to avoid
or recover from the impact of the disaster.
• It can be further defined as the body of policy &
administrative decisions & operational activities that are
appropriate to the various stages of a disaster at all levels
• It further focuses on the reduction of risk & vulnerability in
communities most at risk.
 Cont’d
• Disaster risk management (DRM) is a continuous,
integrated multi-sectoral, & multidisciplinary process of
planning & implementation of measures aimed at
preventing or reducing the risk of disasters;

• It also involves mitigating the severity or consequences of

disasters; emergency preparedness; & rapid & effective
response to disasters & post-disaster recovery &
rehabilitation.

• Disaster management entails the integration of a multitude

of activities & functions in order to safeguard lives &
property against possible hazards.
 [Link] . DRM in Ethiopia
• For many years, efforts were on post-disaster response, recovery,
& rehabilitation rather than on pre-disaster preparedness &
prevention measures
• In recent years, the Ethiopian disaster management system has
shown a transformation from one of response & recovery to DRM
(mitigation, prevention, preparedness, response, & rehabilitation)
• The policy formulated in 1993 underscored the importance of
integrated actions to mitigate and/or prevent the root causes of
drought disaster to which Ethiopians have repeatedly been
vulnerable
• The following are some of the remarkable measures that have
been taken since 1995 in the efforts to transform DRM approach.
UNDRR approach: Disaster tagging disaggregation
6.1. 3 .2 Paradigm shift in disaster risk management

From To

Managing hazard events Managing disaster risks

Disaster/emergency
Disaster Risk Management
management

Primary focus on Primary focus on reducing

Relief & Response disaster risks & prompt
Sustainable development
 Paradigm shift
Top-down and centralized Bottom-up and
disaster management participatory disaster
risk reduction

Disasters as merely a Disaster mainly a

function of physical reflection of people’s
hazard vulnerability.

Integrated approach to
Focus on disaster genuine social and human
response and anticipation development to reduce
disaster risk
 DRM cont..

Disaster Risk Management is an organised action on:

Pre-disaster or ...’proactive’ Post-disaster or

‘ ‘reactive’
activities
Disaster event
Recovery/
Prevention Mitigation Preparedness
rehabilitation

Relief/response
 [Link] Disaster Risk Reduction (DRR)

•Disaster risk reduction emphasizes a new global thinking in the

management of disasters & disaster risks.
•Disaster risk reduction can be seen as the systematic
development & application of policies, strategies & practices
to:
•minimize vulnerabilities & disaster risks throughout a society;

•to avoid (prevent) or to limit (mitigation & preparedness) adverse

impacts of hazards within the broad context of sustainable
development.
 DRR
• DRR is the conceptual framework of elements considered with the
possibilities to minimize vulnerabilities & disaster risks throughout
the society,
• to avoid (prevention) the adverse impacts of hazardous events
within the broad context of Sustainable Development
• DRR framework is composed of the following fields of actions:
 Risk awareness & assessment (hazard, vulnerability/capacity)
 Knowledge development (education, training, research, &
information)
 Public commitment & institutional frameworks (organizational,
policy, legislation, & community actions)
 Application of measures (environmental management, land use
planning, protection of facilities, application of science &
technology, partnership & networking, & financial instruments)
 DRR Con’t…
•Disaster reduction strategies include:

•disaster risk assessments- combining hazard, vulnerability & capacity

assessments;
•strengthening of institutional capacities & operational abilities
•the assessment of the vulnerability of critical facilities, social &
economic infrastructure,
•the use of effective early warning systems, &
•the application of many different types of scientific strategy & technical
& other abilities
 Why DRR?
• Because incidence of disasters & number of people
affected are increasing!

• Disaster affected 2 billion people in the 1990s, triple of

the number affected in 1970s, climate change is
increasing the incidence of disaster.

• Disasters are costly. The global economic loss caused

by disaster increased from US $138 billion in the 1970s to
US$ 628 billion in the 1990s.

• Disasters increase poverty. In Africa disasters are both

causes & consequences of poverty.

• In Ethiopia during the last 20 years, 78% of rural

households had been hit by harvest failure
 Why DRR? Cont….
• Inappropriate disaster response aggravates the problem

• In some instances, emergency response had led to increasing risk level of

affected population through exposure to other hazards.
E.g. flooding
• Disasters pose a significant threat to development
• governments usually reallocate development funds to meet the cost of
relief operation.
• Donors spend billions of dollars in response that would have been used
for development.

Investment in disaster risk reduction is beneficial !

• Experience in Asia shown that investment of one US dollar in DRR will
translate into cost-saving of up to ten US dollars in subsequent disaster
response.
• [Link]/cpr/we_do/disaster_global_risk_id.[Link]
[Link] Disaster Risk Management /DRR Approaches
1. Prevention
• Prevention is defined as those activities taken to prevent a natural
phenomenon or potential hazard from having harmful effects on either
people or economic assets.
• Disaster prevention refers to measures taken to eliminate the root-
causes that make people vulnerable to disaster.
 Measures designed to provide permanent protection … or reduce the
intensity of a hazardous event to a level that does not cause a
disaster…
 Covers activities designed to impede the occurrence of a disaster event
and/or prevent such an occurrence from having harmful effects on
communities & facilities.
 E.g. Safety standards for industries, flood control measures, & land use
regulations.
 Poverty alleviation & assets redistribution schemes such as land reform,
provision of basic needs & services such as preventive health care,
education, etc…
Prevention…

• The outright (complete) avoidance of

adverse impacts of hazards & related
disasters
2. Preparedness
•Preparedness: Are the measures that ensure the organized mobilization of personnel, funds,
equipments, and supplies within a safe environment for effective relief.
•Disaster preparedness is building up of capacities before a disaster situation prevails inorder to
reduce impacts.
•Its measures include inter alia(among others) , availability of food reserve, emergency reserve
fund, seed reserve, health facilities, warning systems, logistical infrastructure, relief manual, and
shelves of projects

•Adequate preparedness is essential, as risk can never be completely eliminated or reduced.

Preparedness through early warning systems save lives and protect livelihoods and is one of the most cost-
effective ways to reduce the impact of disasters.
Advance measures taken to predict, respond to & manage a hazard event… measures that prepare people
to react appropriately before, during & after it.

Involves measures taken in anticipation of a disaster to ensure that appropriate & effective actions are
taken before, during & in the aftermath.

It attempts to limit the impact of a disaster by structuring the response & affecting a quick & orderly
reaction to the disaster.

E.g The formation & capacity building of an organization to oversee(manage) & implement warning
systems, evacuation, rescue & relief;
formulation of a disaster implementing plan; stockpiling of supplies for immediate mobilization;
emergency communications; training of volunteers, community drills & simulation exercises; public
education & awareness. … reforesting an unstable slope to prevent landslides
 Preparedness…
• The knowledge & capacities developed by governments, professional response
& recovery organizations, communities & individuals to effectively anticipate,
respond to, & recover from, the impacts of likely, imminent or current hazard
events or conditions.
• Early Warning Systems: The provision of timely & effective information
through identified institutions that allows individuals/community exposed to a
hazard to take action, to avoid or reduce their risk & prepare for effective
response.

• It includes a chain of concerns, namely:-

• understanding & mapping the hazard;
• monitoring & forecasting impending events;
• processing & disseminating understandable warnings to political authorities &
the population &
• undertaking appropriate & timely actions in response to the warnings
Global Coordination in Hazard Detection and Forecasting to Support Multi-
Hazard Early warning system

Global Observing System

Coordinated Satellite System

Global Data Processing and Forecasting System

Global Telecommunication System

Communication and
Dissemination

National Meteorological
and Hydrological Services

Media General Private

public Government and sector
civil defence
authorities
 4
1
What is National to local
governments
Community
an Effective Preparedness
EWS?
supported by 5
DRR plans, legislationfeedback
COORDINATION AMONG 5 and coordination
NATIONAL SERVICES mechanisms
2
Meteorological
3
3
Hydrological
3
warnings
Geological feedback
5
Marine
 National to local disaster risk reduction plans, legislation and
Effective Early Warning Systems coordination mechanisms are critical to ensure emergency planning
and response involving 4 technical components
National Example: Cyclone Preparedness Programme
in Bangladesh
 3. Mitigation
 Measures taken well in advance of a hazard event/alert to
minimize vulnerability of communities/households to a
known/expected threat.

 It is taken to minimize the destructive & disruptive effects of

hazards & thus lessen the magnitude of a disaster.

 Measures range from physical/ structural ( flood defenses, safe

building design) to non-structural aspects (legislation, training,
organizing disaster volunteers, public awareness, food security
programs, & advocacy on development issues).
 Mitigation
• The lessening or limitation of
the adverse impacts of
hazards & related disasters.
4. Relief/response

 Involves measures taken to

alleviate immediate hardship
& meet basic needs for shelter,
water, sanitation, health care..

Also includes search, rescue

& protection of those affected.
 Response
• The provision of emergency
services & public assistance
during or immediately after a
disaster in order to save lives,
reduce health impacts, ensure
public safety & meet the basic
subsistence needs of the people
affected.
5. Recovery & rehabilitation

 Process undertaken by a
disaster-affected community to
fully restore itself to its pre-
disaster level of functioning …&
which enables it to become even
more disaster-resistant.

 E.g planting/harvest of drought

resistant crops … storm/cyclone
-proofing buildings, roads,
railways, schools & clinics
 Recovery…
• The restoration, & improvement
where appropriate, of facilities,
livelihoods & living conditions of
disaster affected communities,
including efforts to reduce disaster
risk factors.
 Disaster Risk Management Framework
Derived from Hyogo Framework for Action 2005-2015

Governance and
Organizational Coordination and
Cooperation

Risk Identification Risk Reduction Risk Transfer

Historical hazard data, PREPAREDNESS: Insurance

analysis and changing early warning systems,
emergency planning and Alternative Risk Transfer
hazard trends
response capacities mechanisms
Exposed assets &
MITIGATION AND Other emerging products
vulnerability
PREVENTION:
Risk quantification Medium to long term sectoral
planning (e.g. building
resilient infrastructure)

Information and Knowledge Sharing

Education and training
• There has been global disaster/disaster risk management frameworks and
movements mainly since the 1980s.

• Sustainable Development (1987) - “Our Common Future,”

• Environment and Development (1992)- Rio de Janeiro in 1992 (the so-called

“Earth Summit”) - Agenda 21st agreements on climate change and biodiversity

• Kyoto Protocol (1997): Reduction of Green House Gases- reduction of CO2,

CH4, CFCs, halons, N2O, and peroxyacetyinitrate

• World Summit on Sustainable Development in Johannesburg (2002), the

commitment to sustainable development was reaffirmed
 6.3.5 DRM approaches: a review
1. Sustainable Development approach
•SD multi-dimensional approach that highlights the current needs and future
limitations that have direct relationships with disaster risks and its pillars.
•As disasters cause harm and damage to people, property, infrastructure,
economies & the environment, the goals of sustainable development will be in
danger
•Disaster recovery & rehabilitation efforts require enormous funds 
harm(affect) development .
•Therefore, it is important that disaster prevention/mitigation
programs be an integral part of developmental program.

•efforts to enhance the capacities of communities should cope with

systems at various levels and sectors towards self-reliance and self-
sufficiency in managing disasters effectively.

•Understanding & identifying various types of vulnerabilities

(human, social, economic, and environmental) as well as the nature of
natural hazards are essential components of such efforts.
• The SD view can facilitate the adoption of DRR
program at local level that incorporates the
application of both structural & non-structural
measures

• As a result, investments & efforts for social &

economic development can be protected &
sustained through this approach.
• The key strength of this approach is:

• The need to enhance the capacities of

communities & coping strategies at various levels
& sectors towards self-reliance & self-sufficiency
!
2. Disasters are human-made not natural (
Development failure)
•The characteristics of a disaster became more
associated with its physical impact than with the natural
hazard.
•Interest grew in the design and implementation of ways
to mitigate losses through physical and structural
measures to reduce hazards or to increase the
resistance of structures.
•Natural disasters are intimately connected to the
processes of human development.
• Natural hazards like tropical storm &
earthquakes, however intense, inevitable or
unpredictable, translate to disasters only to the
extent that the society is unprepared to respond
& unable to cope, and consequently, severely
affected.

• Disasters triggered by natural hazards put

development gains at risk. At the same time,
the development choices made by individuals,
communities & nations can pave the way for
unequal distributions of disaster risks.
• When disaster events happen, whether caused by
natural phenomena or human activities, is believed to
be a disaster as if the community or society affected
fails to cope (that is a development failure).
• Thus, the vulnerability of communities and their
assets to the impact of natural hazards is to a
significant extent determined by human action or
inaction.
• Even the occurrence of recent climatic anomalies
(irregularities) attributed to global climate change is
traced to human activities as the emission of
unmanaged and extremely high green house gases
(CO2, methane…).
• This school of thought sees disasters as the collapse or
failure/inadequacy of development activities & the result of human
activities that exacerbate the existing natural hazards

• Therefore, disasters are essentially human-made as development

failure

• This notion of disasters as principally human-made and not

attributable to outcome presents a challenge to practitioners to reconsider
the common use of “natural” and “human-made” in typifying disaster
incidents.
• disasters can be prevented or their impact on peoples & communities
mitigated,

• & that human action or inaction to high risk & vulnerability to natural
hazards could spell the difference!
3). DRM cycle
•It is a concept applied in an integrated approach towards a disaster event in
which the management cycle can be carried out through a sequence of
activities/ phases, each being responsible or designed to address a specific
type of intervention
6.1.4 Hazard/disaster risk/vulnerability assessment

The terms hazard, hazard assessment, hazard mapping, risk, risk

assessment and many other risk management concepts have been
used interchangeably to mean different things and have been used
differently to mean the same thing.
 (i) Hazard assessment(Identification)
 Identification of hazards, including estimation of probabilities (or
frequency) of occurrence of various hazards of different intensities.
 Specification of location (impact area) and characteristics (nature
and behavior).
 Hazard Mapping
It is the process of identifying and displaying the spatial variation of hazard
events or physical conditions (e.g. potential ground shaking, steep slopes,
flood plains, hazardous materials sites, climate zones, etc).
Important variables involved in mapping hazards and interpreting hazard
maps include the size (scale) of the area to be mapped, the availability and
completeness of data, the cost of collecting and mapping data, etc.
• Risk Identification
Focuses on four tasks:
(1) Clarifying stakeholder risk management goals and objectives;
(2) Identifying what exposures are necessary to accomplish those goals
&objectives;
(3) Identifying potential hazards; and
(4)Assessing the vulnerability of identified exposures to the potential hazards.
 Features/characterization / of hazard
Cause/Origin Causes of the hazard

Sign and signals Scientific and indigenous indicators that hazard is likely to happen

Forewarning Time between warning and impact

Speed of onset Rapidity of arrival and impact—we can distinguish between

hazards that occur without almost any warning (earthquake), and
a hazard that can be predicted three to four days in advance to a
very slow-onset hazard like drought and famine

Frequency Does hazard occur seasonally, one a year or every five years

Period of occurrence Does it occur in a particular time of the year (wet or dry season)

Duration How long is a hazard felt - earthquake and aftershocks;

days/weeks/months that an area is flooded, length of military
operations
 (ii) . Trend Assessment
A Trend analysis is an adaptation of the timeline activity used in many participatory research
exercises.
Trends are referred change happened in population( rapid pop growth, shrinking of forest
land, overutilization of resources, technical change, international trends, macro policies.

A risk history helps you to build a sense of change over time and to show how developmental
changes within and around the communities may have increased or reduced with specific risks.
Communities may not have a precise recollection of dates and events. However, the activity helps
to identify general relationships and trends over time.
• Steps in Trend assessment Table
• Compare similarities and differences in time-lines for different risks and relate these to
development changes in the community .
• Remind participants that the tables reflect perceptions of changes over time however, and that it
is sometimes difficult to recall events that happened some years earlier.
• Where applicable, show how gradual (or even sudden) climate changes in the community have
contributed to its risk profile.
• Show how accumulating risk conditions often creep up quietly, and it is only after there are
settlement fires or other incidents that these factors are recognized.
• Climate change and development activities (e.g. Temperature change, seasonal change, socio-
economic activities etc…
• Eg (see next slide)
• Before 1970 1970-1980 1980-1990 1990-2000
 Trend Assessment

Before 1970 1970-1980 1980-1990 1990-2000

• (iii) Vulnerability
Vulnerability assessment
here is defined is “a set of prevailing or consequential conditions,
which adversely affect the community’s ability to prevent, mitigate, prepare for or
respond to hazard events” (Anderson and Woodrow, 1989).
Vulnerability = unsafe conditions (which could be physical, economic, social,
behavioral and environmental)
1. Degree of Vulnerability = ideal safe conditions – (minus) existing unsafe
conditions
• The gaps between the ideal and unsafe condition of the element at risk determine
the degree of exposure to the hazard’s impact – or what is considered under this
paradigm as the degree of vulnerability.
• This means the rich and the poor, although living in the same location, have
different degrees of vulnerability because they have different socioeconomic and
political status.
• In measuring disaster risk based on the above assumption, the mathematical
presentation is:
• Disaster Risk = Hazard x Vulnerability /capacity

2. Vulnerability as the unsafe location of the element at risk. Vulnerability based on unsafe
location refers to the “degree to which an area, people, physical structures or economic
assets are exposed to loss, injury or damage caused by the impact of a hazard.”
 Vulnerability assessment exercises

Level of vulnerability Reasons for

level of
vulnerability

Hazard Elements at risk High medium Low

/Trend profile

a) Human elements
•Gender
•Age

b) Non human elements

•Productive
assets(sectors)

Critical facilities
 (IV) Capacity Assessment
• Capacity is a combination of all the strengths and resources available
within a community, society or organization that can reduce the level of
risk, or the effects of a disaster.

Capacity can be assessed based on discussions with communities about

relevant capacities that can be build on at local level.
We will assess capacities that are available before the hazard, during the
hazard and in managing the long-term climate change trend.

• Building on what people have

Each individual, community, society or nation has latent capacities and
they have to be tapped in order to increase the individual and community
resiliency.
Efforts should aim to develop coping capacities of the individuals and the
communities, and the organizations to develop resiliency from any type
of hazard.
Community Capacity Assessment identifies the strengths and resources
present among individuals, households and the community to cope with,
withstand, prevent, prepare for, mitigate or quickly recover from a
disaster.
Types of resources(capital/asset)
Resources cont …
Resources cont…
 Capacity assessment form cont….

capacities List of resources Constraints in accessing resources

available to
mitigate, respond Before the During the After the
and recover from hazard hazard hazard
the hazard

Human capital

Social capital

Physical capital

Financial capital

Natural capital

Political capital
Vulnerability Capacity Assessment ( VCA)

•VCA is a key component of disaster risk analysis. Its purpose

is to:
identify vulnerable groups;
identify the factors that make them vulnerable and how they
are affected;
assess their needs and capacities (and empower them to
assess these); and
ensure that projects, programs and policies address these
needs, through targeted interventions or prevention and
mitigation of potentially adverse impacts.
(V) Disaster Risk Analysis
• The process of consolidating the findings of hazard,
vulnerability and capacity assessments and draw conclusions and
recommendations for disaster risk reduction and adaptation.

• Examines the significance of identified risks on the community’s

capability to achieve defined goals and objectives.

• Gaps in understanding the nature of the hazard and uncertainties in

expected hazard impacts lead to less accurate risk assessments.
 Disaster risk analysis form
Element at Hazard /trend Vulnerability Capacity Level of risk
risk

Major Grade(H/ Causes Grade Capacit Grade Grade Strategy

impacts M/L) of (H/M/L) y Gap (H/M/L) (H/M/L) to reduce
vulnerabil (Asset, the risk
ity knowled
ge…)

Human L H L
element
•Gender
•Age

Non-
human
element
(Sector)

agriculture

Water
Health
Food
security
 (VI) . Strategic Selection
• A strategy is the BEST POSSIBLE WAY of utilizing limited
community resource (money, materials, time and labor) to realize the
identified DRR measures. The strategy is selected based on
relevance to the purpose, capacity of the community implement it
and the opportunities and threats in the strategy.
• Importance of strategy development
Helps the community to decide possible ways of accomplishing
measures.
Provides basis for a realistic action plan by the community
It helps the community and community organization to define
specific ways (based on their purpose, capacity and opportunity)
to accomplish measures.
It prevents the community from making big plans in many major
areas which are impossible to implement.
• Development of DRR strategy guides a community or organization
in providing answers to the following equally important questions:
What to do, and What not to do
Strategy selection cont…
• Strategy Selection for each Risk Reduction and Adaptation Measure
assess:-
• What are the strategies that could be taken to achieve this?
• How urgent is this measure in terms of the speed at which it can reduce
losses?
• How important is this measure in terms of the size of its impact on disaster
losses?
• How feasible is it? Can it be done with existing capacity and resources?
Note external resources which might be able to be used to tackle this.
• Are there any negative side effects? Check if the strategy will lead to mal-
adaptation? You can use the adaptive capacity categories, and the different
stages of the disaster cycle to help you to think of all possible strategies
which could be employed in your sector.
Main strategic questions to DRR strategy development

[Link] needs to be done?

[Link] organization takes responsibilities for which activities?
[Link] there any new organization needed?
4. Which activities are feasible & possibly included in:
Development Plans
Contingency Plans
5. What are the selected ways of following up on implementation and
checking whether we succeeded?
(VII) Planning
• Planning: refers to a range of activities and processes involved in developing
(preparing) a plan. Objective (rationality) of planning: is to achieve
efficient allocation of resources in achieving social and economic objectives,
which are promised in government policies, strategies.

• A plan is document consisting of social and economic objectives ,that shows

the available or anticipated resources , possible constraints, policies and
strategies, institution with a time horizon (short, medium or long).

 Project planning: defines the project activities and end products that will be
performed; (describes how the activities will be accomplished.

 A project plan is a formal, approved document that is used to manage and

control the project and is expected to change over time.

 Project planning must be systematic, flexible enough to handle unique

activities, disciplined through reviews and controls, and capable of accepting
multifunctional inputs.

269
6.1.5 Managing/governing risk along the supply chain/ value chain
6.1 5.1 Defining Supply chain and/or Value chain
• Supply chain is a system of organizations, people, technology, activities,
information and resources involved in moving a product or service from
supplier to customer.
• Supply chain activities transform natural resources, raw materials and
components into a finished product that is delivered to the end customer.
• Value chain: the process or activities by which a company adds value to
an article, including production, marketing, and the provision of after-sales
service.
• A value chain is a set of activities that an organization carries out to
create value for its customers.
• The difference between a value chain and a supply chain is that a
supply chain is the process of all parties involved in fulfilling a customer
request, while a value chain is a set of interrelated activities a company
uses to create a competitive advantage.
• Due to its global nature and systemic impact on the firm’s financial
performance, the supply chain arguably faces more risk than other areas
of the company.
 The objective of value chains associated with the DRR are:-

• Strengthen the capacities of the local team in the field of DRR

• Identify and analyse natural hazards and risk which might have a
negative impact on the project activities in the future
• Identify and analyse coping strategies and use them as a basis for
elaborating future interventions to strengthen the resilience of
beneficiaries.
• Identify risks which might hamper specific value chain activities
• Identify within the team interventions which strengthen the social
and economic resilience of local communities and authorities
6.1.5 2 Supply chain risk management

• Ghoshal (1987) classifies risks along the supply chain as follow:-

• Macroeconomic risks associated with significant economic shifts
in wage rates, interest rates, exchange rates, and prices;
• Policy risks associated with unexpected actions of national
governments;
• Competitive risks associated with uncertainty about competitor
activities in foreign markets; and
• Resource risks associated with unanticipated differences in
resource requirements in foreign markets.
• The risk events most noticeable to the global supply chain
managers interviewed were currency, transit time variability,
forecasts, quality, safety, business disruption, survival, inventory
(and tools) ownership, culture, dependency and opportunism, oil
price fluctuation, and risk events affecting suppliers and
customers.
 6.1. 5.3 Disaster risk in agricultural value chains
• Agricultural value chains are integral components of the global food system. As such, the
vulnerability and exposure of agricultural systems to hazards can have far reaching and
cascading effects for global food security.
• Agricultural value chains are conceptualized as having the following
components:-
• Input suppliers (i.e. groups or businesses that supply producers with fertilizers,
chemicals, seeds and other inputs),
• Producers (i.e. the individuals or businesses that involved with primary agricultural
production),
• Intermediaries (i.e. commodity buyers
• or brokers who act as middle-people),
• Processors (i.e. business that are involved
with the secondary production of food
goods from commodities), marketers
(i.e. businesses that aim to sell the food &goods) and
• Consumers (i.e. those that eat the food).
Implicit within the value chain are
the relationships and social capital that
exist between the components (GTZ, 2008).
Agricultural value chain (from Jaffee et al. 2010)
Pesticide Contamination:
• Pesticides are lost from farms in much the same way as nutrients.
• They can leach through the ground, run off or escape into the atmosphere.
• Some of their effects are well-known; since a large proportion of pesticides make
it into the environment, eg Carson’s book Silent Spring ( water, soil ,birds)
• Pesticides can have large detrimental effects, particularly on aquatic and avian
species (Newton, 2004).
• Pesticide residues are passed along the food chain, and inevitably reach humans
as well.
• There are many impacts from pesticide use that are poorly understood.
• Exposure (sprayers), residues, consumer…(shorter term (acute) eg eye irritation,
skin irritation & long term (chronic) eg cancer, birth defect, respiratory problem.
• Developing countries often have less effective pesticide regulations
• The ‘circle of poison’, however, referring to the trap of producers in loosely-
regulated countries using dangerous pesticides on food which is then sold to
consumers in strictly-regulated, no longer is of major concern.
• This is a sign that policies are improving, and although pesticide use is still
increasing, its growth is slowing
 Principles of Enhancing Agricultural Resilience to Disasters
• Disaster risk reduction strategies can be implemented at a number of levels. The
most common levels used for analyzing these strategies in agriculture include
on-farm or household, community, regional, provincial, national and
international.
• Disaster risk reduction needs to be place-based, but could be guided by the
principles highlighted below:-

1. Diversification: Diversification is an important part of disaster risk reduction in

agriculture. Diversification typically refers to introducing new crops and
livestock to agricultural systems. This approach reduces vulnerability by
increasing the commodity options for a producer.

2. Risk transfer and sharing : Risk transfer and sharing have been important parts
of disaster risk reduction in agricultural systems in many parts of the globe. This
form of disaster risk reduction involves, as its name suggests, shifting or
distributing risk between or across different actors within an agricultural system.
3. Sustainable Intensification :Agricultural intensification has played a major part
in increasing productivity over the last century. Intensification has occurred through
a number of ways and has involved the following innovations: crop improvements,
agroforestry, soil conservation, integrated pest management, horticulture, livestock
and aquaculture.
. In addition, there are a number of novel extension practices, such as farmer field
schools and modern communication practices (e.g. ICTs), that will be important.

4. Resource-use Efficiency: Efficient resource-use helps reduce vulnerability to

multiple hazards in a number of contexts. In a general sense, increased efficiency
typically leads to reduced vulnerability through decreased dependence on critical
resources (e.g. fertilizer, water) and more sustainable resource management.

5. Market Governance: The governance of markets, especially at the local scale, is

increasingly involving new actors. Access to value chains for small-scale
agricultural producers, as related to market governance, can contribute significantly
to their abilities to manage disaster risks by improving access to resources used in
coping or adapting.
Dimensions of corporate social responsibility in the food chain (adapted from
Maloni and Brown 2006).
[Link] Recommendations to Manage Supply Chain Risk
• To manage supply chain risk in your company, you will have to develop
processes to Identify, prioritize, and mitigate risk.
(): Risk identification
– What can go wrong?
(ii): Risk assessment (mentined above )
– What is the likelihood it will go wrong?
– What is the magnitude of the consequences and overall impact on the firm?
– How quickly will the problem be discovered?
(iii): Risk mitigation and management
– What options are available to mitigate the risks?
– What are the costs and benefits of each option?

 Leading companies have a process that executes these steps continually over
time.
 In the dynamic global environment, change is a constant.
 Risks identified and mitigated today become obsolete (outdated) tomorrow.
 Risk management must be an ongoing process.
 The sources of supply Chain Risk

2) Supply Risk
1. Demand Risk •Dependency on key suppliers
•Loss of major •Consolidation in supply
markets
accounts •Quality and management
•Volatility of Demand issues arising from off-shore
sourcing
•Concentration of
•Potential disruption at 2nd tier
customer base level
•Short life cycles •Length and variability of
•Innovative replenishment lead-times
competitors
 The sources of supply Chain Risk..
4) Network/Control Risk
3) Process Risk •Asymmetric power
relationship
•Manufacturing yield
variability •Poor visibility along the
pipeline
•Lengthy set-up times and
inflexible process •Inappropriate rules that
distort demand
•Equipment Reliability
•Lack of collaborative
•Limited planning and forecasts
capacity/bottlenecks
•Bullwhip effects due to
•Outsourcing key business multiple echelons
process
. The sources of supply Chain Risk..
5) Environment Risk
•Natural disaster
•Terrorism and war
•Regulatory changes
•Tax, duties and quotas
•Strikes
 Factors contributing to supply chain risk
• There are a number of factors which might be considered to
have increased the level of risk. These include:
 A focus on efficiency rather than effectiveness
 The globalisation of supply chains
 Focussed factories and centralised distribution
 The trend to outsourcing
 Reduction of the supplier base
 Volatility of demand
 Lack of visibility and control procedures
The three-step risk management process
A) Identify the risks: Listed below as thought starters are some risks your supply chain may
face:-
1. Routine supply chain risks: These involve events like unexpected transit delays, changes
in customers’ orders, problems with suppliers, theft, and all of which can cause serious delays
in customer shipments.
2. Natural disasters: Although these are unpredictable, a few firms try to anticipate climatic
disruptions and develop contingency plans. If a company has a facility in a hurricane-prone
area, it can assume it’s only a matter of time before the odds catch up with the location.
3 Quality problems: A long supply line often exacerbates quality issues. This risk often causes
companies to carry more inventory.
4. Forecast error: Long-range forecasts required by long global supply lines are notoriously
inaccurate. Forecast error over long global lead times often results in major availability issues
and excess inventory problems.
5. Damage: Whether you’re importing or exporting, there is significantly more handling in the
supply chain that exponentially increases the chance for damage.
[Link]/civil unrest: While not a major concern, it should be on a company’s risk list and
examined, depending on the countries of import and export.
8. Strikes: Strikes are a reality—for example, the 40-day Hong Kong port workers strike in
April–May 2013. Strikes could also occur at production plants or facilities that supply critical
parts.
9. Laws and regulations: Unusual or unexpected application of regulations in a particular
country must be considered, as must the Foreign Corrupt Practices Act in the United States.
10. Customs or port issues: Customs regulations are always in
flux( instability, change) . Failure by shippers to understand the rules
and regulations can often cause excessive shipment delays and
fines.
11. Terrorism: Although quite rare, acts of terrorism often result in
the addition of additional permanent costs to the supply chain far
beyond the cost of the act itself.
12. Safety problems: How many times are safety recalls issued on
top-name brands? There may be opportunities with product liability
insurance to mitigate risks, from product design to manufacturing.

13. Changes in economics: For example, wages in China are

escalating(rising) for a variety of reasons. Some point to the “one-
baby” policy as a source of future increasing labor shortages, even
though predictions call for that policy to relax. As reported by
China’s National Bureau of Statistics, wages rose 14 % for private-
sector workers in 2012, compared with 12.3 % in [Link]
contributed to nearly a 70% wage increase in the past five years.

14. Pirate attacks: Piracy on the world’s seas recently reached a

five-year low, although it’s still a danger, with 297 ships attacked in
2012, compared with 439 in 2011.
C) Some elements that companies use in their risk mitigation plans
include:-
1. Insurance: Firms need to work with insurance providers and create a plan
to use insurance to mitigate risk where appropriate, based on an objective cost-
benefit analysis (described in more detail later).
2. Best practices approaches: Companies would be well served to employ
one of the best practice models previously described.
3. Inventory: Some call this “the no-brainer” approach to mitigating risk. It is
certainly the most often used, either by design or accident. How much
additional inventory results if a source is moved globally without making
systemic improvements in the supply chain process? Many of those we talk to
say 60 to 75 or more days of supply!

4. Import excellence: Leading companies realize that the better they become
at global shipping, the less risk they incur. They strive to achieve import
excellence, get the highest-Fairtrade certification, and optimize incoterms
(international commerce terms, which specify liability and responsibility
throughout the global supply chain).
[Link] partners: Although it is potentially costly, some companies
develop a second domestic source that can be quickly ramped (risen) up. They
insist on dealing with strong, competent world-class suppliers, ideally with a
“first world” parent
Constraints: identifying, analyzing, Evaluating responding and
monitoring of risks

• Typical constraints
– Budget/ Funding
– Schedule/ time
– People/Staffing
– Facilities and equipment
– Customer relations
– Project size and/or complexity
– Overall structure
– Organizational resistance
– External factors etc....

Activity
Identify the risks and constraints in the case study??
Summary of Project Risk Management
 Identify: What can go wrong? What can go right?

 Prioritize :Which ones have the potential of impacting the most?

 Do something about it: Exploit/Avoid or enhance/mitigate or

share/transfer Or Accept (Passive/Active)

The ten golden risk rules give you guidelines on how to implement risk
management successfully in your project.

Rule 1: Make Risk Management Part of Your Project

Rule 2: Identify Risks Early in Your Project
Rule 3: Communicate About Risks
Rule 4: Consider Both Threats and Opportunities
Rule 5: Clarify Ownership Issues
Rule 6: Prioritise Risks
Rule 7: Analyse Risks
Rule 8: Plan and Implement Risk Responses
Rule 9: Register Project Risks
Rule 10: Track Risks and Associated Tasks
• ፕሮጀክት ቀረፃ
• አንድ ፕሮጀክት ቀረፃ (proposal) ሊያካትታቸው የሚገባቸው ዋና ዋና ነጥቦች፡-
• A) ማውጫ (Table of contents)
• ገፁ ከሦስት ከበለጠ ማውጫ ሊዘጋጅለት ይገበዋል፡፡ ማውጫ ሁሉንም ምዕራፎችና ንዑስ ምዕራፎች ያሉበትን ገፅ ባመላከተ
መልኩ መዘጋጀት ይኖርበታል፡፡

• B) አጭር መግለጫ (Executive Summary)

• ከግማሽ ገፅ ያልበለጠ ሆኖ ለያካትታቸው ሃሳቦች
• ☞ ፕሮጀክቱ እንዲሰራ ያስገደደው ዋና ችግር
• ☞ፕሮጀክቱ የሚያመጣው ተፅዕኖ
• ☞ለችግሩ የተቀመጠ መፍተሄ
• ☞የፕሮጀክት አዋጭነት የሚያመላክት ግምገማ
• ☞ፕሮጀክቱ የሚያስገኘው ጥቅም
• ☞ፕሮጀክቱ የሚያስፈልገው የገንዘብ መጠንና የሚወስደው ጊዜ መካተት አለባቸው፡፡

• C) መግቢያ (Back Ground)

• ከአንድ ገፅ ባልበለጠ መገለፅ ሲገባው የሚያካትታቸው ነጥቦች፡-
• ☞ ፕሮጀክቱ የሚፈታው ችግር ምን እንደሆነ
• ☞ ችግሩን ለምን መፍታት እንዳስፈለገው
• ☞ ስለፕሮጀክቱ አጠር ያለ ማብራሪያ የሚሉትን ይይዛል፡፡
• D) ፕሮጀክቱ የሚመልሳቸው ችግሮች (Rationale)
• ፕሮጀክቱ እንዲሰራ ምክንያት የሆኑ ነገሮች ተሰርተው መገለፅ አለባቸው በተጨማሪም የፕሮጀክቱ አጠቃላይ ግብ ለአንባቢው
ግልፅ በሆነ መንገድ መስፈር አለበት፡፡
• E) የፕሮጀክቱ ዓላማ (project objective)
• ፕሮጀክቱ ሊሰራበት የሚችሉ ዋናውንና ዝርዝር ዓላማዎች ለይቶ ማቅረብ አለበት፡፡ ይህም ፕሮጀክቱ ሲጠናቀቅ ሊያስገኘው
ይችላል ተብሎ የታሰበውን ወጤት መግለፅ ያስፈልጋል፡፡
• F) የፕሮጀክቱመግለጫ (project Description):-
• ☞ የፕሮጀክቱ ስያሜና ዓላማ
• ☞ ጉዳዮን የሚያስረዳ ገለፃ
• ☞ የፕሮጀክቱ ቀጣይነት
• ☞ የፕሮጀክተ የሚተገበርበት ስልት
• G) የፕሮጀክቱ አመራርና አደረጃጀት (project management and organization):-
• ☞ ፕሮጀክቱን የሚመሩቱና የሚሳተፉ
• ☞ የባለሙያዎችን ኃላፊነትና ተግባር
• ☞ የፕሮጀክቱን ውስጣዊ አሰራር አደረጃጀት አስፈላጊ ሆኖ ከተገኘም መግለፅ አለበት፡፡

• H) የፕሮጀክቱ ያገባኛል ባዮችና ተጠቃሚዎች (stakeholders and Beneficiaries):-

• ☞ ተጠቃሚዎች (Beneficiaries) ማለት በፕሮጀክቱ በቀጥታም ሆነ በተዘዋዋሪ ተጠቃሚ የሚሆኑትን ይገልፃል፡፡
• ☞ ያገባኛል ባዮች (stakeholders):-
• የመጀመሪያ ደረጃ ያገባኛል ባዮች (Primary stake holders)፡-በፕሮጀክቱ በቀጥታም ሆነ በተዘዋዋሪ በአሉታዊም ሆነ
በአወንታዊ ተፅዕኖ የሚደርስባቸው ወይም በፕሮጀክቱ ላይ የሚያደርሱትን ያካትታል፡፡
• የሁለተኛ ደረጃ ያገባኛል ባዮች (secondary stake holders)፡- ለፕሮጀክቱ መሰራት የራሳቸው ድርሻና ተፅዕኖ
ያላቸው ግለሰቦች፤ ቡድኖችና ተቋማት ተለይተው መዘርዘር አለባቸው፡፡

• I) የፕሮጀክቱ ትግበራ (project implementation):-

• የፕሮጀክት ዕቅድ ማለት የሚሰሩት ስራዎች፤ ስራውን ለመስራት የሚያስፈልጉ የሀብት ድልድል፤ ስራው በማን፤
እንዴት፤ መቸና የት እንደሚፈፀም መገለፅ አለበት፡፡

• J) ሊያጋጥሙ የሚችሉ ስጋትና በጎ ጎኖች (Risk and Assumption):-

• ☞ ፕሮጀክቱ ተግባራዊ ሲሆን ሊያጋጥሙ ይችላሉ ተብሎ የሚታሰቡ ስጋቶች ይገለፁበታል፡፡
• ☞ ለፕሮጀክቱን ተፈፃሚነት የሚያፋጥኑ፤ የሚረዱ በጎ ጎን ያላቸው ነገሮች አብራርቶ በሰንጠረዥ መገለፅ አለበት፡፡

• K) ክትትና ግምገማ (Monitoring and Evaluation):

• ይህ ርዕስ የሚይዛቸው፡-
• ☞ የስብሰባ ቃለ ጉባኤ፤ የስራ ጉብኝት፤ የማማከር ስራ መቸ እንደሚደረግና በስንት ጊዜ ልዮነት እንደሚቀርብ
• ☞ የክትትል ስራ የሚሰራበት ስልት
• ☞ የግምገማ ዕቅድን
• ☞ ፕሮጀክት እንዴት ለሚመለከታቸው ሪፖርት እንደሚደረግ

• L) የፕሮጀክቱ ቀጣይነት (sustainability):

 Thank you End of the Course.

How to reduce/mitigate projcet risk?

• Stakeholders are:
– Project Managers
– Customers
– Performing Organizations,owners
– Sponsor
– Team
– Internal/External
– End User
-Society, citizens

– Others: owner, funders, supplier, contractor