Risk Management in Project Management

Running head: RISK MANAGEMENT IN PROJECT MANAGEMENT
Risk Management in Project Management
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RISK MANAGEMENT FOR PROJECT MANAGEMENT
Table of Contents
1. Introduction............................................................................................................................2
2. Discussion..............................................................................................................................2
2.1 Critical Examination of Relationship between Risk and Strategy...................................2
2.2 Explanation of Process for Adaptation Enabling Organization to achieve Strategic
Objectives and Win despite of Risks with Real Example......................................................5
3. Conclusion............................................................................................................................10
References................................................................................................................................11

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RISK MANAGEMENT FOR PROJECT MANAGEMENT
1. Introduction
Risk can be defined as the possibility to lose anything of value. Such values could be
lost or gained while undertaking risk that is resulting from a provided action or activity
(Bessis 2015). These risks can even be defined as few intentional interactions with
uncertainty. Strategy, on the other hand, is a high levelled plan that helps to execute one or
more objectives under subsequent uncertainty conditions. A strategy is required since
resources available for achieving the goals are limited (Hill, Jones and Schilling 2014). The
following report outlines a brief discussion on relationship between risk and strategy. A
proper explanation on adaptation process enabling companies to obtain strategic objectives
and become a winner in spite of facing risks. Suitable examples would also be provided in
this report.
2. Discussion
2.1 Critical Examination of Relationship between Risk and Strategy
Risks and strategies are interrelated and the success of any specific strategy is
significantly associated to the organizational understanding as well as command of risk. The
perception of risk is a subjective judgment that individuals make regarding probability and
severity of a risk and might even vary from one person to another (Lam 2014). It is the basic
process for identification, evaluation and even analysis of risks that are followed by
coordinated application of resources for minimization and monitoring of the impact of these
risks.
There should be an appropriate method to approach it by considering risks through
strategies and by undertaking three significant perspectives of risks (Glendon and Clarke
2015). The first and the foremost perspective of risk is risk coming towards strategy. It refers
to the execution risk, which rises to strategic consideration level. The second perspective of

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RISK MANAGEMENT FOR PROJECT MANAGEMENT
risk is risk coming from strategy. This particular perspective refers to risk profile of strategy
and each and every alternative. The third or final perspective of risk is risk of the strategy
itself. It refers to the risk of the strategy and not moving entire organization for understanding
the context. All of these three perspectives are utilized in any organization by strategic
functions (Cardona 2013). An organizational strategic plan is responsible for setting
framework for its business planning cycle.
The main focus of business planning is given on processes, which assist the company
to obtain its intended result in long term and short term (Pritchard and PMP 2014). Hence,
there is a close relationship within organizational strategic objectives or goals and
management of every risk for which it is being exposed. It is quite important that any
company has the ability to ensure a distinctive continuity of processes irrespective of the
probability of risks affecting the business. An effective business strategy has the capability to
recognize future opportunities and significant weaknesses of the company (Chance and
Brooks 2015). A plan for managing risks can lead to proper development of few strategies of
risk reduction. Therefore, it is vital to determine if strategies for risk minimization have
capability to handle risk properly. Several risk controls might be difficult for the company to
exploit opportunity.
The business strategy would establish at the inception of cohesive processes and
policies for ensuring that probable risks are being managed and that the business objectives
are fulfilled effectively and efficiently, after consideration of organizational governance
framework requirements (Eden and Ackermann 2013). The risk management is extremely
effective when corporate culture eventually encourages every organizational member to
ensure a balanced role. These organizational members must be aware of the risks and should
bring subsequent risk issues to managerial attention. Moreover, they should be both
innovative and entrepreneurial when risk provides an opportunity towards rewards.