Project Risk Management: Analyzing Risk Culture and Attitude

This report, prepared for the EPM5740 Project Risk Management course, delves into the critical role of risk culture and risk attitude within project teams. The report explores how risk attitude influences risk culture and vice versa, emphasizing the importance of fostering a strong risk culture to enhance project outcomes. It provides a detailed analysis of the elements that constitute a good risk culture, including compliance, organizational performance, and effective risk management. The report highlights the necessity of proactive risk assessment and mitigation, underscoring the impact of a positive risk culture on a project's success. The report also discusses how risk management contributes to business success and addresses uncertainties. It emphasizes the need for consistent application of risk management principles and processes, while acknowledging that a robust risk culture is essential for guaranteed success. The report draws upon various sources to illustrate the importance of risk assessment, risk mitigation procedures, and the role of project managers in ensuring project success, while discussing diverse categories of risks and their potential impact on projects.

Running head: MANAGEMENT OF RISK
MANAGEMENT OF RISK
Name of the student:
Name of the university:
Author Note:

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Executive Summary
Risk management has been considered to a primary component for the undertaking of
projects as a result of avoiding the after effects of a successful completion related to a project
that shall be undertaken by any of the project teams belonging to an organization. This report
clearly identifies such necessities along with the importance of incorporating the risk culture
with the individual team members of a project in order to have the primary motive of
identifying and assessing the risks with required methods of mitigation for avoiding the
future consequences that might be causing any harm to the project.

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Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
On the primary basis, this report unpacks the primary characteristics belonging to that
of culture putting forward the explanation of what shall be done throughout the report that
has been undertaken (Hillson and Murray-Webster, 2017). Culture specifically arises from
the behaviour from repeating the same things over and over again in to have a common
motive of developing the a shared approach among the members of a team working towards a
the successful completion of a project. The Institute of Risk Management (IRM) had
conducted a major study upon the risk culture in the year of 2012 that made proper utilization
of the ABC model as the primary foundation to understand the risk culture within the field of
risk management is a better way (Chaly et al., 2017). The A-B-C model for risk management
in order to undertake the risk culture can be primarily categorized into risk attitude, risk
behaviour as well as risk culture. However, it is considered important to maintain a specific
risk culture for the developing as well as maintaining a strong along with a positive
management of all the risks that are directly associated with the project that is undertaken.
This also includes influence upon the compliance, effectivity and organizational performance.
Discussion
The importance of risk culture within an organization or a team of project members is
necessary for a number of reasons that can be explained with the help of three primary
categories namely the likes of Compliance, Organizational performance and effectiveness of
the risk management that is usually done within the organization (Bromiley et al., 2015).
At the level of business organization or might as well be present within the project
team has the general requirement of understanding as well as expressing of the culture that is
directly associated with the risk as a part of the compliance requirement for the method of
corporate governance. In this regard, the management should be liable to maintain and check

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the presence of a risk culture within the organization or a team of project group and that the
policy of risk is completely in alignment with the project that has been undertaken by the
group of members.
Organizational performance also acts as a determinant for the risk culture to check the
presence as well as the alignment of the same within the rules and objectives of the project
that has been undertaken (Hillson, 2017). This has the primary emphasis upon the areas that
are usually covered with the help of behaviour as well as culture together. Lastly, effectivity
of the management of risk that is carried out within an organization by checking upon the
critical effect that the risk culture has upon the management of risk that is carried out by the
members of the organization or a specific project group belonging to the organization. This
point puts forward the theory that prevailing culture of risk within an organization can make
the organization the best or the worse in situations where management of risk is considered to
be a difficult job by the experts within the field of risk management particularly.
As stated by Pan, Siegel and Wang (2017), examination of the formation along with
the evolution of the risk culture in the corporate sector or might as well be in the project team
for the project that has been undertaken, the particular preference towards the risk along with
the uncertainty shall be shared by the leaders of the firm. In addition to this, it will also have
a primary effect upon the policies aligned to the corporate environment.
The author again states that the documentation of the persistent commonality within
the attitudes in accordance to the risk within the existing teams of the project, which arises in
regards to the process of selecting the leaders with a helping hand from the similarly existing
preferences as well as rooting the risk attitude related to the founders (Heckmann, Comes and
Nickel, 2015). Changes that are usually visible within the risk culture in accordance with the
corporate firms along with the project teams that are associated with the projects undertaken

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by the respective firms within the corporate and the social world. The investments that are
made into the policies in regards to the corporate firm form a contradicting argument to the
cross-sectional differences again within the risk attitude of the founder (Koudstaal, Sloof and
Van Praag, 2015). This is all explained with the initially existing risk culture that belongs to
the project team in order to contribute towards the difference that have existence across the
firms in persistent to the policies of the same such as the likes of research along with the
intensity associated with the development cycle.
In field of projects, assessment of risk commonly refers to the tracking as well as
monitoring over the risks that might be acting as well as posing a threat towards the project
that has been undertaken. After the assessment of all the risks that have been identified for
the project that has been undertaken, the mitigation procedures of the same are formulated
accordingly with the help of proper strategies and tools (Hopkin, 2018). In addition to this, a
proper risk culture is needed within the project team in accordance to the objectives of the
project that had been initially led down so as to make the process of risk assessment and
mitigation have more emphasis for a successful delivery of the project that has been selected
by the respective project team.
According to Engemann and Engemann (2017), Risk Management has been
recognised as one of the primary contributor towards the business along with the success that
is associated with the project that is undertaken by the respective teams of the project since it
has the primary focus upon addressing the uncertainties within the proactive manner for the
minimization of the threats. In addition to this, it also helps maximise the opportunities as
well as optimizes the achievement of all the objectives that have been stated initial down the
project. There is the shared existence of a wide convergence as well as the international
consensus upon the necessary elements meant for the essential management of risk and the
relative process and by provisioning with a support towards the growing range of the tools

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and the techniques that have the potential capability. This also has the inclusion of a
knowledge body that has been accepted along with an academic as well as research base with
that of a wide experience across the practical implementation across most of the industries
within the same field of business (Eriksson, 2017). Despite the existence of these risk
management methods, the procedure sometimes fails to meet the expectations that have been
demonstrated by the continued history related to business as well as the failures within the
project.
Visibly foreseeable threats that have been materialised into such problems along with
crises as well as the opportunities that are achievable are usually missed that leads to
potential loss of benefits. Hence, this has been clearly mentioned by the author that the
existence of such principles, processes that are well-defined as well as the widespread
practice is not at all sufficient for the guaranteed success (Sadgrove, 2016). It is considered
that some of the other required ingredient is missing. It is again stated that the most
commonly non-existing factor that aligns to the processes as well as the procedures of risk
management is lacking. This commonly referred primary component of the risk management
procedure has been termed as risk culture.
According to Kurniawan et al. (2017), the successful completion of a project depends
upon the risk mitigation procedure which are conducted by the project manager. The paper
was very much useful to understand that identification of the risks us very much useful to
manage the diverse processes of a project. There are diverse categories of technologies which
are used in complex project and each of these technologies is a huge source of concern for the
project team members. The paper is very much useful to identify the significance of the
diverse categories of risk management procedures which can enhance the success criteria of a
project.

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The paper provided in depth discussion about the diverse steps of risk management
starting from the identification of the risk to monitoring of the risk. The basics of the risk
management procedures was discussed in this journal (Estévez et al., 2015). The data source
was very much significant to understand the significance of the selection of risk analysis
techniques.
The investigator of this paper was very much useful to understand that diverse aspects
which has to be considered while managing a risk such as the owner of the risk, impact of the
risk, probability of the risk, score of the risk, ranking of the risks and the mitigation plan of
each of the risks (Meyer and Reniers, 2016). The journal was very much useful to
comprehend that prioritization of the risks is huge challenge in most of the business
organizations. The investigators of this paper confirmed that diverse categories of risks such
as strategic risks, compliance risk and reputational risks.
The paper highlighted that retaining of the risks can have a harmful impact on a
project as well. Identification of the goals of the project is very much recommended from the
paper. The risk handling activities are focused in this journal (Glendon and Clarke, 2015).
The investigator of this article highlighted that the structure of a project or an organization
can be maintained using the risk management procedures.
The researcher of the paper highlighted that risk control measures are the other
positives associated with the risk mitigation procedures. The author critically analyzed the
significance of a risk mitigation plan and the diverse categories of insurance schemes which
are used to deal with the assets which might get distorted or disrupted due to a risk (Srivastav
and Hagendorff, 2016). The paper helped in understanding that support from the investors or
the steering committee is very much essential to deal with some of the risks of a project.

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The significance of the risk management policy was also highlighted by the
investigators of this data source. The authors suggested that the policy must be aligning with
the organizational or the project needs and each stakeholder must be understanding the
significance of the policy.
Conclusion
With the help of the risk management and the related procedures, it has been
identified that management of risk while the undergoing of the project is important for the
fact that assessment of the risk is necessary during the initial phases of the project. In addition
to this, after the risks have been assessed it is important for the mitigation of the same so that
such risks that pose a threat to the project that has been undertaken does not cause any serious
damage or harm to the project after it has been successfully completed. In order to have such
a mindset incorporated into every individual belonging to the project team, it has been found
that presence of the risk culture is necessary for the purpose of assessing the risk at every
single phase of the project to identify each of the threat that has an existence within the same
phase for a better mitigation of the risks that might be potentially having the capability to
cause serious consequences to the undertaken projects by the entire team of the project
belonging to a respective organization. Following this, the report also identifies that the
presence of a risk culture that forms the primary component of all the procedures belonging
to the risk management procedures is more often failed to achieve for the fact of sticking to
the completion of the project. The report has placed forward facts, which state that the
visibility of such failure can be minimized or reduced with the incorporation and
implementation of a risk culture among the project team as well as among each of the
employee that belongs to the organization undertaking the projects.

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References
Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk
management: Review, critique, and research directions. Long range planning, 48(4), pp.265-
276.
Chaly, S., Hennessy, J., Menand, L., Stiroh, K., Tracy, J., Gutt, L.H., Held, M. and Hirtle, B.,
2017. Misconduct risk, culture and supervision. Federal Reserve Bank of New York.
Engemann, K. and Engemann, K. (2017). Risk attitude chain: safety climate, risk attitude and
risk decisions. International Journal of Business Continuity and Risk Management, 7(3),
p.211.
Eriksson, J., 2017. Threat Politics: New Perspectives on Security, Risk and Crisis
Management: New Perspectives on Security, Risk and Crisis Management. Routledge.
Estévez, R.A., Anderson, C.B., Pizarro, J.C. and Burgman, M.A., 2015. Clarifying values,
risk perceptions, and attitudes to resolve or avoid social conflicts in invasive species
management. Conservation Biology, 29(1), pp.19-30.
Glendon, A.I. and Clarke, S., 2015. Human safety and risk management: A psychological
perspective. Crc Press.
Heckmann, I., Comes, T. and Nickel, S., 2015. A critical review on supply chain risk–
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Hillson, D. and Murray-Webster, R., 2017. Understanding and managing risk attitude.
Routledge.
Hillson, D., 2017. Managing risk in projects. Routledge.

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Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and
implementing effective risk management. Kogan Page Publishers.
Koudstaal, M., Sloof, R. and Van Praag, M., 2015. Risk, uncertainty, and entrepreneurship:
Evidence from a lab-in-the-field experiment. Management Science, 62(10), pp.2897-2915.
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vulnerability mitigation strategies on supply chain effectiveness: risk culture as
moderator. Supply Chain Management: An International Journal, 22(1), pp.1-15.
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Pan, Y., Siegel, S. and Wang, T.Y., 2017. Corporate risk culture. Journal of Financial and
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