Organizational risk management - The balanced and unbalanced Portfolio

Abstract

Many organizations encounter problems in constructing the organizational risk management from the projects' risks information in a bottom-up approach. The main problem dealing with the bottom-up approach, i.e., to collect the risks values from the projects, and accumulate them to the organization level, is how to reflect both, very high-edge risky projects and "more of the same" projects as well as "Mega" projects and small ones, on the same scale. In this article, we have suggested a new methodology that will give the organization's management this unique view on one chart. It will also help defining the norms of that organization in respect to which projects are within the "normal behavior" (Balanced Projects), and which projects are outside the "normal behavior" (Unbalanced Projects). © 2010 by Moshe Weiler and Yaron Arbetman.