Saturday, December 3, 2011

What is Risk Tolerance?

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Organizations and stakeholders are willing to accept varying degrees of risk. Risk Tolerance means whether the risk can be tolerated or not. It is the willingness of the organization or a project team to accept or avoid a risk. For example, a company might have a policy that any risk that impacts their customer relationship will not be tolerated.

A project manager should understand his risk tolerance level as well as that of the project team and the organization as a whole.

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