Managing risks in global project business: A case study

In this paper we examine the current project risk management activities in three Finnish project organizations. Our aim is to describe the anatomy of the formative risk management process and related embedded activities currently used to identify, analyse or mitigate risks in global engineering projects. This study shows that there is a difference between written risk management procedures, managers' ambitions towards risk management and how risk management is actually realized in projects. We also analysed how systematic and participative the risk management activities are during the project life cycle. We identified two discontinuity points: the first one is in the project start-up and handover from the sales to the project team, in a phase where the main decisions affecting the risks in the project have already been made and where the risk knowledge should be transferred from the sales team to the project team. The other discontinuity point is at the end of the project where the risk information from each project should be gathered within a project team and utilized in other projects. Even though there were discontinuities in the formal risk management processes within the projects, the risks were successfully managed in the case companies. This could imply that other processes and mechanisms are used parallel to the formal risk management process. These non-formal actions are used to cover the discontinuity points and the areas where the formal risk management lacks the flexibility and agility required.