Risk Management, 5th Edition

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Risk Management Practices

Even the simplest business decision involves some risk. Since every project involves some measure of risk, it is the project’s success criteria that often serve as the determining factors for which risks are worth taking and which risks are not. Consider, for example, the decision to drive or fly on a business trip. If cost is the success criterion, then risk determination is simple: compare the costs of flying and driving (compounded by potential inflationary factors). However, another success criterion might be safety, and thus statistics concerning accidents should be evaluated. If punctual arrival is added as a third criterion, then airline on-time statistics, automobile dependability, and road conditions should ...