![]() Low impact/Low probability - Risks in the bottom left corner are low level, and you can often ignore them.The corners of the chart have these characteristics: The basic form of the Risk Impact/Probability Chart is shown below. You can then decide what resources you will allocate to managing that particular risk. This gives you a quick, clear view of the priority that you need to give to each. You use these two measures to plot the risk on the chart. The probability that a risk will occur is represented on one axis of the chart - and the impact of the risk, if it occurs, on the other. The chart allows you to rate potential risks on these two dimensio However, the size of the impact varies in terms of cost and impact on health, human life, or some other critical factor. Impact - A risk, by its very nature, always has a negative impact.And it can't be exactly 0%, or it w ouldn't be a risk.) (Note: It can't be exactly 100%, because then it would be a certainty, not a risk. The probability of it occurring can range anywhere from just above 0% to just below 100%. Probability - A risk is an event that "may" occur. ![]() The Risk Impact/Probability Chart is based on the principle that a risk has two primary dimensions: The Risk Impact/Probability Chart provides a useful framework that helps you decide which risks need your attention. If you do this effectively, you can focus the majority of your time and effort on the most important risks. Does this mean that you should try to address each and every risk that your project might face? Probably not - in all but the most critical environments, this can be much too expensive, both in time and resources. Companies undertake increasingly complex and ambitious projects, and those projects must be executed successfully, in an uncertain and often risky environment.Īs a responsible manager, you need to be aware of these risks. Risk management is an important function in organizations today. Risk Impact/Probability Chart Learning to prioritize risks
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