Essay Project Risk

                Risk tolerance is a measure that describes the acceptable level of risk by an organization or project team. Risk appetite and risk propensity terms also represent the same concept as risk tolerance. Being a project manager of IT project, I would have the responsibility to manage risk factors associated with the project. Somehow, prior to managing risk, it seems important to determine risk tolerance. More realistic risk mitigation efforts can be taken when the risk tolerance level is determined by the project management. As an IT project manager, I would also determine the level of risk that organizational employees, owner, and other stakeholders are willing to accept for the execution of project operations.

            Risk is invisible and subjective that seems difficult to be determined. Considering the importance of risk determination and mitigation effort it should be discussed and defined in the meetings with stakeholders. I would ensure meetings with the stakeholders particularly with employees, investors, and owners of the project to discuss risk factors linked with the project. Stakeholder’s discussion regarding these risk and emphasis on the risk mitigation efforts will support me determining the level of risk tolerance regarding this IT project. Owners and investors always take interest in a high return on investment. For this high return on investment, they sometimes show a willingness to accept the high risk associated with business operations. Thus, in this project level of risk tolerance remains high

            Mainly, I would use three methods or techniques to determine risk tolerance in this IT project. At first, considering risk subjective and intangible I would ensure a meeting with the stakeholders. I would encourage them to share their views about risk factor after translating all possible risk factors associated with the project. Stakeholders rarely share their clear views and perceptions about risk tolerance but divergent views can still support in getting a subjective understanding regarding risk tolerance level

            Secondly, I would determine risk tolerance through financial stability and project diversification. High level of competition and poor financial health of an organization clearly shows high-risk tolerance level for the sake of profit. In such a situation, owners show a willingness to execute operations resulting in some profit and position in the market even in the presence of high-risk factor linked with these operations. Thus risk tolerance can be determined by analyzing the financial health and competition in the market. Thirdly, I would also get support in the determination of risk tolerance by understanding corporate culture, job securities, and project objectives. So, by using these methods, I will be able to identify risk tolerances associated with my project.