A potential risk that you may encounter is that there may be differences in the sand provided by the first and second supplier, which would then be a secondary risk. The action you will take if this were to occur could be to procure the sand from a different supplier. In the risk management plan you create, you have already accounted for this risk. From past experience, you know that one main risk that you may face is that the sand supplier may not deliver on time. A high impact risk will require a response plan, whereas if the risk seems negligible, it will only be watched by managers.Īs an example, imagine you are the project manager for a construction project. Once this plan is implemented, the new risk that may arise from the implementation - that’s a secondary risk.Ī response plan is created depending on the impact of these risks on a project. The PMBOK Guide defines secondary risks as “those risks that arise as a direct outcome of implementing a risk response.” In other words, you identify risk and have a response plan in place to deal with that risk. Risk Management is “the process of identifying, analyzing, and responding to risk factors throughout the life of a project in the best interest of its objectives.”Īside from the primary risk inherent in any project, activities may also involve secondary and residual risks. This means project managers need to be able to think outside the box and not take the same route again. Project Managers are trained in risk management to ensure that risks are kept to a minimum in their projects.
The PMBOK Guide also states that Risk Management is one of the ten knowledge areas where a project manager should be competent. A project may also obtain a positive outcome from a risk event. The PMBOK® Guide defines risk as “An uncertain event or condition that, if it occurs, has a positive or negative effect upon at least one project objective.” A risk does not necessarily always harm a project. A risk is defined as “the exposure to the chance of injury or loss - a hazard or dangerous chance.”
The same goes for business organizations. We might panic, or try not to take any overt risks, and even try to avoid them, but risks are inevitable they eventually find their way into our lives.
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