CIVL4170-2025-S1-Week01-Lecture 2 - what is risk and why is it important - lectures slides

Course Overview

  • Course Title: CIVL4170: Risk Analysis in Civil Engineering

  • Lecture: Lecture 2: What is risk and why is it important?

  • Instructors: A/Prof Ilje Pikaar and Prof. William Clarke

  • Semester Info: Week 1 - Semester 1, 2025

Lecture Structure

  • Discussion Topics:

    • Definition of risk and types of significant risks (15 min)

    • Essentials of risk management for effective professional practice (20 min)

    • Assessment of existing knowledge and identification of knowledge gaps (15 min)

Defining Risk

Understanding Risk

  • Definition: Risk is the effect of uncertainty on objectives (according to AS ISO 31000:2018 - Risk Management Guidelines).

    • Effect: Deviation from the expected, which can be positive or negative.

    • Objectives: Vary in aspects such as financial, health, safety, and environmental, applicable at different levels (strategic, organization-wide, project, product, process).

    • Uncertainty: A state of lack of information or knowledge concerning an event and its potential consequences or likelihood.

Characterizing Risk

  • Risk Characteristics:

    • Often described in terms of potential events and their consequences, combined with likelihood of occurrence.

    • Expressed as a combination of the predicted severity of consequences and probability of the event.

Importance of Risk Management

  • Essential Knowledge for Graduate Engineers:

    • Collaborate in groups to conceptualize what is necessary for successful risk management.

    • Develop a coherent representation/model for presentation.

Identifying Knowledge Gaps

  • Self-Assessment:

    • Reflect on existing knowledge about risk and identify main gaps.

Course Scope

Key Areas of Focus

  • Risk Management Objectives:

    • Stakeholder & Reputation Risk Management

    • Sustainable Operational Excellence

    • Professional Practice

    • Safety & Health

    • Environmental Impacts

    • Supply Chains

    • Financial Performance

    • Projects/Contractors

    • Cybersecurity

    • Social Impacts

Main Activities

  • Key Activities in Risk Management:

    • Identify, assess, and treat risks.

    • Monitor and review risk management processes.

Types of Knowledge

Aristotle's Insight

  • Practical Wisdom: Knowledge of what is right or best for specific circumstances, pivotal in making informed decisions.

    • Professional Practice Definition: Making decisions amidst incomplete knowledge and managing uncertainties effectively, crucial to professionalism.

  • Goal: Enhance understanding of risk in civil engineering and ability to utilize risk management tools to resolve related challenges.

Lecture Summary

  1. Risk Definition: "Effect of uncertainty on objectives" (different priorities for different stakeholders).

  2. Risk Dimensions: Includes both downside threats and upside opportunities; proactive addressing of both is crucial.

  3. Two Key Dimensions: Risk involves understanding probability (frequency) and impact (consequence).

  4. Zero Risk Concept: Achieving zero risk is impossible; risk-taking is necessary, but should be proportional to expected return.

  5. Perception of Risk: Understanding risk is subjective, influenced by personal perceptions of uncertainty and significance.

  6. Relevance to Career: Risk identification and management is integral to engineering practice across design, construction, and operational phases.

Conclusion

  • Solid understanding of risk is essential for a successful career in engineering, reinforcing the need to engage with and study these concepts.