During the planning phase of a project, the project manager is determining the levels of uncertainty the organization is willing to accept in relation to the project's objectives. What is this an example of?
This scenario exemplifies the process of establishing risk appetite and thresholds for a project. Risk appetite refers to the degree of uncertainty an organization or individual is willing to accept in anticipation of a reward. Risk thresholds express the degree of acceptable variation around a project objective and are typically determined during the planning phase to guide risk management activities throughout the project’s lifecycle.
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