Strategic Decisions for Project Leaders: Exploiting Risk and Opportunity

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Once project risks are identified and quantitatively analyzed, the project manager needs to make decisions. Having created probabilistic models of project risks, powerful methods of decision science can be brought to bear in making optimal plans and creating contingencies.

While some strategies can be executed concurrently with proactive management, risk can also be transferred or eliminated using carefully-planned strategies. These methods open the possibility of smarter decisions with more risk-neutral tactics that take advantage of capital markets. Financial approaches to transferring risk by insurance, catastrophe bonding, and other mechanisms is a poorly understood but efficacious method for dealing with unique risks on large and potential consequential projects.

By leveraging the appropriate tools for estimation using Bayesian thinking, classical utility theory, and behavioral economics, the project management executive or project owner can exploit risk to their advantage. The opportunities for construction firms, facility managers, municipal governments, and investors is enormous and growing.

What you will learn

● Project decision making considering risk aversion and utility, calculating risk premiums using quantitative project risk models.

● Risk transfer via insurance and re-insurance. What are insurance and re-insurance and why can project managers use insurance, bonds, and other financial instruments?

● How to transfer risk and reduce transaction costs? How much should the PM pay to transfer risk?

● What is Alternative Risk Transfer (ART), including insurance-linked securities, risk pools, resilience bonds, and other instruments, and how can projects make use of them?

● What are catastrophe (CAT) bonds? When and where are they most useful?

Skills you learn

• Economics
• Management
• Utility Theories
• Decision-Making Software
• Decision Theories
• Strategic Decision-Making
• Project Risk Management

Syllabus

Week 1: Decision Making

Week 2: Risk Aversion and utility theory

Week 3: Risk Transfer via Insurance

Week 4: Re-Insurance industry

Week 5: Cat Bonds and alternative risk transfer

Auto Summary

Unlock the power of decision science with "Strategic Decisions for Project Leaders: Exploiting Risk and Opportunity." This 13-week course, led by edX, dives into advanced risk management techniques using probabilistic models and financial strategies. Ideal for project managers, construction firms, facility managers, and investors, it offers professional insights into making optimal plans and leveraging capital markets for smarter, risk-neutral decisions. Enhance your strategic decision-making skills through Bayesian thinking, utility theory, and behavioral economics. Available via professional subscription, this course is perfect for those looking to excel in business and management.