The second is about what would happen were the risk to occur, since risks are defined in terms of their effect on objectives. The first relates to uncertainty, since a risk is something which has not yet happened and which may or may not occur. Although the precise wording of different definitions may vary, all agree that risk has two dimensions. There is broad consensus over the definition of “risk” among leading national and international standards and guidelines, as well as professional bodies (Simon, et al., 1997 Australian/New Zealand Standard AS/NZS4360, 1999 Project Management Institute, 2000 British Standards Institute, 2000 Institution of Civil Engineers, 2002 UK Office of Government Commerce, 2002 Institute of Risk Management, 2002). This paper presents a range of alternative techniques for assessing risk probability in an attempt to remove the subjectivity from this vital element of the risk management process. It is therefore important to be able to assess probability with some degree of confidence. Conversely, the process is undermined when probability assessment appears to be wholly subjective (a guess). The credibility and value of the risk process is enhanced if data are collected with care, taking the time and using the tools that are needed properly to develop information based on judgemental inputs. This is particularly true for projects where data on risk probability from previous projects is either not available or not relevant. While unambiguous frameworks can be developed for impact assessment, probability assessment is often less clear. Effective risk management requires assessment of inherently uncertain events and circumstances, typically addressing two dimensions: how likely the uncertainty is to occur (probability), and what the effect would be if it happened (impact).
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