In the contemporary business world, the term risk is prevalent. Managers spend a significant chunk of their time thinking about mitigation of risks, which is necessary, but caution is needed to prevent the lagging behind of schedules and failures to introduce new progressive strategies. This fact is also prevalent in projects. Project managers spend significant time mitigating and dealing with potential risks. The most common hazards experienced with project management include cost risk, schedule risks, performance risks, operational risks, and governance risks among others. What is clear with these perils is that managers anticipate them and therefore introduce new plans to guard against future occurrences. However, in the modern business world, an event could occur unexpectedly, and it could lead to detrimental non-reversible effects. Proper analysis of the concept of risk will be crucial in the application of project management. Some of the main areas covered in class concerning risks include risk management approaches, identification of scope, product schedule and cost/budget risks.

Risk Identification and Scope

Risk identification is one of the crucial practices in any project. The identification process begins with determining the objective and the scope of a risk. Risk identification is through establishment of effective risk plan. The plan describes the relationships on risk management processes, general portfolio, and the management processes (PMI, 2017). Typically, the risk management plan incorporate components such as strategic risk management, corporate governance processes and enterprise risk management (PMI, 2019) . Risk identification is possible especially with the case of predictable/traditional risks. Outlining the objectives of risk management is essential in the understanding the scope of risk management. In most instances, the objectives of risk management are crucial in the establishment risk management processes and their execution and the Integration of risk management processes in all activities of the organization.

Understanding the definition of a risk and its context in an organization is the crucial step in risk identification. The basic definition of risk is that it is any unexpected event, which results in a loss. However, in the case of risks such as the Black Swan, it is a rare and unpredictable event, which results in severe consequences. Nassim Nicholas Taleb, a finance professor and a former Wall Street trader, first coined the term in 2007 before the 2008 economic turmoil (Scott, 2020). The writer noted that black swans existed despite the previous assumption that only white swans existed. In that line, Taleb explained that although human beings assume black swan might exist, they are not sure what it brings in their lives. The scholar utilized this concept to explain the events of the 2008 financial turmoil and some of the possible solutions to the matter. According to Taleb black swans are rare but if they occur (like the 2008 recession) accepting their occurrence will help in the prevention of similar events (Taleb, 2007). Conversely, failure to acknowledge its existence would prevent the identification of a concrete solution.