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■ Project risk management aims at reducing the likelihood of project failure. To manage risk in project portfolios, research suggests adopting a perspective that is wider than the individual project risk. The results from a hierarchical multiple regression analysis on a sample of 177 project portfolios suggest that formal risk management at the project level and integration of risk information at the portfolio level are positively associated with overall project portfolio success. Simultaneous risk management at both levels increases this positive effect. Furthermore, risk management at the project level is more important for R&D-dominated project portfolios, whereas the integration of risk information is more important with high levels of turbulence and portfolio dynamics. KEYWORDS: project portfolio management; portfolio risk management; project risk management

As organizations commonly operate in highly dynamic markets with new and changing competitive pressures and customer requirements, they frequently implement risk management practices in the expectation of addressing the challenges that arise from a rapidly changing environment (Raz, Shenhar, & Dvir, 2002). The aim of single project risk management is compliance with cost, time, and quality objectives (Pellegrinelli, 1997). Furthermore, management within a project portfolio incorporates the implementation of the right projects, the alignment of the projects to the strategy, and the balancing of the project portfolio (Elonen & Artto, 2003). In a project portfolio, dependencies between the projects trigger the emergence of new risks in addition to single project risks (Project Management Institute, 2008a); therefore, project risk management alone is insufficient in the context of project portfolios (Olsson, 2008). Insufficient risk management may increase unexpected events because more risks materialize (Kutsch & Hall, 2009). These events may cause cost overruns and delays (