Summary Risk management is a major key to successful project management in the business world. With significant budget overruns alongside significant delays, the Sydney Opera House is a true example of poor risk management. Risk management requires effective planning, budgeting and scheduling. First, the highest risks must be identified and assessed to find methods to reduce their impact and exposure. Then, the factors causing the risk should be addressed while factors that only correlate with the negative impact but do not affect it can be omitted. At this stage, the interrelationship between different risks must be taken into account to identify the main factors that need to be addressed in order to ensure the efficiency and stability of the project operation. This report clearly shows the importance of the role of “risk management” for the project. of the Sydney Opera House and how risks are intended to be managed in areas such as planning, budgeting, cost control, quality and project schedule. Additionally, it demonstrates that risk must be identified before it can be effectively managed. With proper identification, projects go into blind mode and potential threats are ignored, which can easily lead to a successful project becoming a failed project. A poorly designed risk management plan will lead to additional risks and uncertainties, which will only lead to a more complex and uncontrollable situation in terms of effective project management.IntroductionRisk management is one of the most important practices in the field of project management. Project success and risk management often go hand in hand. An interesting aspect of project management is that a project can stimulate...... middle of paper ......nt Institute, Sylva, North Carolina, USA.(16) Ramroth, Jr. , William G., 2006, Project management for design professionals, . Chicago, IL: AEC Education.(17) Sydney Opera House, 2009, “The House History Proudly Sponsored by Baulderstone Hornibrook.” ,10-5-10,http://www.sydneyoperahouse.com/about/house_history_landing.aspx.(18) Söderlund, Jonas, Christian Berggren and Christian Anderson, 2001, “Clients, Contractors and Consultants: The Consequences of Organizational Fragmentation in contemporary project environments. Project Management Journal, 32.3, pp.39-48.(19) UNESCO, 2009, Sydney Opera House, accessed 10-5-10, World Heritage, http://whc.unesco.org/en/list/166. (20) Weaver, P. and L. Bourne, 2002, Projects – Fact or Fiction? PMI Conference – Maximizing Project Value, Melbourne. (21) Winch, GM, 2003, Construction Project Management. Oxford, Blackwell Pub