Project Management: Achieving Competitive Advantage, Fifth Edition

Summary

1. 7.1 Define project risk. Project risk is defined as any possible event that can negatively affect the viability of a project. We frequently use the equation: $\text{Risk event}=(\text{Probability of event})(\text{Consequences of event)}$. Effective risk management goes a long way toward influencing project development. To be effective, however, project risk management needs to be done early in the project’s life. To quote Shakespeare’s Macbeth: “If it were done, when ’tis done; then ’twere well it were done quickly.”16 As an important element in overall project planning, risk management identifies specific risks that can have a detrimental effect on project performance and quantifies the impact each risk may have. The impact of any one risk factor is defined ...