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Risks in Project Management: Types & Examples

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  • 0:02 Definition
  • 1:22 Types of Risk
  • 1:37 Schedules
  • 2:09 Product & Management
  • 3:02 Customers & Technology
  • 3:54 Lesson Summary
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Lesson Transcript
Instructor: Brianna Whiting

Brianna has a masters of education in educational leadership, a DBA business management, and a BS in animal science.

In this lesson, we'll learn about risks in project management. We'll define the term, learn about some of the more common types of risks, and look at examples of each.

Definition

Have you ever taken a risk in your life? Perhaps it was taking a shortcut while on a road trip or waiting to buy tickets at the door instead of in advance? You probably noticed that sometimes taking risks does not end well.

Risk from a business point of view is something that should be monitored carefully and minimized as much as possible. After all, every good company wants to 'know' they will succeed, not 'hope' they will succeed. Project risk management is the process of identifying and analyzing possible negative events and effects on a project. The purpose is to decrease the impacts of negative events while trying to increase the positive effects. Basically, be prepared for events that might occur and be proactive.

For example, let's say that you are the project manager in charge of designing a new shoe. Your project completion date is November 1. However, your supplier has informed you that the shoe laces may not be available until November 4. To utilize proper project risk management, you would create an alternative plan that can accommodate this negative event. You would brainstorm and find solutions to the problem before November 1st arrives. Without them, you will be left with an incomplete project, chaos, and stress for you and your team.

Types of Risks

Every project has some sort of possible risk. How a project manager handles those risks can make all the difference. Try to identify the different types of risks that could occur for each project. The following are common risks that a project could encounter.

Schedules

Sometimes the project deadline may pose a problem. The timeline might not be realistic or rushed, and therefore, quality is affected. There might also be a task that is forgotten that needs to be completed. When this happens, you have to add more time to the project deadline and slow other tasks that can only be completed once the missing task is inserted and completed. Lastly, you may encounter a task that is more difficult than expected. Maybe it requires someone more qualified. This adds a delay to the timeline.

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