A Comprehensive Analysis of Risk Culture and Attitude in Projects

This report delves into the critical relationship between risk attitude and risk culture within the context of project management. It begins by defining risk management, risk culture, and risk attitude, emphasizing the importance of risk culture in bridging personal attitudes with organizational culture. The discussion explores how risk attitude, encompassing risk aversion, risk-seeking, and risk-neutral approaches, influences risk culture, and vice versa, highlighting their interconnectedness. The report further examines the need for a good risk culture, outlining its role in compliance, organizational performance, and aligning the objectives of a project. It also details the characteristics of a good risk culture, such as top-down decision-making, ethical practices, transparency, and the promotion of learning and development. The conclusion underscores the pivotal role of risk culture in enhancing risk management and facilitating effective decision-making in project management.

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Introduction
Risk management is defined as a process of identifying, assessing and controlling threats
to an organisation so that the company can get advantage while conducting a project
management practice. However, there are several factors that can influence the risk management
practice such as the risk culture and the risk attitude (Naeem et al. 2018). Therefore, it is
important for the organisation to put focus on the risk culture and the attitude or approach
towards the risk. Based on the research of Wood and Lewis (2017) it can be stated that culture is
associated with the perception of repeated behaviour that a manager or the people lingering with
a project can develop to face the risks and mitigate as per their ability. Therefore, risk culture
play a significant role in creating a bridge between the personal attitude and the organisation
culture. This report aims to deal with the relationship between risk attitude and risk culture and
figure out the values or importance of risk culture in projects. Apart from that the features of
good risk culture is also discussed in this report with preference to shape the paradigm of risk
culture and attitude in a project management context.
Discussion
Relationship between risk attitude and risk culture
According to Wang et al. (2019) risk culture is dynamic notion that comprises a long
range of factors from the organisational culture to personal level understanding of the risk.
Therefore, it is important to define risk culture in a larger aspect. Based on the research of
Suardini et al. (2018) it can be stated that risk culture is a paradigm or a practice that envisions
value, belief, knowledge, attitude and understanding the fathom of the risk shared by the people

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working in a project management. In other words, it can be stated that the role of risk culture is
to shape and define the actual practice of the organisation and figure out the defining practice
that can lead to deliver success to the project. Therefore, it is definitely an important aspect for
the private organisations to consider its risk culture before taking important decision.
On the other hand, risk attitude is the response of a person to evaluate the risk and act
accordingly. Palermo, Power and Ashby (2017) articulated that a risk attitude can be emerged at
the conjecture of risk and mitigation. In other words, risk attitude is the approach through which
a person envisions the risk and plan to face it. Therefore, there are certainly a number of risk
related attitudes that people are possessed. For example, there is a nature of risk aversion where
people can gravitates towards certain and rejects any kind of uncertainty. On the other hand,
there are also people who can seek risks. It indicates the behaviour or the attitude of a person
inclining towards less-certain activities. There is also a risk neutral approach where an individual
can act on the basis of delivering a good insights into the risk identification process.
Therefore, it is certain and evident that there are great link between the notion of risk
culture and risk attitude. Form the research of Kucharska and Kowalczyk (2016) it can be stated
that the risk culture creates an ambience for the people to make a positive or negative approach
towards the risks. More prominently, the risk culture is resembled with the organisational culture
and individual aspiration. As a result of that it is the job of the risk culture to ascertain some
practice that will influence the person or the team to deal with the risk positively or negatively.
The positive approach can be identified as the risk seeking where the team will act proactively to
mitigate the risk in limited time. On the other hand, there is also risk aversion attitude that
connotes a negative risk attitude where people are more intrigued by the certain options rather
than taking risks. This symbolises the influence of risk culture on risk attitude.

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On the other hand, there is also the risk attitude that can influence the risk culture in a
more extensive level. The research of Carvalho and Rabechini (2015) articulated that risk culture
is influenced by organisational culture and the individual level skills to mitigate it. Therefore it is
risk attitude that can shape the practice of establishing an effective measure to identify and
mitigate the risk proactively. The risk attitude actually defines the nature of the team or an
individual in order to deal with risk. Qazi et al. (2016) argued that if a risk attitude contains
negative approach towards the organisation then it is clear that the risk culture will also get
affected and prone to get more certain options rather than uncertainty. On the other hand, if the
organisation has a risk seeking attitude then it will be confirmed that the risk culture of the
organisation can be dominated with proactiveness towards uncertainty. Therefore, it can be
stated that risk culture and risk attitude are influencing each other and decides the role of the
project team to act on the basis of its culture and attitude.
Needs to build good risk culture
There are several reasons behind creating a good risk culture in the process of facilitating
a successful project management. For the business organisations it is essential to figure out the
potential key factors that are contributing to the success of the project management. It is
definitely an important part for the business organisation to build a good risk culture that can
shape the future of the project management in process (Gontarek 2016). Therefore, it can be
stated that the needs to build good risk culture has a range of factors and important aspects that
can facilitates the outcome of the project management in process. In this regard, it can be stated
that there are significant position of risk culture in project management and it is the
responsibility of the business enterprises to set good risk culture.

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First of all, it can be stated that the compliance orientation of a good risk culture is able to
mitigate the issues regarding a project initiative. According to Kendall (2017) it is important for
a project manager to facilitate adequate measure that will drive the organisation to follow the
standard and legal framework in course of facilitating a project. Therefore, the role of risk
culture is to introduce a process where the employees can understand the importance of legal and
infrastructural compliance and follow those factors strictly. It will definitely guide the
organisation to achieve the sustainable goals and get strategic advantage properly.
In addition to this, a good risk culture is also coupled with the organisational
performance. Farrell and Gallagher (2015) opined that one of the major focus of risk culture is to
emphasis on the organisational success and failure. It is associated with the corporate governance
practice of the organisation where the role of the organisation is to deliver unique and relevant
approach that are helping in dealing with the governance of the organisation. Any kind of risk
that is potential to jeopardise the corporate governance framework of an organisation are
subjected to risk culture. In response to this, the organisational culture will provide ample
opportunity and facility to the enterprise that can be identified to identify and mitigate the risks
as soon as possible.
Apart from that, Kumar (2018) articulated about the attitude or behaviour of the
organisation and its very professionalism that can be identified through the risk cultural process.
Different layers of the management is entitled to deal with specific role of a project. Therefore,
harnessing a unified nature of all the teams is also essential for the project manager in the form
of synchronising the entire team in the same line. As a result of that the tone of the organisation
can be highlighted in effect to provide a glimpse of expectation and objectives in the form of risk
culture. It helps to eradicate any kind of risks that a project is facing in limited time.

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One of the important aspect of the risk culture is to set the aims and objectives of the
project which is fundamental in course of delivering a positive and significant impact on the
success of the project management in process. Wang, Zou and Li (2016) pointed out that
objective is an important aspect that can help to meet the expected target and objectives. The
relevant decision making and planning the strategies are also developed on the objectives.
Henceforth, it is definitely an important aspect for the project manager to initiate aims and
objectives of the risk before initiating the project. In this regard, a good risk culture will drive the
project manager to chalk out that objectives and reflect a step by step plan to make the project a
success.
Characteristics of good risk culture
One of the important characteristics of good risk culture is to find out the tone from the
top on risk taking. It manes that top management is responsible to take all the necessary
decisions and relays it to the subordinates. In a good risk culture a top down decision making
process can be seen where the management is entitled to take all the important decisions and find
out the loopholes or risks. Therefore, an ethical principle in practice is also required where the
role of the organisation to make a better and effective environment for all the people associated
with the project. A good risk culture compels to set ethical practices in business.
Identifying the management risk is also a pertinent aspect for the business organisations
in order to facilitate success in the project management process. Therefore, the job of good risk
culture is to project the potential risks properly and providing ample time for the project
management to analyse and plan to mitigate those risks. Therefore, Fraser and Simkins (2016)
stated that a good risk culture helps to provide enough information regarding the risks and
keeping transparency within its practice so that the management can understand the risks

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properly. The transparency in identifying risk is also help to plan the mitigating strategy in time
so that the team can cope with those risks and manage to resolve it.
One of the major feature of the risk culture is to play the role of a whistle blower in order
to mark the risks. This kind of feature is always being encouraged by the organisation because it
proves a proactive nature of the team to raise the flag against potential threats and plan
accordingly so that the problems will be resolved. In addition to this, a good risk culture is also
associated with the learning and development practice about the risk identification and handling
those risks professionally (Bhatti, Saad & Gbadebo 2018). This learning and development
practice is very helpful for the project management team to get deep insights into the potential
threats and imply a professional attitude in course of running the project.
The risk taking behaviour of a company proves its potentiality to handle the situation.
Therefore, a good risk culture enhances the ability of the project management team to take risks
and find out ways to mitigate those risks. Moreover, it can be stated that highlighting the threats
from different perspectives is also an essential part of the risk culture to show the efficiency of
the organisation to a great extent. Therefore, it can be stated that a good risk culture is definitely
played pivotal role in not only identifying the issues but also highlight the potential measures in
limited time in order to bring efficacy into the project management process.
Conclusion
Based on this understanding, it can be stated that risk culture plays a pertinent role in
order to bring efficacy into the process of risk management and makes it easier for the
management to set better decision making in the context of analysing and mitigating the potential
threat in the progress of project management practice. In this regard, the role of the risk attitude

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and risk culture are intertwined and influence each other to shape the positive outcome of the
project. Therefore, it can be concluded that for the project management it is always being a grave
concern to set the risk culture and shape risk attitude so that the project management team can
easily find out the risks and mitigate it.

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