Risk tolerances

Abstract

Risk tolerance is an amount of risk that a project driven organization can withstand. This element in project management indicates the willingness of organization and it's people to avoid or accept risks.

The levels and perspectives of risk tolerance are dynamic throughout the life of the project. Risk tolerance has three different perspectives when you are involved in a project: company, project manager, and stakeholder. The company risk tolerance depends on the financial stability and project diversification. A project manager’s risk tolerance is affected by job security and corporate culture. The stakeholder’s risk tolerance is influenced by project objective. The project success depends on agreeable level of risk tolerance and early risk management planning.

Big idea

The section defines what risk tolerance is.

Application

This section talks about application of risk tolerance.

Modeling and quantification of risk tolerance

The section talks about methods to measure risk tolerance.

Influence of risk tolerance

The section talks the importance of risk tolerance.

Company perspective

Overview of risk tolerance from the company perspective.

Project manager perspective

Overview of risk tolerance from the PM perspective.

Stakeholder perspective

Overview of risk tolerance from the stakeholder perspective.

Limitation

The section discusses limitations of the method.

References

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