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Case Study - Risk

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Akin Fadare
Community Champion
Ontario, Canada

We identified a risk as low priority (low probability, high impact). A response is planned even though it is on the watch list. Major stakeholders are risk-averse. A large portion of the reserve will be used if this risk occurs. Would you continue with the plan or just hope the risk does not occur? Note that this is a small organization with low risk tolerance. What would be your recommendation as a risk manager? Be realistic since this is a real-life scenario, not an exam question.
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Stelian ROMAN Project Manager| MicroSafety Carlingford, New South Wales, Australia
The response depends on your organisation's risk appetite. Have a look at ISO 31000; as a rule of thumb, a risk with high consequence can't have a low priority, regardlkess it's likelihood.
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Akin Fadare
Community Champion
Ontario, Canada
Stelian ROMAN I am of the opinion that probability and impact matrix will be use to prioritize the risk. Thanks for the ISO31000 clarity.
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1 reply by Stelian ROMAN
Sep 20, 2026 9:53 PM
Stelian ROMAN
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That's why I recommend ISO 31000 risk wording. Probability is hard to calculate without data. 'Likelihood' reflects the unknown dimension of risk more accurately. 'Consequence' is also more appropriate than impact. A simple explanation is that a risk may have a high impact on the project but a significant consequence for the organisation. The main difference between the approaches is not only alignment with risk management practices in the whole organisation but also a better understanding of risk and risk management. For example, ISO 31000 starts with understanding the context, a phase that most project managers are not aware of. Understanding the context, including the risk appetite, helps define the best risk strategies, including accepting the risk.
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Stelian ROMAN Project Manager| MicroSafety Carlingford, New South Wales, Australia
Sep 20, 2026 9:43 PM
Replying to Akin Fadare
...
Stelian ROMAN I am of the opinion that probability and impact matrix will be use to prioritize the risk. Thanks for the ISO31000 clarity.
That's why I recommend ISO 31000 risk wording. Probability is hard to calculate without data. 'Likelihood' reflects the unknown dimension of risk more accurately. 'Consequence' is also more appropriate than impact. A simple explanation is that a risk may have a high impact on the project but a significant consequence for the organisation. The main difference between the approaches is not only alignment with risk management practices in the whole organisation but also a better understanding of risk and risk management. For example, ISO 31000 starts with understanding the context, a phase that most project managers are not aware of. Understanding the context, including the risk appetite, helps define the best risk strategies, including accepting the risk.
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Lissette Indhira Pimentel Sosa
Community Champion
Program Manager| HARPER SRL Santo Domingo / Distrito Nacional, Dominican Republic
Even with a low probability, the potential impact and the organization’s low risk tolerance would make me look at this more closely.
Since a response is already planned, I would review whether preventive actions can reduce the probability or impact before the risk occurs, and whether the remaining exposure is something the stakeholders are actually willing to accept. The risk rating alone shouldn’t drive the decision when the financial impact could consume a significant portion of the reserve.

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