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DEFINING RISK ASSESSMENT CONFIDENCE LEVELS FOR USE IN PROJECT MANAGEMENT COMMUNICATIONS
Title
DEFINING RISK ASSESSMENT CONFIDENCE LEVELS FOR USE IN PROJECT MANAGEMENT COMMUNICATIONS.
Creator
Johnson, Gary, Pet-Armacost, Julia, University of Central Florida
Abstract / Description
A review of the literature regarding risk management and effective risk communications identified that very few researchers have addressed risk assessment confidence levels when using risk scoring methods. The focus of this research is to develop a definition of risk assessment confidence levels for use in internal project management communications and to evaluate its usefulness. This research defines risk assessment confidence level as "The degree of certainty that the likelihood or...
Show moreA review of the literature regarding risk management and effective risk communications identified that very few researchers have addressed risk assessment confidence levels when using risk scoring methods. The focus of this research is to develop a definition of risk assessment confidence levels for use in internal project management communications and to evaluate its usefulness. This research defines risk assessment confidence level as "The degree of certainty that the likelihood or consequence score (assigned by the risk assessor) reflects reality." A specific level of confidence is defined based on the types of analyses that were conducted to determine the risk score. A survey method was used to obtain data from a representative sample of risk assessment professionals from industry and academia to measure their opinion on the usefulness of the defined risk assessment confidence levels. The survey consisted of seven questions related to usefulness--four questions addressed the importance of stating confidence levels in risk assessments and three addressed the usableness of the proposed confidence level. Data were collected on the role and experience level of each of the respondents and the survey also included a comment section to obtain additional feedback. The survey generated 364 respondents representing a broad variety of roles associated with decision making and risk management with experience levels from fairly new to experienced risk assessors. The survey data were analyzed by calculating the proportion of respondents who gave negative, neutral and positive responses to the survey questions. An examination of the roles of the survey respondents indicated that no single group was dominant. A non-parametric Kruskal-Wallis test generally failed to reject the hypothesis that the means of the survey response distributions were identical. There was one exception which indicated that there are differences based on role and by inspection of the responses, it appears that decision makers, academics, and others more strongly support the need for confidence level information to reduce the difficulty in making risk based decisions in projects. The survey responses at a confidence level of 95% have a range of errors from 3.84 to 4.97%. Based on the results of the survey, 77 – 83% of those surveyed indicated agreement that knowing the confidence the assessors have in their assessment is important and would improve a management decision. The survey showed that 60 – 86% of the respondents agreed that the confidence levels and their definitions as presented in the survey were usable. The question with the lowest agreement (60%) was related to the way in which the individual levels were defined. The ad-hoc comments provided in the survey were divided into eleven groups based on similarity of the subject of the comment and then examined for common themes. These added additional insight into the results and useful information for future research efforts. This research validates that the use of risk assessment confidence levels is considered to be useful in project risk management. The research also identified several potential areas for future work, including determining the appropriate number of confidence levels that should be defined, refining the definition of the individual confidence level definitions, examining historical perspectives of whether the risk assessments were accurate, examining the concept of shiftability of risk assessments, further research on communication of variability of risk assessments, and research into the usefulness of risk matrices.
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Date Issued
2008
Identifier
CFE0002352, ucf:47791
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0002352
IMPROVING PROJECT MANAGEMENT WITH SIMULATION AND COMPLETION DISTRIBUTION FUNCTIONS
Title
IMPROVING PROJECT MANAGEMENT WITH SIMULATION AND COMPLETION DISTRIBUTION FUNCTIONS.
Creator
Cates, Grant, Mollaghasemi, Mansooreh, University of Central Florida
Abstract / Description
Despite the critical importance of project completion timeliness, management practices in place today remain inadequate for addressing the persistent problem of project completion tardiness. Uncertainty has been identified as a contributing factor in late projects. This uncertainty resides in activity duration estimates, unplanned upsetting events, and the potential unavailability of critical resources. This research developed a comprehensive simulation based methodology for conducting...
Show moreDespite the critical importance of project completion timeliness, management practices in place today remain inadequate for addressing the persistent problem of project completion tardiness. Uncertainty has been identified as a contributing factor in late projects. This uncertainty resides in activity duration estimates, unplanned upsetting events, and the potential unavailability of critical resources. This research developed a comprehensive simulation based methodology for conducting quantitative project completion-time risk assessments. The methodology enables project stakeholders to visualize uncertainty or risk, i.e. the likelihood of their project completing late and the magnitude of the lateness, by providing them with a completion time distribution function of their projects. Discrete event simulation is used to determine a project's completion distribution function. The project simulation is populated with both deterministic and stochastic elements. Deterministic inputs include planned activities and resource requirements. Stochastic inputs include activity duration growth distributions, probabilities for unplanned upsetting events, and other dynamic constraints upon project activities. Stochastic inputs are based upon past data from similar projects. The time for an entity to complete the simulation network, subject to both the deterministic and stochastic factors, represents the time to complete the project. Multiple replications of the simulation are run to create the completion distribution function. The methodology was demonstrated to be effective for the on-going project to assemble the International Space Station. Approximately $500 million per month is being spent on this project, which is scheduled to complete by 2010. Project stakeholders participated in determining and managing completion distribution functions. The first result was improved project completion risk awareness. Secondly, mitigation options were analyzed to improve project completion performance and reduce total project cost.
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Date Issued
2004
Identifier
CFE0000209, ucf:46243
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0000209
The Effects of Risk and Trust on the Achievement of Sustainable Competitive Advantage from B2B E-Commerce Trading Relationships
Title
The Effects of Risk and Trust on the Achievement of Sustainable Competitive Advantage from B2B E-Commerce Trading Relationships.
Creator
Hampton, Clark, Sutton, Steven, Roberts, Robin, Arnold, Vicky, Khazanchi, Deepak, Benford, Tanya, University of Central Florida
Abstract / Description
This dissertation consists of three interrelated studies focusing on the use of business-to-business (B2B) electronic commerce (e-commerce) to facilitate supply chain transactions. B2B e-commerce enabled supply chains produce substantial savings for organizations by reducing the amount of time and money necessary to negotiate contracts, processes orders, and pay suppliers. However, doubt exists as to whether reduced transaction costs are a sustainable competitive advantage for organizations....
Show moreThis dissertation consists of three interrelated studies focusing on the use of business-to-business (B2B) electronic commerce (e-commerce) to facilitate supply chain transactions. B2B e-commerce enabled supply chains produce substantial savings for organizations by reducing the amount of time and money necessary to negotiate contracts, processes orders, and pay suppliers. However, doubt exists as to whether reduced transaction costs are a sustainable competitive advantage for organizations. The advent of widespread and cost effective B2B e-commerce enabled supply chains coupled with increasingly complex, dynamic, and global competitive markets are encouraging organizations to form long-term relationships with their trading partners to achieve sustainable competitive advantage from improved supply chain performance. Competition is no longer restricted to large firms and end-product producers, but now encompasses the extended organizational supply chain. Using three separate, but related theories, these studies investigate 1) the factors affecting satisfaction with B2B e-commerce trading relationships, 2) the antecedents and effects of risk and trust on assurance desirability in B2B e-commerce partnerships, and 3) the impact of enterprise risk management procedures on the achievement of sustainable competitive advantage from B2B e-commerce enabled transnational alliances. Critical to achieving sustainable competitive advantage from B2B e-commerce capabilities is the existence of long-term mutually satisfying buyer(-)supplier relationships. The first study examines the antecedents of relationship satisfaction between B2B e-commerce trading partners. Using the relational view of the firm, a theoretical model is developed to investigate the direct and countervailing effects of trust and risk on relationship satisfaction. In addition, the indirect effects of justice and commitment on relationship satisfaction are also investigated. A field survey is used to collect data from 205 industry professionals concerning B2B e-commerce trading partnerships. Structural equation modeling is used to evaluate the hypothesized model relationships. The results support all hypotheses and indicate good model fit with strong explanatory power. This study contributes to the accounting information systems and strategic management literature by investigating the interactive but independent roles of risk and trust within B2B e-commerce trading relationships. The second study examines the integrative effects of power, risk, and trust, along with their antecedents, on the desirability of assurance over a trading partner's e-commerce processes. Using the resource advantage theory of competition as a foundation, a research model is developed to examine the relationships among the various trading partners and organizational factors that drive demand for a high information governance structure such as assurance. A field survey is used to collect data from 205 industry professionals to enable the evaluation of the complex relationships in the overall research model using structural equation modeling. The results support all hypotheses and provide good model fit, strong explanatory power, and strong support for the theory. This study expands the literature on management control systems within interorganizational relationships by addressing three contemporary concerns in the literature: (1) the minimal consideration of the impact of information technology in these relationships, (2) the minimal consideration of the impact of variances in the relative power of the trading partners, and (3) the need to consider the dual influence of risk and trust. Globalization places greater emphasis on the development of transnational alliances. The greatest benefits from alliances are derived from high-level information sharing, but risk escalates with information sharing. The purpose of the third study is to examine the influence of enterprise risk management (ERM) on risk and trust associated with transnational alliances and the resulting impact on interorganizational information sharing. Survey data is gathered from 200 senior-level managers monitoring transnational alliances. Structural equation modeling is used to test the hypothesized relationships. The results provide strong support for the hypothesized relationships and the overall research model, showing that high ERM leads to decreased risk, increased trust, and improved information sharing.
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Date Issued
2011
Identifier
CFE0004117, ucf:49108
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0004117
Three Studies Examining the Effects of Psychological Distance on Judgment and Decision Making in Accounting
Title
Three Studies Examining the Effects of Psychological Distance on Judgment and Decision Making in Accounting.
Creator
Weisner, Martin, Sutton, Steven, Arnold, Vicky, Robb, Sean, Messier, William, University of Central Florida
Abstract / Description
This dissertation comprises three studies, a literature review and two experimental studies, that center on the effects of psychological distance on judgment and decision-making in accounting. Construal level theory (CLT) of psychological distance (Liberman and Trope 1998; Trope and Liberman 2003), a framework recently developed in the field of social psychology, constitutes the theoretical foundation for each study.The first study reviews extant literature on CLT and illustrates the theory's...
Show moreThis dissertation comprises three studies, a literature review and two experimental studies, that center on the effects of psychological distance on judgment and decision-making in accounting. Construal level theory (CLT) of psychological distance (Liberman and Trope 1998; Trope and Liberman 2003), a framework recently developed in the field of social psychology, constitutes the theoretical foundation for each study.The first study reviews extant literature on CLT and illustrates the theory's potential for investigating previously unexplained phenomena within the accounting domain. Selected publications that apply CLT in contexts that are of particular interest to accounting researchers are emphasized and a series of broad, CLT-based research questions pertaining to various accounting domains are offered. The second study applies CLT to the audit context by investigating whether the performance of common auditing tasks that require varying degrees of abstract thinking affect decision-makers' overall mindset and hence their subsequent judgment. Results from the second study have important implications for audit practice as auditors work in environments that require frequent shifts in focus due to multiple client or project demands. The third study applies CLT to the enterprise risk management context by examining how spatial distance from a risk assessment object and risk category (i.e., the type of risk) affects decision-makers' assessment of the probability that the risk will materialize. The third study thus informs the corporate governance literature by identifying psychological distance as a potential source for judgment bias during the risk assessment process.Overall, the results reported in this dissertation suggest that psychological distance systematically affects individuals' judgment subject to the caveat that the judgment of concern falls within the domain of the decision-maker's routine cognition. By presenting empirical evidence from both the audit and the risk management domain, the studies contribute to our understanding of the heuristics and biases in judgment and decision-making in professional settings that are of interest to accounting research.
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Date Issued
2015
Identifier
CFE0005735, ucf:50091
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0005735
Risk Management in Reservoir Operations in the Context of Undefined Competitive Consumption
Title
Risk Management in Reservoir Operations in the Context of Undefined Competitive Consumption.
Creator
Salami, Yunus, Nnadi, Fidelia, Wang, Dingbao, Chopra, Manoj, Rowney, Alexander, Divo, Eduardo, University of Central Florida
Abstract / Description
Dams and reservoirs with multiple purposes require effective management to fully realize their purposes and maximize efficiency. For instance, a reservoir intended mainly for the purposes of flood control and hydropower generation may result in a system with primary objectives that conflict with each other. This is because higher hydraulic heads are required to achieve the hydropower generation objective while relatively lower reservoir levels are required to fulfill flood control objectives....
Show moreDams and reservoirs with multiple purposes require effective management to fully realize their purposes and maximize efficiency. For instance, a reservoir intended mainly for the purposes of flood control and hydropower generation may result in a system with primary objectives that conflict with each other. This is because higher hydraulic heads are required to achieve the hydropower generation objective while relatively lower reservoir levels are required to fulfill flood control objectives. Protracted imbalances between these two could increase the susceptibility of the system to risks of water shortage or flood, depending on inflow volumes and operational policy effectiveness. The magnitudes of these risks can become even more pronounced when upstream use of the river is unregulated and uncoordinated so that upstream consumptions and releases are arbitrary. As a result, safe operational practices and risk management alternatives must be structured after an improved understanding of historical and anticipated inflows, actual and speculative upstream uses, and the overall hydrology of catchments upstream of the reservoir. One of such systems with an almost yearly occurrence of floods and shortages due to both natural and anthropogenic factors is the dual reservoir system of Kainji and Jebba in Nigeria. To analyze and manage these risks, a methodology that combines a stochastic and deterministic approach was employed. Using methods outlined by Box and Jenkins (1976), autoregressive integrated moving average (ARIMA) models were developed for forecasting Niger river inflows at Kainji reservoir based on twenty-seven-year-long historical inflow data (1970-1996). These were then validated using seven-year inflow records (1997-2003). The model with the best correlation was a seasonal multiplicative ARIMA (2,1,1)x(2,1,2)12 model. Supplementary validation of this model was done with discharge rating curves developed for the inlet of the reservoir using in situ inflows and satellite altimetry data. By comparing net inflow volumes with storage deficit, flood and shortage risk factors at the reservoir were determined based on (a) actual inflows, (b) forecasted inflows (up to 2015), and (c) simulated scenarios depicting undefined competitive upstream consumption. Calculated high-risk years matched actual flood years again suggesting the reliability of the model. Monte Carlo simulations were then used to prescribe safe outflows and storage allocations in order to reduce futuristic risk factors. The theoretical safety levels achieved indicated risk factors below threshold values and showed that this methodology is a powerful tool for estimating and managing flood and shortage risks in reservoirs with undefined competitive upstream consumption.
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Date Issued
2012
Identifier
CFE0004593, ucf:49193
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0004593