A User's Manual to the PMBOK Guide, Fifth Edition

Chapter 11

Planning Risk

TOPICS COVERED

Project Risk Management

Plan Risk Management

Identify Risks

Perform Qualitative Risk Analysis

Perform Quantitative Risk Analysis

Plan Risk Responses

Project Risk Management

Project Risk Management includes the processes of conducting risk management planning, identification, analysis, response planning, and controlling risk on a project.

Because projects are unique in nature, there is much more uncertainty in a project than there is in regular operations. Risk is rooted in uncertainty—the more uncertainty, the more risk. Organizations have different perspectives about risk and how much risk they are willing to tolerate. Organizations may be willing to tolerate or accept a greater amount of financial risk if it will reduce the amount of quality or schedule risk. Therefore the risk tolerance for various project objectives is specific to the particular organization and the specific project.

Risk. An uncertain event that, if it occurs, has a positive or negative effect on one or more project objectives.

Opportunity. A risk that would have a positive effect on one or more project objectives.

Risk Tolerance. The degree, amount, or volume of risk that an organization or individual will withstand.

Based on the previous definitions you can understand how risk management is about influencing factors that reduce or eliminate negative risks, and ...