| This research project examined the decision-making processes used by design firms when facing uncertainty, analyzed which set of choices lead to above-average performance, and grouped these sets into distinct behaviors and patterns. Predetermined risk management models as they come from other industries could not explain above-average performance in design firms. Through quantitative tests, a 200-firm sample was analyzed and firms in the top 5% were found to exhibit a common set of tactics and choices: risk-taking attitude, expansion to high-growth and high-risk regions, use of alternative delivery methods, and alignment of the risk management method with the firm's distinct goals and strategies were the major drivers of successful risk taking in the design industry.;Moreover, this research project studied a group of firms and provided in-depth explanations of how firms deal with risk through a series of case studies. Ten case studies examined eleven firms and their choices, actions, measures, and tactics when facing the vast array of risks in the design industry. Qualitative analysis findings were explained by the creation of the Risk Positioning Matrix, formed by an internal-to-the-firm vertical axis of service provision and an external-to-the-firm horizontal axis of value chain position. The matrix identifies two sustainable principal positions of firms, the tactical and the innovative.;Findings were consolidated to form the Identify-Select-Align-Sequence-Position model. The I-SASP model is a procedural framework for rational risk taking and strategic planning for design firms, combining analytic processes with decision-making points. The model starts from the firm's market position, identifies its risk exposure, and then composes the firm's optimal risk portfolio. Analytic tools identify risk management mechanisms and control for the firm's strategy alignment with the optimal risk portfolio. Finally, the model provides the best position within the RPM as the project delivery of choice for the design firm's management. |
