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PRINCE2 - Risk categories

Risk categories

The following categories can be used as a starting point for identifying an organisation’s main areas of risk in relation to projects or programmes.

Strategic / commercial

Under-performance to specification Management will under-perform against expectations Collapse of contractors Insolvency of promoter Failure of suppliers to meet contractual commitments; this could be in terms of quality, quantity, timescales or their own exposure to risk Insufficient capital revenues Market fluctuations Fraud / theft Partnerships failing to deliver the desired outcome The situation being non-insurable (or cost of insurance outweighing the benefit) Lack of availability of capital investment

Economic / financial / market

Exchange rate fluctuation Interest rate instability Inflation Shortage of working capital Failure to meet projected revenue targets Market developments will adversely affect plans

Legal and regulatory

New or changed legislation may invalidate assumptions upon which the activity is based Failure to obtain appropriate approval, for example, planning, consent Unforeseen inclusion of contingent liabilities Loss of intellectual property rights Failure to achieve satisfactory contractual arrangements Changes in tax or tariff structure

Organisational / management / human factors

Management competence Inadequate corporate policies Inadequate adoption of management practices Poor leadership Key personnel have inadequate authority to fulfil their roles Poor staff selection procedures Lack of clarity over roles and responsibilities Vested interests creating conflict and compromising the overall aims Individual or group interests given unwarranted priority Personality clashes Indecision or inappropriate decision making Lack of operational support Inadequate or inaccurate information Health and safety constraints


Change of government policy (national or international), for example, approach to nationalisation Change of government War and disorder Adverse public opinion / media intervention


National disasters Storms, flooding, tempests Pollution incidents Transport problems, including aircraft / vehicle collisions

Technical / operational / infrastructure

Inadequate design Professional negligence Human error / incompetence Infrastructure failure Operation lifetime lower than expected Increased dismantling / decommissioning costs Safety being compromised Performance failure Residual maintenance problems Scope ‘creep’ Unclear expectations Breaches in security / information security Lack or inadequacy of business continuity

Non - PRINCE2 information

This product contains EVERYTHING in the publications:

Managing Successful Projects with PRINCE2 - 2005 edition
Managing successful Projects with PRINCE2 – 2009 edition
Directing Projects with PRINCE2.
The Complete Project Management package.

And much more besides - at a fantastic price.