2949775132

Ostrava 8.-9. zan 2010

5. mezinarodm konference Rizem a modelovam finanćnfch rizik VŚB-TU Ostrava, Ekonomicka fakulta, katedra Financf

the entire portfolio of risks can be managed, instead of a single one at a time”[8]. The most important thing is that risk identification creates the right database for any further steps related to the risk analysis [9]. It should be noted that the literaturę of the subject contains numerous similar concepts and approaches i.e. one can come across the concepts and approaches, which differ significantly from the concept illustrated by the figurę 1. No matter how risk identification is understood and defined, one should remember about three vital aspects, namely:

•    there are many different risk identification methods, which can be freely used in practice, depending on a situation and needs;

•    risk identification methods have both their strengths and their weaknesses;

•    particular methods, techniąues and tools bring various effects.

In practice, there’s a wide spectrum of methods which companies may apply to identify risks. The Project Management Institute in Newtown, in its publication most often mentions a document review, information collection methods, check lists, an assumption analysis, diagram-based techniąues [5], The Risk Management Institute in London, however, lists the following risk identification methods: „(...) brainstorming, ąuestionnaires, business studies which look at each business process and describe both the internal processes and extemal factors which can influence those processes, industry benchmarking, scenario analysis, risk assessment workshops, incident investigation, auditing and inspection, HAZOP (Hazard & Operability Studies)” [10]. (Due to the fact that these methods are well-known and thoroughly-discussed in the scientific literaturę, the paper doesn’t provide their detailed descriptions.) As you can see, there’s a wide rangę of methods and ways of risk identification in investment projects, and various advantages and disadvantages demonstrated by these methods should always be taken into account when using them in corporate practice. The strengths and weaknesses of some of them are described in a table 1.

Techniąue	Strengths	Weaknesses	CSFs for Effective Application
Assumptions & Constraints Analysis	•    Simple structured approach •    Can be based on assumptions & constraints already listed in project charter •    Generates project - specific risks	• Implicit/hidden assumptions or constraints are often missed	• Reąuires a comprehensive list of assumptions & constraints
Brainstorming	•    Allows all participants to speak their mind and contribute to the discussion •    Can involve all key stakeholders •    Creative generation of ideas	•    Reąuires attendance of key stakeholders at a workshop, therefore can be difficult to arrange and expensive •    Prone to Groupthink and other group dynamics •    May produce biased results if dominated by a strong person (often management) •    Often not well facilitated •    Generates non-risks and duplicates, reąuires filtering	•    Attendance of representative group of stakeholders •    Commitment to honesty •    Preparation •    Good facilitation •    Use of structure (e.g. categories or RBS)
Cause and Effect (Ishikawa) Diagrams	• Visual representation of project promotes structured thinking	• Diagram can quickly become over-complex	• Effective selection of critical impacts (e.g. by use of sensitivity analysis)