Khosrowshahi, F (2000) A radical approach to risk in project financial management. In: Akintoye, A (ed.) Proceedings of 16th Annual ARCOM Conference, 6-8 September 2000, Glasgow, UK.
Abstract
In construction, the organisation's structure, activities, functions and the environment under which they operate have become highly complex. Despite significant improvement in the sophistication of business analytical tools, the increasing level of uncertainty has placed risk management in the forefront of business activity. However, there is no clear-cut recipe for risk management. Organisational attitude toward risk varies from one extreme to another. It appears that the general recommendation is that risk should be contained and uncertainties minimised. In this paper the concept of risk is considered from a different perspective. It is argued that while all efforts to minimise uncertainties are justified, business risk should also be considered as an instrument for gaining advantage. The paper examines the above contemplation within the context of project financial management and its relation to an organisation's corporate financial objectives. A forecasting model, developed by the author, is used to apply the above notion to a case-example, as a scenario, to a real past school project. The results suggest that a proactive approach to project financial management can yield benefits to all parties involved in the project.
| Item Type: | Conference Paper (Paper) |
|---|---|
| Uncontrolled Keywords: | cash flow; corporate objectives; financial management; risk |
| Index terms: | risk management, forecasting, cash flow, financial management |
| Subjects: | financial management, risk assessment, economic analysis, prediction and forecasting |
| Topics: | Research Practice, Cost Management, Business Strategy, Risk Management |
| Descriptive scope: | 3 PCA |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here