Risk Management Essay

2276 Words 10 Pages
In recent times, risk management has become one of the most important aspects of project management because of the rate of financial crisis and natural disaster in the world right now and the rate of increase in expectation from the stakeholder in an organisation. But firstly, project brings about risk management so what is project? Project can be defined as a group of people working in a unique way in a period of time to achieve a specific goal. And in achieving that project management come into place, project management is according to (PMBOK 2004) ‘The application of knowledge, skill, tools and techniques to project activities to meet the project requirement’. Project management involves estimating, planning and monitoring events that …show more content…
Risk management is defined as according to (PMBOK Guide, 2004) “The processes concerned with conducting risk management planning, identification, analysis, responses, and monitoring and control on a project. The objectives of project risk management are to increase the probability and impact of positive events and decrease the probability and impact of event adverse to project objectives”
Based on the question why is risk management necessary? “Risk management is essential for a wide variety of development and production projects because certain information about key project cost, performance, and schedule (C, P, S) attributes are often unknown until late in the project” (Edmund .H. Conrow, 2000). Project cost, performance, and schedule, these are the factors a project manager has to put into consideration when starting a project, risk management is needed in a project before it is commenced so that the project manager has to have a backup plan and avoid the project from becoming a failure. PROJECT FAILURE simply means being unable to meet with the project requirement or the satisfaction of the client organisation which is caused by missing the deadline, exceeded budget, lack of communication between the project manager and the stakeholders, ignoring risk, lack of motivation, poor progress, insufficient

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