PurposeExternal stakeholder risks (ESRs) caused by unfavorable behaviors hinder the success of project portfolios (PPs). However, due to complex project dependency and numerous risk causality in PPs, assessing ESRs is difficult. This research aims to solve this problem by developing an ESR-PP two-layer fuzzy Bayesian network (FBN) model.Design/methodology/approachA two-layer FBN model for evaluating ESRs with risk causality and project dependency is proposed. The directed acyclic graph (DAG) of an ESR-PP network is first constructed, and the conditional probability tables (CPTs) of the two-layer network are further presented. Next, based on the fuzzy Bayesian network, key variables and the impact of ESRs are assessed and analyzed by using GeNIe2.3. Finally, a numerical example is used to demonstrate and verify the application of the proposed model.FindingsThe proposed model is a useable and effective approach for ESR assessment while considering risk causality and project dependency in PPs. The impact of ESRs on PP can be calculated to determine whether to control risk, and the most critical and heavily contributing risks and project(s) in the developed model are identified based on this.Originality/valueThis study extends prior research on PP risk in terms of stakeholders. ESRs that have received limited attention in the past are explored from an interaction perspective in the PP domain. A new two-layer FBN model considering risk causality and project dependency is proposed, which can synthesize different dependencies between projects.

PurposeComprehensive project portfolio risk (PPR) analysis is essential for the success and sustainable development of project portfolios (PPs). However, project interdependency creates complexity for PPR analysis. In this study, considering the interdependency effect among projects, the authors develop a quantitative evaluation model to analyze PPR based on a fuzzy Bayesian network.Design/methodology/approachIn this paper, the primary purpose is to comprehensively evaluate project portfolio risk considering the interdependency effect using a systematical model. Accordingly, a fuzzy Bayesian network (FBN) is developed based on the existing studies. Specifically, first, the risks in project portfolios are identified from the project interdependencies perspective. Second, a fuzzy Bayesian network is adopted to model and quantify the interaction relationships among risks. Finally, the model is implemented to analyze the occurrence situation and characteristics of risks.FindingsThe interdependency effect can lead to high-stake risks, including weak financial liquidity, a lack of cross-project members and project priority imbalance. Furthermore, project schedule risks and inconsistency between product supply and market demand are relatively sensitive and should also be prioritized. Also, the validity of this risk evaluation model has been proved.Originality/valueThe findings identify the most sensitive risks for guaranteeing portfolio implementation and reveal interdependency effect can trigger some specific risks more often. This study proposes for the first time to measure and analyze project portfolio risk by a systematical model. It can help systematically assess and manage the complicated and interdependent risks associated with project portfolios.

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The successful implementation of project portfolios (PP) calls for effective risk management, in which selecting optimal risk response strategies help to reduce the impact of risk. Project portfolio risks (PPRs) exhibit causality and time dependency over the life cycle, which result in cumulative effects over time. By accounting for these risk correlations, risk response could be more effective in reducing expected losses than risk independence assumption. To support effective and sustainable risk management, this study proposes a novel risk response method that integrates the dynamic Bayesian network (DBN) model and reward–risk optimization model to select risk response strategies for different stages of the PP life cycle. The proposed method supports a more comprehensive analysis of risk contagion paths by opening the black box of the risk propagation paths during the PP life cycle. In this method, the PPRs, as the DBN nodes, are first identified, considering the project’s interdependency. Second, DBN analysis is used to assess PPRs by visually modeling the causality and life cycle correlation among risks. Then, the reward–risk optimization model is built to determine risk response strategies for each stage of the life cycle under the constraints. Finally, the proposed method selects risk response strategies for different stages of the PP life cycle. The findings reveal that the risk response effects are maximized if the risks are responded to in earlier stages. Moreover, the findings contribute to helping managers choose the optimal risk response strategies consistent with the risk response budget. As the effect of the strategy depends on the actual situation of the PP, the factors affecting the response effect of the strategies are recommended for further study.

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