risk_management

May 20th, 2015
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A. T. Still University
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Overview:Risk is inherent in almost every business decision. Risk management is the means by which uncertainty is systematically managed to increase the likelihood of meeting project objectives. The purpose of risk management is to reduce the overall project risk to a level that is acceptable to the project sponsor and other stakeholders. The key word is systematic, because the more disciplined the approach, the more we are able to control and reduce the risks. This chapter presents a framework for identifying risks and developing strategies for managing them.

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Risk ManagementOverview:Risk is inherent in almost every business decision. Risk management is the means by which uncertainty is systematically managed to increase the likelihood of meeting project objectives. The purpose of risk management is to reduce the overall project risk to a level that is acceptable to the project sponsor and other stakeholders. The key word is systematic, because the more disciplined the approach, the more we are able to control and reduce the risks. This chapter presents a framework for identifying risks and developing strategies for managing them. THE ROLE OF EXECUTIVE MANAGEMENT IN PROJECT RISK MANAGEMENTExecutive management plays a crucial role in every projects success. The primary responsibility for carrying out risk management activities lies with the project manager and the project team, but they cannot do it alone. The project sponsor and the executives responsible for project selection and portfolio oversight make four essential contributions to risk management: Maintain both a contingency and a reserve within the project budget. Contingency accounts for known risks and the possible cost of dealing with them if they arise. Reserve accounts for the unknown-unknowns. Hold the project manager and team accountable for the risk management deliverables, and allow for the time it takes to create them. Ben Franklins adage, An ounce of prevention is worth a pound of cure applies to risk management; project executives m

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