Ranking the risk categories in international projects using the TOPSIS method

Abstract

Purpose The purpose of this paper is to review the risk categories which are predominant in international projects and to rank them according to their effect on project success. Design/methodology/approach A literature survey of peer-reviewed journal articles, survey reports and books on project management is used as the research methodology. One among the various multi-criteria decision making methods named as Technique for Order Preference by Similarity to the Ideal Solution (TOPSIS) has been used to rank the risk categories according to their importance. The data for TOPSIS were collected through questionnaire as the research instrument. Findings The findings derived from evaluation of the publications led to the identification of eight different types of risk categories associated with international projects. The TOPSIS method resulted into political risks, technical risks and design-related risks as the top three risk categories in international projects. Contractual and legal risks and fraudulent practices-related risks are relatively low-ranked risk category. Research limitations/implications The findings will be useful in successful implementation of international projects as the knowledge of risk categories and their ranking will help project manager to plan the risk response strategies. A larger sample size for decision makers and more variety of projects can give more exhaustive risk categories and their ranking. Practical implications This paper explores eight different risk categories in international projects. It represents the ranking of risk categories according to their importance in project success. This will be helpful to project managers for developing a general framework for planning the appropriate risk response strategies. Social implications Governments of many countries around the world are encouraging their industries to undertake and successfully complete projects in foreign countries. However, many industries experience failure in projects as they fail to implement the risk management (RM) effectively in international projects. This research work provides the risk categories in international projects and their ranking which can assist in developing strategies to respond the risk appropriately. Originality/value This paper uses the TOPSIS method for ranking major types of risk categories in international projects. It might represent new opportunities for rigorous and relevant research that would contribute to an in-depth knowledge of RM methodologies.

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“…TOPSIS is considered as a simple ranking method in both conception and application, which "attempts to choose alternatives that simultaneously have the shortest distance from the positive ideal solution and the farthest distance from the negative ideal solution" [62]. While the positive ideal solution minimizes the cost criteria and maximizes the benefit criteria, the negative ideal solution minimizes the benefit criteria and maximizes the cost criteria [27].…”

“…Wang and Chang [26] highlighted the concept of TOPSIS permits the pursuit of best alternatives for each criterion shown in a simple mathematical form. Moreover, Dandage et al [27] argued TOPSIS logic is rational and understandable with straightforward computation processes. Normally, decision-makers have to deal with uncertain problems under complex circumstances.…”

Risk management focusing on the best practices of data security systems for healthcare

“…(Abraham et al, 2019;Busdicker & Upendra, 2017;Coronado & Wong, 2014;Dandage, Mantha & Rane, 2018;Kure et al, 2018; …”

An Integrated Potential Assessment Criteria and TOPSIS Based Decision Support System for Road Freight Transportation Routing

“…None of these studies applied the Technique for Order Preference by Similarity to Ideal Solution (TOPSIS) which was introduced by Hwang and Yoon [20] to select the best road freight transportation route. A few of the TOPSIS advantages are a sound logic that represents the rationale of human choice, a scalar value that accounts for both the best and worst alternatives simultaneously, and simple computation processes [21], [22].…”