2. Knightian uncertainty is defined as the possible opportunity or threat that can be foreseen, but cannot be quantified. (Example: Should the EU bail out the Greeks or not? We can predict what may happen either way, but cannot quantify the effects, so we're indecisive.)
3. Clausewitzian friction is defined as the accumulated unpredictable events that actually occur when executing plans. It can be predicted nor quantified.
When any of these types of uncertainties threaten a single business case AND can be mitigated by a decision of the project's sponsor/board it's a project uncertainty. If the threat is to multiple business cases OR the mitigation requires more decision power, the uncertainty should be dealt with at program or portfolio level.
Posted by Dennis van der Spoel