Limitations
Prioritizing the risk management processes too highly could keep an organization from ever completing a project or even getting started. This is especially true if other work is suspended until the risk management process is considered complete.
It is also important to keep in mind the distinction between risk and uncertainty. Risk can be measured by impacts x probability.
If risks are improperly assessed and prioritized, time can be wasted in dealing with risk of losses that are not likely to occur. Spending too much time assessing and managing unlikely risks can divert resources that could be used more profitably. Unlikely events do occur but if the risk is unlikely enough to occur it may be better to simply retain the risk and deal with the result if the loss does in fact occur. Qualitative risk assessment is subjective and lacks consistency. The primary justification for a formal risk assessment process is legal and bureaucratic.
Read more about this topic: Risk Management
Famous quotes containing the word limitations:
“That all may be so, but when I begin to exercise that power I am not conscious of the power, but only of the limitations imposed on me.”
—William Howard Taft (1857–1930)
“The only rules comedy can tolerate are those of taste, and the only limitations those of libel.”
—James Thurber (1894–1961)
“Much of what contrives to create critical moments in parenting stems from a fundamental misunderstanding as to what the child is capable of at any given age. If a parent misjudges a child’s limitations as well as his own abilities, the potential exists for unreasonable expectations, frustration, disappointment and an unrealistic belief that what the child really needs is to be punished.”
—Lawrence Balter (20th century)