Application of System Dynamics in Environmental Risk Management of Project Management for External Stakeholders

Environmental risks arise from external forces that can easily render a project out of management control. Project managers who want to avoid external-force effects must understand the problems between the project and possible external stakeholders. Most traditional risk-management techniques are used to create a list of identified risks based on the experiences and opinions of experts or kernel members such that the relationship between risks or the feedback characteristics are impossible to discover. System dynamics (SD) can use dynamics and feedback to assist decision makers in understanding the structure and characteristics of a complex system. Therefore, this study applies SD to propose a 7-step process for solving an environmental risk management problem systematically, and efficiently. This process enables project managers to reduce the negative effects of project threats. Finally, this study conducts a simplified case study of an industrial area development project to present the viability of the proposed methodology.