Risks are a common day to day phenomena and in projects the risks exist too. Assessing risks on a project helps to ensure good flow of the project that will translate to its success. In other words, risk assessment helps in managing the risk. Risk management is a method of controlling the uncertainties in a project, that is, anything that may stop the project from achieving its goals. The aim of risk management is to minimize uncertainties and ensure that the project is delivered on time. Project and risk managers must allocate resources to mitigate those risks with a high probability of occurrence. The gain from the use of these resources should exceed any consequences of inactivity. A successful project manager is one who plans ahead for the unexpected and assesses the possible impact future risks can have on the overall project. In assessing the risk, it is important to identify events that could happen throughout the life of the project that would adversely impact it. An adverse effect is one that would cause the project to come in over budget, miss the deadlines or fail altogether. These project risks can come from a broad range of factors, including human, operational, reputational, procedural, natural, financial, technical, political and others. An operational risk, for example, could be how a disruption in supplies would impact the project, while a natural risk could stem from a natural disaster (Wickford, 2015).
Risk assessment tool
Risk assessment tools help in assessing the extent of the risk and provide ways through which the threats can be managed. The porters five force model is one tool that can be used to assess and manage risks in projects. Supplier power in the model l...
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...roject. The high risks are also crucial but no as much as extreme ones. However, they are still a high threat and immediate action should still be taken on them. The medium risks do not pose a very high threat and there is usually no hurry in their mitigation. The low risks do not pose any significant danger to the project and the management can choose to ignore them.
Duff,V.(2015). Risk Management Tools & Techniques
Grundy, T. (2006). Rethinking and reinventing Michael Porter 's five forces model. Strategic Change , 15(5), 213- 229.
Johnson, G., Scholes, K., & Whittington, R. (2008). Exploring corporate strategy: text & cases . Pearson Education.
Porter, M. E. (1979). The structure within industries and companies’ performance. Review of Economics and Statistics , 61(2), 214- 227.
Wickford, H.(2015). How to Assess Risk in a Project
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