Risk tolerances

Abstract

Risks are essential elements in project management. They are uncertain events that may influence the project both positively and negatively. Organizations and stakeholders are willing to accept risks at certain degrees but their risk attitude is influenced by several factors including risk tolerance.

Risk tolerance is the degree, volume or amount of risk that an organization can withstand. It indicates how sensitive organizations, stakeholders, and people are towards risks. High tolerance often means that organizations welcome high risks while tolerance tells otherwise.