Free Project Risk Management Risk Response Strategies Questions and Answers — Questions and Answers
Question 1: A project to build a data center in a coastal area identifies a high risk of project delays due to potential hurricane activity during the planned construction period. The project team decides to purchase and pre-position advanced, weather-resistant building materials and to create a detailed emergency shutdown and startup plan to minimize downtime after a storm. Which risk response strategy is the team employing?
- Mitigate (Correct answer)
- Avoid
- Transfer
- Accept
Correct answer: Mitigate
The team is taking proactive steps to reduce the probability and/or impact of the hurricane risk. They are not eliminating the threat entirely (Avoid) or shifting the financial responsibility to a third party (Transfer). Purchasing specialized materials and having a response plan lessens the potential damage and delay, which is the definition of mitigation.
Question 2: Which of the following best describes the "Share" risk response strategy for opportunities?
- Paying a premium to a third party to manage a threat.
- Forming a joint venture or partnership to capitalize on an opportunity that the project cannot capture on its own. (Correct answer)
- Taking proactive steps to increase the probability of an opportunity occurring.
- Eliminating the uncertainty associated with a positive risk to ensure it happens.
Correct answer: Forming a joint venture or partnership to capitalize on an opportunity that the project cannot capture on its own.
The "Share" strategy for positive risks (opportunities) involves allocating some or all of the ownership of the opportunity to a third party who is best able to capture the benefit for the project. A joint venture is a classic example of this. Paying a premium for a threat is "Transfer". Increasing the probability is "Enhance," and ensuring it happens is "Exploit."
Question 3: During a software development project, the project manager identifies a significant risk related to a new corporate-wide data privacy regulation that will impact not only their project but several other projects and operational departments. The project manager does not have the authority to implement the necessary organization-wide policy changes. What is the most appropriate risk response strategy for the project manager to take in this situation?
- Accept
- Mitigate
- Escalate (Correct answer)
- Avoid
Correct answer: Escalate
The identified risk is outside the project's boundaries and beyond the project manager's authority to manage. The appropriate response is to escalate the risk to the relevant higher-level authority within the organization (e.g., program manager, portfolio manager, or a governance body) who can address it effectively.
Question 4: A project team identifies a potential delay in a supplier's delivery. They decide not to take immediate action but develop a plan to fast-track an alternative supplier if the primary supplier's delivery is delayed by more than one week. This pre-defined plan is an example of which of the following?
- A secondary risk
- A contingent response strategy (Correct answer)
- A residual risk
- A risk workaround
Correct answer: A contingent response strategy
A contingent response strategy (or contingency plan) is a pre-planned response that is only executed if a specific trigger event occurs. In this case, the trigger is the delivery being delayed by more than one week. A workaround is an unplanned response to a risk that has occurred.
Question 5: A marketing project team discovers an opportunity to get early access to a new social media analytics tool that could significantly improve their campaign's effectiveness. To ensure they capitalize on this, the project manager reassigns the team's top analyst to work exclusively on integrating the new tool as quickly as possible. Which strategy for responding to a positive risk is being implemented?
- Exploit (Correct answer)
- Enhance
- Share
- Accept
Correct answer: Exploit
The "Exploit" strategy is used for high-priority opportunities where the organization wants to ensure the opportunity is fully realized. By dedicating top resources, the project manager is taking decisive action to make certain the project captures the benefit, removing any uncertainty about its achievement. "Enhance" would involve increasing the probability or impact, but "Exploit" focuses on guaranteeing its occurrence.
Question 6: Which risk response strategy involves acknowledging a risk but not taking any proactive action, instead dealing with the consequences only if the risk event occurs?
- Active Acceptance
- Risk Transfer
- Passive Acceptance (Correct answer)
- Risk Mitigation
Correct answer: Passive Acceptance
Risk acceptance can be active or passive. Active acceptance involves creating a contingency plan to be executed if the risk occurs. Passive acceptance involves no proactive planning; the team will simply deal with the risk if it materializes, often through a workaround.
Free Project Risk Management Risk Response Strategies Questions and Answers
A project to build a data center in a coastal area identifies a high risk of project delays due to potential hurricane activity during the planned construction period.
The project team decides to purchase and pre-position advanced, weather-resistant building materials and to create a detailed emergency shutdown and startup plan to minimize downtime after a storm.
Which risk response strategy is the team employing?