External stakeholder risk response strategies selection in project portfolio

Area of Science:

• Project Management
• Risk Management
• Decision Science

Background:

• Effective management of external stakeholder risks (ESRs) in project portfolios (PPs) is crucial but challenging due to inadequate research on response strategies.
• Current approaches often fail to consider the complex interactions between ESRs, projects, and response strategies within a portfolio context.

Purpose of the Study:

• To develop and validate a model for selecting optimal combinations of response strategies for ESRs in PPs.
• To address the limitations in current research by considering interdependencies among risks, projects, and response strategies.

Main Methods:

• Utilized a Bayesian influence diagram (BID) coupled with a multi-objective optimization model.
• Established a probability-sensitivity matrix to identify key ESRs.
• Calculated expected values of response strategy combinations using the BID.
• Integrated stakeholder satisfaction and strategy cost into an optimization model for candidate strategy selection.

Main Results:

• The proposed model successfully identifies key ESRs and evaluates various response strategy combinations.
• It provides a systematic approach to selecting optimal strategy combinations by balancing expected values with stakeholder satisfaction and cost.
• The model demonstrates comprehensive consideration of interactions between risks, projects, and responses.

Conclusions:

• The integrated BID and optimization model offers a robust framework for enhancing ESR management in PPs.
• This approach improves the desirability of project outcomes and contributes to reducing project execution costs.
• It provides a novel method for portfolio-wide risk response strategy selection.