Project Risk Management Concepts

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“The essence of risk management lies in maximizing the areas where we have some control over the outcome while minimizing the areas where we have absolutely no control over the outcome”. (Peter L. Bernstein)
Risk in Project Management
1. It is per se unanimously accepted fact that all projects, regardless of size or subject matter, tend to have some level of risk. Risk can include anything that may threaten the goals, objectives or deliverables of a project. No matter how well a project has been planned to cater any risk that could impact the project, yet risks could prevail in any phase of the project. Hence,
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Risk can be defined as, “a problem that has not yet happened but which could cause some loss or threaten the success of the project if it did” . Risk is the probability of something (hazard) happening. "Hazard" is in fact an event that could cause harm. Therefore, all future hazards that may appear during the project life cycle are required to be protected. It is for this reason that, it is not only important to know the risks but to find solution for each possible (most probable) scenario to cater any chances of failure. For simplification the project risk processes can be divided into following two constituents or…show more content…
Project Risk management is the heart and soul of project management. If failed to apply in the right direction it can have dire consequences on successful completion of any project. Though the risks are usually identified, categorized and evaluated during the initiation and planning of the project, however the chances of risks actually increases during the execution phase of the project. Thus when the projects are handed over to project directors or managers it is essential that risks have to be re-evaluated and categorized. Categorizing risks is a way to systematically identify the risks and provide a foundation for awareness, understanding and elimination of such risks. However, the biggest dilemma for most project managers is how to manage the risks on its arrival? Sadly, no evaluation is carried out to determine the expertise, experience, capabilities of their team that would be required to deal with or manage those risks, on its occurrence. Too often the responsibility for risk identification, assessment and management, are left to the project team, especially once the project has started. However, the onus of responsibility should be controlled by the project manager himself as being the leader. Moreover, each one has a responsibility, to a greater or lesser degree in managing the risks associated with the
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