One view of risk that is common in the management science is that risk can be thought of in terms of predictability and uncertainty. Construction projects have plenty of it, contractors cope with it and clients pay for it.
Risk management is a broad subject area spanning numerous disciplines and there is no single ?correct? definition.
Throughout the years, many scientists tried to specify, categorise, identify and calculate the risk of a project. Many activities have been created in order to calculate uncertainty and calibrate risk. However the most common and known risk management process is broken to three basic steps.
1. Risk Identification
?When attempting to identify risk, it is rather like trying to map the world which is always centred on the location of the map maker. Much of the world is not visible from where he stands.? (Flanagan R. & Norman G. 2003 p.47)
It is crucial and essential therefore to identify as many risks as possible that may occur in a project. Once the potential risks of a project have been identified, project manager can determine the effects and predict unlike situations. To understand this better it is useful to analyse risk in terms of its components. The source ? event
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