Risk Management: Strategies and Mitigation in Projects
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Concept of Risk
Risk is inherent in any activity. Every event is influenced by past actions, creating future opportunities or challenges. Change involves risk and uncertainty.
Risk Strategies
Reactive Strategies
These involve evaluating the consequences of a risk after it has occurred and acting accordingly. However, this can lead to crises and put projects at risk.
Proactive Strategies
- Systematic risk assessment
- Planning for risk avoidance and minimization
- Developing contingency plans
Proactive strategies reduce reaction time and demonstrate preparedness.
Risk Categories
- Generic Risks: Common to all projects.
- Specific Risks: Require in-depth project knowledge.
Project Risk Areas
Project Costs
Includes increased organizational costs and budget overruns.