The Concept of Risk Essay Example | Topics and Well Written Essays - 2000 words

The Concept of Risk - Essay Example The occurrence of an undesirable event is known as risks and risk management is a subject of great importance in project management. The risks which occur in project management is objectified and often occurs in the form of monetary loss and there is always an uncertainty associated with the occurrence of risk, however, the results of a risk are always undesirable for the people and organizations involved in the project. Project Risk Management has become a very important field of study in recent years because the project costs are very high these years and substantial capital is involved in the execution of the projects. Moreover, monetary loss is not the only issue, the time constraint has become much more important in the current economic and political scenario and the uncertainties in the execution of the project can delay the completion of the projects. These delays can result in fines and heavy penalties and can also affect the execution of other associated projects, therefore it is imperative to analyze and manage risk properly. Some authors also include the risk of life in risk assessment associated with a project, however, in this essay, it will not be discussed as a risk in project management because it is more relevant to health and safety issues. Thus there is a general consensus among the authors regarding the definition and concept of risk in project management. A risk is always an uncertainty in the execution of the project with a little probability of occurrence.... has become a very important field of study in recent years because the project costs are very high these years and substantial capital is involved in the execution of the projects. Moreover monetary loss is not the only issue, the time constraint has become much more important in the current economic and political scenario and the uncertainties in the execution of the project can delay the completion of the projects. These delays can result in fines and heavy pnealties and can also affect the execution of other associated projects, therefore it is imperative to analyse and manage risk properly. Some authors also include the risk of life in risk assessment associated with a project, however in this essay it will not be discussed as risk in project management because it is more relevant to health and safety issues (Jeynes, 2002). Thus there is a general consensus among the authors regarding the definition and concept of risk in project management. A risk is always an uncertainty in the execution of the project with a little probability of occurrence, however if occurs it always has undesirable result. Risk Management is always carried out in five steps: 1. Identification 2. Analysis 3. Resolution 4. Implementation 5. Monitoring Risk in PRINCE2 PRINCE2 is a process driven project management method and thus the management of a project as per PRINCE2 is carried out in steps. It gives ultimate liberty to the project management team to control and neutralize risks in project management. According to PRINCE2 risk is an uncertainty in the outcome of a project, this uncertainty is a two way pehnomenon, it can be a positive opportunity or a negative threat. Thus all the unclear outcomes of a project are termed as risk in PRINCE2 method of project management (Bentley, 2005).