Dinah YoungProject Manager / Software Asset Manager| Prince William CountySpringfield, Va, United States
As I am going through the different attitudes, Risk Averse, Risk Tolerant, Risk Neutral and Risk Seeking. Risk Averse = easy. Risk Seeking - not hard. But, I am struggling with keeping Risk Tolerant and Neutral straight. I sincerely think they were named wrong. Risk Tolerant means they take uncertainty in stride and have a laissez-faire approach. Risk Neutral sees risk taking as a price worth paying for future pay-offs. The only way I can keep these straight right now is to tell myself to think opposite of what makes sense to me. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
I never used and heard about Risk Tolerant when you talk about attitudes toward risk. The only thing I used and heard is Seeking (entrepeneurs for example), Risk Averse (administrators for example) and Risk Neutral people. Saving Changes...
Interesting... I don't recall any questions related to this in the exam when I took it back in 2011.
That is counter-intuitive that they'd put tolerant before neutral but it wouldn't be the first time I've run into something like this with PMI's nomenclature. For example, I always find my PMP prep students getting thrown by the process Validate Scope as it sounds like we are getting approval on our scope baseline whereas it's really about comparing what's been delivered against our scope baseline.
The challenges of not having a universal standard on terminology ;-) Saving Changes...
Ronald DixonHealthcare Info Systems Program Manager| AECOMGarden Ridge, Tx, United States
Sometime the context of the terms may help clarify specific terminology and help one associate the terms with something that can be remembered.
Going strictly by the information you kindly provided Risk Tolerant accepts risks as part of doing business. Risk Neutral is associated with a potential delayed benefit or opportunity.
Thus Risk Tolerant may simply incur risks and move on while Risk Neutral may ask how can we obtain a future benefit or opportunity for risk incurred now.
Does that make sense or help at all Dinah? Saving Changes...
Dinah YoungProject Manager / Software Asset Manager| Prince William CountySpringfield, Va, United States
Risk tolerant is the riskiest attitude because the stakeholder may not notice negative risks.
I checked the PMBOK and could not find a listing of risk attitudes. Maybe that means it will not be on the test :) Saving Changes...
PMBOK Guide 5th edition, Page 310-311: 'The risk attitudes of both the organization and the stakeholders may be influenced by a number of factors, which are broadly classified into three frames:
* Risk appetite, which is the degree of uncertainty an entity is willing to take on in anticipation of a reward.
* Risk tolerance, which is the degree, amount, or volume of risk that an organization or individual will withstand.
* Risk threshold, which refers to measures along the level of uncertainty or the level of impact at which a stakeholder may have a specific interest.'
And it was further explained to me that Risk appetite can be:-
* Neutral
* Risk Adverse (errs on the side of caution)
* Risk Seeking (leans towards encouraging risks).
Only reference in PMI document is in the glossary of the risk practice, (p111) not explained.
I think you need to think of it that Risk Tolerant, mean to tolerate some risk (very low, just more than risk averse), and risk neutral is not risk averse but not risk seeking (accept some level of risk).
I would put it something like this
Risk averse = 0 risk or almost
Risk tolerant = very low risk, tolerate some level of risk
Risk neutral = low to high according to benefits
Risk seeking = high risk
