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The practice standards of Project Management Institute (PMI) are guides that help to use the
tools, techniques, or processes identified in the Practice Standard for Project Risk Management.

Chapter 11 of the PMBOK Guide Fourth Edition, is the basis for the Practice Standard for
Project Risk Management.

The practice standards:

Target project managers, project personnel, contract personnel, supervisors, and

project stakeholders.
Describe the processes, their activities and inputs and outputs.
Provide information on what the process is, what it does, why it is important, when it
should be executed, and who should execute the process.
Does not describe how the process is to be implemented.

Purpose of the Practice Standard for Project Risk Management

It is a standard, recognized as good practices, for project management practitioners and other

It is globally applicable and has a descriptive purpose.

The three main sections of this chapter explain:

The framework of project risk management
The fundamental principles of the six processes of project risk management
The terms that are used in this practice standard

Project Risk Management

Project Risk is an uncertain event or condition that, if it occurs, has a positive or negative effect
on a projects objectives.

Project Risk Management:

Includes the processes concerned with conducting risk management planning,

identification, analysis, responses, and monitoring and control on a project.
Identifies and prioritizes risk in advance of their occurrence and provides action-
oriented information to project managers.
Increases the probability and impact of positive events and decreases the probability
and impact of negative events in a project.

Role of Project Risk Management in Project Management

Project management processes should include the possibility of project risks in the project plan.

Project Risk Management:

Is essential for every project and each phase of the process group.
Addresses the uncertainty in project estimates and assumptions.
Is not a substitute for other project management processes.
Is applicable throughout a projects life cycle.
Provides realistic expectations for the completion dates and cost of the project.
Enhances the value of other project management processes.

Good Risk Management Practice

Project Risk Management should be:

Consistent with the existing organizational practices and policies
Appropriate to the project
Implemented according to business challenges and multi- cultural environment
Conducted in compliance with the internal and external requirements of the project
Conducted ethically, according to the Project Management code of ethics
Conducted on all projects in proportion to the characteristics of the project under

Critical Success Factors for Project Risk Management

The general success factors are:

Recognize the Value of Risk Management It is a discipline that ensures a positive return on
investment for an organization, the stakeholders, and project team members.
Individual Commitment / Responsibility Risk management is the responsibility of all the
project team members including stakeholders.
Open and Honest Communication The project team members should be actively involved
in the Project Risk Management process.
Organizational Commitment This can be achieved if risk management is implemented
according to the goals and values of the organization.
Risk Effort Scaled to Project The activities of Project Risk Management should be
consistent with the projects value to the organization.
Integration with Project Management Project Risk Management is an integral part all the
project management processes.