project risk management essay

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Project Risk Management Essay Examples

Type of paper: Essay

Topic: Risk , Business , Management , Risks , Risk Management , Company , Effectual , Management Plan

Words: 1300

Published: 03/30/2023

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Introduction

Effectual Real Estate Holdings Ltd. is a medium level Real estate management company. The company is multi-faceted in the way it conducts business. The main business activity involves agency work wherein, the company receives contracts on rent collection on a monthly basis. Additionally, apart from rent pooling, Effectual Holdings is also involved in construction work; building of apartments and other mid-class rental premises. All of the services provided by this company are purely contractual except for the case where the company is undertaking developmental work on its own accord. Effectual Holdings has been known for its continuous delivery of high quality work as well as selflessness and diligence in its services to the clients. Effectual Holdings is also in the microfinance business, however, this is on a much smaller scale comparative to the other two business activities it is involved in. The company funds small businesses and aspiring entrepreneurs with a startup capital, which is then repaid at a certain interest. The entire business realm of Effectual Holdings primarily focuses on small to medium enterprises (SMEs) and therefore, the total annual revenue circulated in the company’s activities is relatively average. The growing client base of Effectual Holdings serves as proof of thriving business for this company and with a recent surge in employee head count from 75 to 100, it shows that the grass is greener for the company’s future perspective. Additionally, with respect to the conventional parametric categorizations of a business, the 100-employee mark is a great leap for Effectual Holdings from small to medium-sized. However, there exists a catch in terms of the employment base in this company. 100 is the number of permanently employed workers at Effectual Holdings. Considering that it is also a construction company, craftsmen are frequently hired upon new contracts. Hence, the employee base at its maximum can harbor close to 200 employees. Currently, Effectual Holdings has signed a two year contract with Globud Car Dealership Company for the construction of their three-story business center. Upon completion, Globud will renew the contract for a second phase whereby Effectual Holdings shall oversee the rent collection and publication of an annual gazette outlining the trend of other services in and around the Globud business premises e.g. trash collection, maintenance activities etc. This paper seeks to indulge on a comprehensive analysis of the risk management goings-on of Effectual Holdings with respect to this on-going contract with Globud Company.

Risk Management Strategy and Plan

This is an array of tools i.e. procedures and undertakings that work towards risk management. That is, a risk management strategy should have a top to bottom breakdown of all the existent risk factors in a business’s environs, and brisk undertakings that seek to alleviate if not totally remove these risks. A risk management strategy takes off starting from a plan. This plan is the risk management plan. Each and every form of business is exposed to a countless number of risks. In this strength, therefore, there should exist a well laid out risk management plan. The broadness of the risk management plan is determined majorly by the size of a business. For Effectual Holdings, a 20-page risk management plan should suffice. It will focus on the major risk factors and methods of countering them. In any risk management plan, there must be a set of conventional provisions, regardless of the size or nature of the business. These are:

Identification and enlisting of risks

ranking of each risk in terms of its probability of occurrence and extent of damage breakdown of the existing risk counteraction parameters plan of action

Risk Identification

This is always the first step in formulating a risk management plan. Appreciating the latitude of conceivable risks aids in the development of accurate, economical stratagems for countering the identified risks. It is usually considered good practice to think largely while analyzing the natures of risks that a business such as Effectual Holdings is susceptible to. This gives better footing as opposed to evaluating the obvious kinds of risks e.g. fire, natural disasters, theft, etc.

Assessing the business

The first step in risk identification is analysis of the business. This is reflected upon along the lines of precarious business activities that oftentimes take place, including the main services, capitals and workforce. Also, things that might affect these key activities, like power failure or natural calamities must be taken into account. Business assessment assists in eventual summarization of the aspects that are totally crucial.

Methods of Risk Identification

Once there is a vivid framework describing what business activities need to be considered, the identification process thus begins. The best approach at this is always to prepare a self-analyzing questionnaire whereby the business will ask themselves some questions and try to envision the way out.

Analysis and Evaluation of risk impacts

After risk identification, it is required that the established risks be analyzed and evaluated. This is done so as to obtain a ranking in terms of the possible impact caused by the risks. The trivial risks are segregated from the more impactful ones.

Risk Responses Strategy

Avoidance: this method eliminates the causative factor to the actual risk. Transfer: Involves literally transferring the risk overhead to another party e.g. purchasing an insurance for a project so that when it succumbs to any of risk factors, the insurance company shall be held accountable. Mitigation: This method has two approaches: alleviate the possibility of the risk occurring, or alleviating the negative impact of the risk after it has already occurred. Each of the two approaches has its own strategy.

Risk Responsibility Plan

Oftentimes, most if not all of a project’s stakeholders are responsible for risk handling in case one occurs. However, the most burden in terms of accountability befalls the project manager while other partisans like the designers, initial risk owners etc. are simply consulted.

Risk Monitoring and Control

Risk Monitoring Control is the process of staying up to date with the risks identified, as well as observing the lingering risks as well as new ones. It also involves ensuring proper execution of risk management plans and monitoring their efficacy in risk alleviation. It is carried out through response audits, risk reviews, technical performance reports and risk response plans.

Risk Work Breakdown Structure

This is an ordered projection of the risks identified, organized in their respective categories. Risk Communication Strategy Involves the processes of preparation, onset, control, recovery and evaluation of risk communication. Risk treatment Treating risks comprises of analyzing all the options to deal with deplorable perils to the business. Deplorable risks vary in severity; some need immediate undivided attention and treatment while others can be supervised and treated in future.

Review and Updation of Risk Management Plan

There is always need to carry out an assessment, evaluation and subsequent updation of the prepared risk management plan as regularly as possible. This is owing to the fact that risks are dynamic and can also impact change upon the business. Frequently revising the risk management plan is indispensable when it comes to identifying fresh risks and observing the efficacy of the risk treatment stratagems.

Business Impact Analysis

This is the grand scheme of risk management and it involves undertaking an analysis geared towards establishing the probable impact of the risks considered, in the wellbeing of the operations of the business.

Reamer, F. G. (2000). The social work ethics audit: A risk-management strategy. Social Work, 355-366. Tjoa, S., Jakoubi, S., & Quirchmayr, G. (2008). Enhancing business impact analysis and risk assessment applying a risk-aware business process modeling and simulation methodology. In Availability, Reliability and Security (pp. 179-186). IEEE.

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Chapter 11 Project Risk Management Essay

It project management (cit 4853), arkansas state university, recommended for you, students also viewed.

• Doc4 - It Project Management
• Chapter 11 Project Risk Management TF
• Chapter 10 Project Communications Management TF
• Chapter 10 Project Communications Management Completion
• Chapter 8 Project Quality Management TF
• Chapter 6 Project Schedule Management Completion

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• List and briefly describe the major processes involved in risk management. ANSWER: Planning risk management involves deciding how to approach and plan risk management activities for the project. The main output of this process is a risk management plan.

Identifying risks involves determining which risks are likely to affect a project and documenting the characteristics of each. The main outputs of this process are a risk register, risk report, and project documents updates.

Performing qualitative risk analysis involves prioritizing risks based on their probability of occurrence and impact. After identifying risks, project teams can use various tools and techniques to rank risks and update information in the risk register. The main outputs are project documents updates.

Performing quantitative risk analysis involves numerically estimating the effects of risks on project objectives. The main outputs of this process are project documents updates.

Planning risk responses involves taking steps to enhance opportunities and reduce threats to meeting project objectives. Using outputs from the preceding risk management processes, project teams can develop risk response strategies that often result in change requests, updates to the project management plan and project documents.

Implementing risk responses, just as it sounds, involves implementing the risk response plans. Outputs include change requests and project documents updates.

Monitoring risk involves monitoring identified and residual risks, identifying new risks, carrying out risk response plans, and evaluating the effectiveness of risk strategies throughout the life of the project. The main outputs of this process include work performance information, change requests, and updates to the project management plan, project documents, and organizational process assets.

DIFFICULTY: Difficulty: Moderate

REFERENCES: p-

QUESTION TYPE: Essay

HAS VARIABLES: False

LEARNING OBJECTIVES: INFO.SCHW.14 - LO: 11-

NATIONAL STANDARDS: United States - BUSPROG: Analytic

TOPICS: The Importance Of Project Risk Management

KEYWORDS: Bloom's: Comprehension

DATE CREATED: 4/27/2018 3:52 PM

DATE MODIFIED: 6/7/2018 1:05 PM

• List and briefly describe four methods for identifying risks. ANSWER: Brainstorming: technique by which a group attempts to generate ideas or find a solution for a specific problem by amassing ideas spontaneously and without judgment. This approach can help the group create a comprehensive list of risks to address later in the qualitative and

quantitative risk analysis processes. An experienced facilitator should run the brainstorming session and introduce new categories of potential risks to keep the ideas flowing. After the ideas are collected, the facilitator can group and categorize the ideas to make them more manageable.

Delphi technique: approach to gathering information that helps prevent some of the negative group affects found in brainstorming is the Delphi Technique. The basic concept of the Delphi Technique is to derive a consensus among a panel of experts who make predictions about future developments. The Delphi Technique uses repeated rounds of questioning and written responses, including feedback to earlier-round responses, to take advantage of group input, while avoiding the biasing effects possible in oral panel deliberations. To use the Delphi Technique, you must select a panel of experts for the particular area in question.

Interviewing: fact-finding technique for collecting information in face-to-face, phone, e- mail, or instant-messaging discussions. Interviewing people with similar project experience is an important tool for identifying potential risks.

Root cause analysis: used to identify the root cause of a problem or opportunity; often results in identifying even more potential risks for a project.

SWOT analysis: analysis of strengths, weaknesses, opportunities, and threats, which is often used in strategic planning; used during risk identification by having project teams focus on the broad perspectives of potential risks for particular projects. Applying SWOT to specific potential projects can help identify the broad risks and opportunities that apply in that scenario.

TOPICS: Identifying Risks

• Explain decision trees and expected monetary value. ANSWER: A decision tree is a diagramming analysis technique used to help select the best course of action in situations in which future outcomes are uncertain. A common application of decision tree analysis involves calculating expected monetary value. Expected monetary value (EMV) is the product of a risk event probability and the risk event’s monetary value. To create a decision tree, and to calculate expected monetary value specifically, you must estimate the probabilities, or chances, of certain events occurring. Probabilities are normally determined based on expert judgment.

To calculate the expected monetary value (EMV) for each project, multiply the probability by the outcome value for each potential outcome for each project and sum the results. Because the EMV provides an estimate for the total dollar value of a decision, you want to have a

TOPICS: Performing Quantitative Risk Analysis

KEYWORDS: Bloom's:Comprehension

• What are the basic response strategies for negative risks? Describe each strategy. ANSWER: Risk avoidance or eliminating a specific threat, usually by eliminating its causes. Of course, not all risks can be eliminated, but specific risk events can be. For example, a project team may decide to continue using a specific piece of hardware or software on a project because they know it works. Other products that could be used on the project may be available, but if the project team is unfamiliar with them, they could cause significant risk. Using familiar hardware or software eliminates this risk.

Risk acceptance or accepting the consequences should a risk occur. For example, a project team planning a big project review meeting could take an active approach to risk by having a contingency or backup plan and contingency reserves if they cannot get approval for a specific site for the meeting. On the other hand, they could take a passive approach and accept whatever facility their organization provides.

Risk transference or shifting the consequence of a risk and responsibility for its management to a third party. For example, risk transference is often used in dealing with financial risk exposure. A project team may purchase special insurance or warranty protection for specific hardware needed for a project. If the hardware fails, the insurer must replace it within an agreed-upon period of time.

Risk mitigation or reducing the impact of a risk event by reducing the probability of its occurrence. Suggestions for reducing common sources of risk on information technology projects were provided at the beginning of this chapter. Other examples of risk mitigation include using proven technology, having competent project personnel, using various analysis and validation techniques, and buying maintenance or service agreements from subcontractors.

Risk escalation or notifying a higher level authority. If the risk is outside of the scope of the project or the proposed response is outside of the project manager’s authority, it would make sense to escalate the risk to a higher-level manager within the organization.

REFERENCES: p.

TOPICS: Planning Risk Responses

• Multiple Choice

Course : It Project Management (CIT 4853)

University : arkansas state university.

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The Risk Management Process

Introduction, overview of risks management, risk management in a new project, identifying and defining risks, evaluating the risks, risk control, reference list.

Success in business entails making the best decision at all opportunities.

When entering a business an investor is hopeful that the business will be successful, grow and give good returns on investments. However, the ability to evaluate the risk involved in the business, understand and manage the risk is very important. The business environment sometimes seems obvious but various risk variables may be involved. The ability to identify the risks involves helps a company to be prepared for the risk or evade the risk. Implementing a new project for a non-financial company may be challenging but proper approaches in identifying, measuring and managing the risk can be very helpful.

Risk management is part of the process of projects appraisal, implementation and management. In essence, Risk management involves identifying the risks involved in a project, analyzing the risks, planning for implementation of a project and managing the risks involved. Risk management involves a proactive approach that preempts the potential risks for managing a project (Glenn, 2000, p107). Risk management also involved reactive planning, identifying triggers, controlling the risks, risk monitoring and use of computer simulations for risk management.

Risk management is part of projects implementation and management. Each project has potential risks and opportunities that should be evaluated before and in the process of implementing a project. Risks are not always bad to a company. Some risks can help a company to identify other opportunities that could be very important to the company. The process of identifying the risk is important in implementing a project. The process can help the people involved in the new project to have in-depth knowledge of the company’s business, identify challenges in the area of business, evaluate other companies in the same business and build cohesion among themselves (Abkowitz, 2008, p56). Sometimes the feared risks are not as great as assumed and sometimes the risks are not real. Risk assessment and management, thus help the management to be ready for eventuality or possibilities.

Implementing a new project is usually a challenge. A new project may lead to success to a company or lead to failure. In business, it is expected that any investment should be able to bring returns on the resources invested. Since resources are scarce, taking blind chances is usually not a good decision. Instead, investors prefer to evaluate a prospective project to make the best decision to their investment plan. Project appraisal in project management helps to evaluate various variables that can influence success of a project. Risk management is one of the most important steps in project appraisal.

The risks involved in a new project differ from one project to another. For example, the risks involved by a financial company may differ completely to risks in non-financial company. Although some companies may be involved in similar businesses, the risks involved in individual company may differ in a bigger way (Royer, 2001, p41). In addition, risks involved in a project are not stagnant. The dynamic nature of risks calls for continuous evaluation of the risk and proper response to the risks from time to time.

Risk identification step is the basic step in managing risks. In this step, the risks involved in a project are identified through various approaches. The aim of risk identification step is to have a clear understanding of the potential risks in a project. As the initial step in managing risk, failure in this step can lead to failure in the whole process of risk management. Ability to define a risk is considered as a major step in managing the risk.

Risk management is broader than trying to avoid risks but an approach that optimize a given context despite of the risks. For this reason, risk identification and deification does not aim at scaring away a company from a project but prepare it for the risks. Systematic ways of identifying risks is the most preferred approach. This methods offer logical means of evaluating a business environment or a new project for the possible risks.

It is appropriate that a business should be able to identify the risks that it faces. Various systematic approaches are used to identify the risks involve. Approach such as risk checklist, questionnaires, analysis of financial statement, analysis of company’s operations and workshops are some of the approaches in identifying risks. Organized collective approach to risk identification is also important in risk management.

The success of risk management falls more on the ability to know the risks (Chris & Stephen, 2002, p113). A new project may bring in new risks and opportunities to a company. The ability of the project planner to identify the risk helps in identifying the most appropriate approaches to handle the risks. There is no doubt that risk identification is the most important step in managing risks; success in the other steps fully depends on it. The scenario where risks that were not identified happen would lead to failure of the project. Risk control that is necessary to mitigate or avoid risks in a project cannot be applied to risks that are not initially identified. Risk identification process has the objective of identifying the risks in an effective way.

One view to risk identification is to let an individual such as project leader or project management make the identification. This view leaves this responsibility with a project manager while other people involved in the project are not involved. Some project managers prefers this approach with believe that as the most senior individuals in a project, they are in a better position to know the risks that can affect the projects (Royer, 2001, p31). This approach has advantages but also its limitations. When one individual is involved in risk identification, he or she would be able to identify the risk faster than when more than one person is involved (David, 2003, p89). On the other hand, an individual may not be able to have in depth knowledge of all aspects of the project. In this case, the individuals may not be able to identify all potential risks that can affect a project. There is also possibility of bias in the risks identified due to the individual’s bias.

The responsibility of identifying the potential risks to the new project should be collective. The project team as a group has a wider view of the risks that can affect the new project. By sharing the information through systematic ways, the risks involved would be identified easily leading to higher possibility of success of the project. Brainstorming among project team help expose the potential risks.

Although brainstorming would be good approach to identifying risks, there are certain requirements that should be fulfilled. All members in the brainstorms should feel comfortable to express their thoughts without criticism; there should be enough time every one and rush conclusions should be avoided.

Although, risk identification is an important step in managing risks to the new project, failure to measure the risks may lead to failure of the process. The new project may have various different risks. For example, the risk may include stiff competition, technology change, bad weather or unresponsive market (Bilal, 2003, p57). All the risks involved should be able measurable. The popular approach to measuring risk is classifying the risks depending on their nature and their effects to the project. Other approach attempts to offer quantitative of qualitative values to the risks. The value offered a risk shows the nature of the risk, urgency and the effort that should be applied on the risk.

Occurrence of a risk is a probability. The risks are events or occurrence that can happen or not. With this in mind, the frequency of risks identified is determined as a way of determining the probability for occurrence of a risk (Culp, 2001, p27). A part from the frequency of a risk, the magnitude of the risks identified should be determined. Risks involved in a new project may vary in nature and magnitude. For example, the risks involve in the new project may involve resource, operational, financial or market risks. These risks have both frequency and magnitude variable. The likelihood for occurrence of each risk in evaluated to come up with an estimate of the chance for the risk to occur (Evin, 2000, p44). The other variable, magnitude, is very crucial in decision-making. The magnitude of the risk determines the effect of the risk to the company in event of occurring. For example, the financial risk could be evaluated in terms of dollar or percentage over investment. This information helps the decision maker to decide whether to avoid the risk in the new project or control it.

Three major steps are involved in assessing the risks involved in the new project. First, the risks are prioritized according to the probability and magnitude. The risks are then compared to find out how they differ or have in common. Finally, cost/benefit analysis is used to determine the cost of the risks as compared to the benefit to the company.

The process assigns a value or rating to the risk identified. The rating helps to compare every risk with the other risks and give a quick for making decisions over the risks. Quantitative indexing is preferred to qualitative assessment (Turner & Gelles, 2003, p89). Quantitative ranking could be used to create cross reference matrices for all the risks involved in the new project. From the matrices, the risks can be categorized according to their effect on the project, for example, the classes may include minor, intermediate or severe. Such classes give a quick ways of making decision over the risks.

Assessment of project risk can suffer from oversimplification. The qualitative approach to assessing the risks may seem to be easy but may lead to over simplification of the risks. For example, a risk that is classified as moderate does not contain features that are unique to it. On the other hand, use of quantitative method gives more details but is more complex. Numeric values and probability distribution are use in quantitative assessment.

For the new project to be successful, risk identification and assessment is not complete. Risk control is the step that has direct effect on successful risk management. Risk control is used to mitigate the effects of the identified risks according to the risk assessment (Graham & Kaye, 2006, p71). Successful use of risk control counters the risks and increases the chance for the project to be successful. In addition, risk control measure offer guideline to handle similar risks in the future.

Risk control can involve threat reduction, failure prevention, consequence mitigation, probability reduction and vulnerability reduction. Risk control depends on the project and the risk involved. In practice, the company can move from risk identification to control but this is not advisable (Graham & Kaye, 2006, p91). Risk assessment helps to decide on the resources that should be used in risk control. In risk control, the company may decide to avoid the risk, reduce risk, transfer the risk to another body or absorb the risk through contingency plans.

Risk management is very important in project planning and implementation. As a company plan to implement a new project, the project may encounter various risks. Risk management in such a project will involve risk identification and definition, risk assessment and risk control. Techniques in risk identification help to point out the possible risks to the project. Risk control on the other hands uses the information in risk identification and assessment to mitigate the risks.

Abkowitz, D. 2008. Operational Risk management: A Case Study Approach to Effective Planning and Response . John Wiley and Son. New York.

Bilal, M. 2003. Risk Analysis in Engineering and Economics . Chapman &Hall/CRC. New York.

Chris, C. & Stephen, W.2002. Managing Project Risk and Uncertainty . Wiley & Sons, Ltd.

Culp, W. 2001. The risk management process: business strategy and tactics . John Wiley and Sons. New York.

David, T., 2003. Project Success Through Project Risk Management. Pricewaterhouse Cooper. Nils, B., Bent, F. and Werner R.2002. Big Decisions, Big Risks. Improving Accountability in Mega Projects. Transport Policy, Vol. 9 Issue 2.

Evin, J.2000. Project Risk Management: Perception and Reality , Galorath Incorporated Internet.

Glenn, K. 2000. Risk Modeling for Determining Value and Decision Making . Chapman & Hall/CRC.

Graham, J. & Kaye, D. 2006. A Risk Management Approach to Business Continuity: Aligning Business Continuity with Corporate Governance. Rothstein Associates Inc. London.

Royer, P. 2001. Project risk management: a proactive approach . Management Concepts. Manchester UK.

Turner, J. & Gelles, M. 2003. Threat assessment : a risk management approach. Routledge. New York.

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Risk Management in Project Management Proposal Essay

Introduction, research issues.

The successful implementation of a project is widely dependent on the risk management. A poorly planned project may result in loss of resources and can even lead to quitting of some of the members. Project managers need to do risk planning in order to identify potential problems that might hinder the success of your project.

They should also evaluate the probability of a problem arising and the actions that should be taken to diminish the risks that cannot be avoided and avert those that can be avoided. Risk is all that can arise and alter the results of the project.

Risk is uncertain and should be handled carefully when planning your project. One of the options used to tackle the risk is to avert it. The other way is to mitigate risk taking an action that will make the risk do minimal damage to your project.

Also the risk can be transferred to another party. A good way of handling is to buy insurance. Lastly you can accept the risk.

The other thing is for the project manager to come up with a specific plan on how to handle the risk. This outlines how the risk will be assessed, who will work on this problem and the frequency of doing it. The plan should put the risks under various categories.

The plan should also describe the probability of the risk occurring since some risks have a high probability of occurrence than others (Royer, 2001, p. 45). It should also evaluate the effects of the risk to the project and classify them on a scale from minimal to severe.

For big projects a Risk Breakdown Structure (RBS) should be used to come up with a risk management plan. It is a very effective way to tackle the risks.

After categorizing the risks, one more important thing is to identify the risks. The best way is to involve the team members to help you identify possible risks. One of the best ways to identify risks is brainstorming by the project team.

According to Royer (2001), the facilitator of a brainstorming session should lead the team members to turn their ideas into a list of risks. The other way to identify risks is through interviews. This can be done to other members of the organization or experts (Royer, 2001, p. 25).

The Delphi technique is used to get experts’ opinions where they are gathered into a room and then asked questions. The other way to identify risks is to use of the root cause identification. This involves analyzing the risk and figuring out its main causes. Other ways include use of SWOT analysis and document reviews.

The last thing in project risk management is to put all the risks in a risk register. This involves a table with columns. The first column indicates the risk; the second column lists the possible reactions to the risk while the third column lists the sources of the risk.

This helps the project manager to see a clear picture of the risks involved. The final thing is to rank your risk (William, 2006, p. 56). The risk with the greatest effect is to be handled first. Research can be conducted to determine the most efficient way to register risks.

Project risk management is very essential in project management and it should be done carefully. Project managers should critically analyze the risks to ensure the projects are completed successfully.

Royer, P. S. 2001. Project risk management: a proactive approach . Expert Publishers, Chicago.

William, S. 2006. Risk management is projects . Frontier Publishers, New York.

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IvyPanda. (2019, July 1). Risk Management in Project Management. https://ivypanda.com/essays/risk-management-in-project-management/

"Risk Management in Project Management." IvyPanda , 1 July 2019, ivypanda.com/essays/risk-management-in-project-management/.

IvyPanda . (2019) 'Risk Management in Project Management'. 1 July.

IvyPanda . 2019. "Risk Management in Project Management." July 1, 2019. https://ivypanda.com/essays/risk-management-in-project-management/.

1. IvyPanda . "Risk Management in Project Management." July 1, 2019. https://ivypanda.com/essays/risk-management-in-project-management/.

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IvyPanda . "Risk Management in Project Management." July 1, 2019. https://ivypanda.com/essays/risk-management-in-project-management/.

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Project Owner: Project Risk Management, Essay Example

Pages: 1

Words: 272

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Risk and uncertainty management make up a very important part of project management. Whereas there are other key factors to successful implementation of a project, the interaction between the project owner(s) and the project management team is indispensable for effective management of the various risks.

Project managers and project owners tend to exhibit a variation of attitude and interests towards project risks. For instance, a manager is usually more risk averse due to his or her shorter and narrower perspective for measuring success. On the other hand, the project owner is less averse to the risk thanks to magnitude and the number of project he or she could be handling at the same time. Evidently, operational risks are given a higher priority as compared to both the short-term strategic and long-term strategic categorization of risks. In addition, it is worth noting that the operational risks are of much interest to the project manager whereas the latter two are of interest to the project owner. This variation of perspectives is responsible for the uncertainties and conflicts in the implementation of most projects. Therefore, there is need for alignment of these diverse interests to guarantee success in risk management.

In conclusion, cooperation and interaction between the project manager and project owner offers is crucial for the success of any project. This is because it offers an enabling environment for open discussion and attitude to the question of what are and should be the high priority risks. It also allows for quick response to the dynamics in the project environment. However, for such an environment to exist, the stakeholders must be proactive, willing, and trust each other.

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