Project Risk Management Paper 1 Essay Example | Topics and Well Written Essays - 1250 words

Project Risk Management Paper 1 - Essay ExampleIt is important to clarify here that lay on the lineinesss can be twain positive and negative. Therefore, we can also situate risk trouble as the act of reducing negative risks while trying to maximize positive risks. The extremity of risk counselling involves determining the outcome of the risk and using it to refine the objectives of the frame, determining loose ends, and thus, improve the effectiveness and efficiency of the overall witness. We can define the process project risk management into several steps, however, organizations usually combine the steps according to ease of use and utility. One of the main objectives of project risk management is to identify the risks with the highest consequences and possibility of occurrence and then develop possible action plans in case any of risk actually occurs (). Progressive elaboration, which improves the managements ability to handle details well also encompasses risk definition as part of its process. Organizations depict different behaviors when it comes to handling risk. Firms that are war-ridden and are in a sustainable leading position in their industry would take up projects that are very risky. Similarly, in such firms project managers with creative, innovative ideas are welcome in spite of the project being risky. On the other hand, risk averse organization who are mostly pursual in their industry would hesitate from taking on risky project and project managers who take on risk and are aggressive in their management approaches would not be welcome here (What is a project, pg14). The initiating, planning, execution, monitoring and controlling, and closing process groups consists of sub-processes that are used throughout the project lifecycle. These are the knowledge areas (Creating the project charter, pg 44). The monitoring and controlling and execution process groups are very high on the risk probability of occurrence whereas the other process g roups have rugged probability (What is a project, pg 29). The nine knowledge areas of PMBOK have been divided in such a way that each one involves whatever amount of integration of the other. Project risk management is core to any project and this is why, it beats with the development of project charter. The project charter is a formal document that authorizes the project to begin working and commit the resources. The project charter involves project statement of work, business case, contract, enterprise environmental factors, and organizational process assets. Each aspect of the project charters involves some form of risk assessment such as under the enterprise environmental factors, a project manager has to assess the risk tolerance of the stakeholders implication the level of risk, the stakeholders of the project and the firm are willing to take for the execution of the project. (Creating the project charter, pg 68). Process of Risk Management We can also define risk as the p roduct of expected consequences of an event or loss and the likelihood of occurrence. Risk could be characterized into two categories Macro-risk and Micro-risk. Macro-risk is consideration of risk for a large creation of events, where as micro-risk deals with risks on an event-by-event basis. Both forms of risk managements are used depending on the situation (Why project risk Management?, pg 2). Macro-risk Management In the insurance and pay industries, risk is calculated using statistical tools data collection, sampling, and data analysis.