1. ¹Researcher at RF-Rogaland Research, Stavanger, Norway
2. ²Professor in the Department of Risk Management, University of Stavanger; email terje.aven@uis.no
3. ³Assistant Professor in the Department of Civil Engineering, Texas A&M University

Abstract

Project management is about making decisions under uncertainty, throughout the various phases of a project. Different perspectives on risk can be held by project management, and these perspectives can appear inconsistent and even in conflict. Portfolio theory justifies ignorance of unsystematic risks, for example uncertainties related to the occurrence of an accident, whereas in safety management these uncertainties provide an important basis for investment in safety. In addition, uncertainty management is being applied to control and reduce risks in the various project phases, focusing on unsystematic risks. In this paper we discuss this issue. We show that conflict is based on a lack of precision about the nature of the portfolio theory's constraints, and what the ultimate targets are for obtaining high performance in the project. Risks reflect uncertainties, and managing them is a tool for optimising performance.