Project Management Institute

The project manager

risk taker and contingency planner. Part 1: the project manager as a risk taker

Project managers play a variety of roles when implementing projects. Of these, the least understood are the roles of risk taker and contingency planner. This paper--the first of two (part two published in the December 1990 issue of Project Management Journal)--examines the role of risk-taker; it discusses the responsibilities and challenges of playing this role and the problems of risk-taking in relation to a project manager's experience. It then examines the process of decision-making in risk environments and outlines a six-step approach for identifying risk. It explains this approach in relation to a sample project to demonstrate how project managers can use expected value analysis as a decision-making method in a risk environment; it also identifies the weaknesses in using expected value analysis and outlines nine guidelines for using expected value when making risk decisions. It concludes by explaining five functions of contingency planning.
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