Abstract
An organization’s strategic objectives are accomplished through portfolios. However, the materialization of portfolio risks may affect a portfolio’s sustainable success and the achievement of those objectives. Moreover, project interdependencies and cause–effect relationships between risks create complexity for portfolio risk analysis. This paper presents a model using Bayesian network (BN) methodology for modeling and analyzing portfolio risks. To develop this model, first, portfolio-level risks and risks caused by project interdependencies are identified. Then, based on their cause–effect relationships all portfolio risks are organized in a BN. Conditional probability distributions for this network are specified and the Bayesian networks method is used to estimate the probability of portfolio risk. This model was applied to a portfolio of a construction company located in Iran and proved effective in analyzing portfolio risk probability. Furthermore, the model provided valuable information for selecting a portfolio’s projects and making strategic decisions.
Highlights
A project portfolio is a collection of projects that are managed coordinately to achieve an organization’s strategic objectives [1,2,3]
This paper introduces a framework for portfolio risk analysis that addresses the aforementioned issues and contributes to a clearer and more sustainable decision-making process
Since for studying portfolio risks we focused on portfolio management objectives and portfolio success factors, we stay in line with this approach too
Summary
A project portfolio is a collection of projects that are managed coordinately to achieve an organization’s strategic objectives [1,2,3]. Portfolio success and achieving those objectives is affected by risk [1]. Portfolio risk management can be remarkably effective in a portfolio’s alignment with strategic objectives. Portfolio risk management improves organizational learning and prevents a risk of one project from occurring in other projects. The concept of sustainability, which nowadays is of growing importance, has risk management as one of its recognized ‘impact areas’ [5]. In the field of risk management, there are gaps to be filled before it can provide such benefits [6]
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
