From the course: Construction Management: Managing Risk
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Methods of controlling risk
From the course: Construction Management: Managing Risk
Methods of controlling risk
- Once a risk has been identified, a decision needs to be made on how to manage it. The management or treatment of risk can really be broken down into four possibilities. We can eliminate it altogether. We can mitigate or reduce the potential or impact of the risk. We can transfer the risk, either partially or in whole. Or we can accept the risk and budget and plan for it. The choice that's made really depends on the risk item. Its potential to occur and the impact that it would have if it did occur. If the potential for occurrence is low, or the impact it would have would be low, then that might be the type of risk that I accept. If the potential is unknown and the impact could be devastating to the company or the project, I might consider avoiding that risk completely. That would fall into the elimination category. If there are so many unknowns on a project that I couldn't possibly budget for them all, and so many that if I guess wrong we could potentially go broke trying to manage…
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