2.9 Risk-Diagnosing Methodology

Johannes Halman

University of Twente, Faculty of Engineering Technology, Department of Construction Management and Engineering, P.O. Box 217, The Netherlands

2.9.1 Introduction

This chapter introduces risk-diagnosing methodology (RDM), which aims to identify and evaluate technological, organizational, and business risks in new product development. RDM was initiated, developed, and tested within a division of Philips Electronics, a multinational company in the audio, video, and lighting industry. Also Unilever, one of the world's leading companies in fast-moving consumer goods, decided to adopt and implement RDM on a worldwide basis. Since its initiation, RDM has been applied to new product development projects in areas as diverse as the development of automobile tires, ship propellers, printing equipment, landing gear systems, lighting and electronic systems, and fast-moving consumer goods in various industries in Germany, Italy, Belgium, the Netherlands, Brazil, China, and the United States. RDM proved very useful in diagnosing project risks, promoting creative solutions for diagnosed risks, and strengthening team ownership of the project as a whole (Halman and Keizer, 1994; Keizer, Halman, and Song, 2002).

2.9.2 Requirements for an Effective Risk Assessment

The true nature of project risk is determined not only by its likelihood and its effects, but also by a project team's ability to influence the risk factors (see e.g., Keil et al., 1998; Sitkin ...

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