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Abstract

Risks exist for many causes, such as incorrect management or scope definition, unexpected circumstances, and ineffective shareholder management. Managing project risk is an inevitable part of a project. As a matter of fact, project management risk can occur from almost any project process. If a possible risk of the project is not premature identified, then the project will be at a high risk to complete as per schedule, within budget and to meet the expected quality.

Keywords: risk, risk management, projects, risk mitigation.

J.E.L. Classification: G3

1. Introduction

Risks are the threats of the project success. Risks that are both possible and probable must be identified and analyzed to fully understand what can happen, what is likely to happen, and if the worst should occur, what would be the result? This is the purpose and essence of project risk management.

Risk management is both a strategy and a process.

Risk management is the process of identifying, analyzing and responding to risk factors during the life of a project and in the best interests of its objectives. Suitable risk management will decrease not only the probability of an event occurring, but also the degree of its impact.

Risk management plays a key part in maintaining project stability and efficiency during the project life cycle. It proactively addresses possible obstacles that may arise and deter project success and block the project team from achieving its goals. Project risk can be anything that threatens or limits the goals, objectives or deliverables of a project. Project risk can be present in all projects and may have one or more causes and it occurs, one or more impacts and this is the reason why project risks must be identified, managed and addressed throughout the project in order for the project to be successful.

Every project and any related activities are surrounded by risks. Each risk involves two major concerns:

- the probability of occurrence and

- the impact that results if the risk occurs.

The main risk...

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