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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 specificationManagement will under-perform against expectationsCollapse of contractorsInsolvency of promoterFailure of suppliers to meet contractual commitments; this could be in terms of quality, quantity, timescales or their own exposure to riskInsufficient capital revenuesMarket fluctuationsFraud / theftPartnerships failing to deliver the desired outcomeThe situation being non-insurable (or cost of insurance outweighing the benefit)Lack of availability of capital investment

Economic / financial / market

Exchange rate fluctuationInterest rate instabilityInflationShortage of working capitalFailure to meet projected revenue targetsMarket developments will adversely affect plans

Legal and regulatory

New or changed legislation may invalidate assumptions upon which the activity is basedFailure to obtain appropriate approval, for example, planning, consentUnforeseen inclusion of contingent liabilitiesLoss of intellectual property rightsFailure to achieve satisfactory contractual arrangementsChanges in tax or tariff structure

Organisational / management / human factors

Management competenceInadequate corporate policiesInadequate adoption of management practicesPoor leadershipKey personnel have inadequate authority to fulfil their rolesPoor staff selection proceduresLack of clarity over roles and responsibilitiesVested interests creating conflict and compromising the overall aimsIndividual or group interests given unwarranted priorityPersonality clashesIndecision or inappropriate decision makingLack of operational supportInadequate or inaccurate informationHealth and safety constraints


Change of government policy (national or international), for example, approach to nationalisationChange of governmentWar and disorderAdverse public opinion / media intervention


National disastersStorms, flooding, tempestsPollution incidentsTransport problems, including aircraft / vehicle collisions

Technical / operational / infrastructure

Inadequate designProfessional negligenceHuman error / incompetenceInfrastructure failureOperation lifetime lower than expectedIncreased dismantling / decommissioning costsSafety being compromisedPerformance failureResidual maintenance problemsScope ‘creep’Unclear expectationsBreaches in security / information securityLack or inadequacy of business continuity
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.