Project Management: Strengths & Weaknesses of Risk Analysis Methods

This report provides a comparative analysis of qualitative and quantitative risk management approaches within the context of project management. It begins by outlining the risk management process, emphasizing the importance of planning, identification, analysis, response planning, and monitoring. The core of the report delves into the strengths and weaknesses of qualitative risk analysis, highlighting its ease of implementation, simple assessment methods, prioritization capabilities, and independence from risk occurrence frequency, while also noting its subjective nature. Conversely, the strengths of quantitative risk analysis are presented as its ability to sort risks by financial impact, express results specifically, and achieve data accuracy, although its complex calculation methods and lack of standardization are identified as weaknesses. The report concludes by noting that qualitative analysis is generally suited for less complex or shorter projects, while quantitative analysis is preferred for more complex or longer projects, such as construction, but also acknowledges that a combination of both approaches can be beneficial for optimal risk management. The document is contributed by a student and available on Desklib, a platform offering study tools for students.

Running head: PROJECT MANAGEMENT
Project Management
Name of the Student
Name of the University
Author Note

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Strengths and weaknesses of qualitative and quantitative Risk Management
Risk management is an important aspect of project management, since appropriate risk
management ensures successful execution of a project. The risk management process includes a
number of planned stages (Bowers and Khorakian 2014.). At first, it is necessary to plan the risk
management process. In this process, the approach of risk management is identified and a plan is
developed for risk management. Followed by this, the risk identification stage is executed. This
is essential since determining the risks that might affect the successful completion of the project
is necessary. After successful identification of the risk, both qualitative and quantitative analysis
of risk analysis is done. After risk analysis, the risk response planning is developed followed by
risk monitoring and control (Taylan et al. 2014). At the end of risk management process, a risk
register is developed for mitigation and resolving the risk.
Both qualitative and quantitative risk analysis is followed in risk management process
and therefore, the strength and weakness of each of the approach is needed to be identified.
Qualitative Risk Analysis
The qualitative approach of risk management is to prioritize the risks identified in the risk
management process so that attention can be directed to the most important risk. The qualitative
risk analysis process is quite flexible and is able to easily identify both threats and opportunities
in the project.
The strengths of qualitative risk analysis approach are as follows-
1. The process of qualitative risk management is easy to implement and in this approach,
the risks can be presented quite efficiently in form of a risk assessment matrix.

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2. The qualitative risk management approach follows very simple assessment methods as
it does not make use of complicated tools or software (Galway 2018).
3. Easy prioritization of risks is possible with qualitative risk management approach. This
is possible because the risks are classified according to its likelihood and impact.
4. One of the major advantages of qualitative analysis is that it does not depend on risk
occurrence frequency.
The main disadvantage of qualitative risk management is that the evaluation of risks and
its results are completely subjective.
Quantitative Risk Analysis
Quantitative risk analysis is a precise risk management process as it considers the
numerical values of each risk components that are identified (Harvard Business Review 2018 ).
The strengths of quantitative risk analysis are as follows-
1. Risks can be sorted by their financial impact
2. In Quantitative analysis, results can be expressed in a specific risk management
process.
3. Data accuracy could be achieved by Quantitative risk analysis method.
The disadvantage of quantitative risk analysis is that the methods of calculation of risk
priority are complex and there is no standard method for execution of this method.
Qualitative risk analysis is generally used for project which are less complex or the
projects of short duration. While quantitative risk analysis is used in more complex projects such

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as construction projects or project of long durations. However, in some projects, both qualitative
and quantitative risk analysis approach is undertaken for better risk management.

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References
Bowers, J. and Khorakian, A., 2014. Integrating risk management in the innovation
project. European Journal of innovation management, 17(1), pp.25-40.
Galway, L. 2018. Quantitative Risk Analysis for Complex Projects. [ebook] Available at:
https://www.rand.org/pubs/working_papers/WR112.html [Accessed 2 Nov. 2018].
Harvard Business Review. 2018 The Olympics as a Story of Risk Management. [online]
Available at: https://hbr.org/2012/08/the-olympics-as-a-story-of-ris [Accessed 2 Nov. 2018].
Taylan, O., Bafail, A.O., Abdulaal, R.M. and Kabli, M.R., 2014. Construction projects selection
and risk assessment by fuzzy AHP and fuzzy TOPSIS methodologies. Applied Soft
Computing, 17, pp.105-116.