10.2 Explain Proactive and Reactive Responses to risks

Question 1

What are the responses to risks ?

Answer 1

Accept
Avoid
Transfer
Reduce

Question 2

What are the responses to opportunities ?

Answer 2

Enhance
Exploit
Reject
Share

Question 3

Is avoiding a reactive or proactive response and why ?

Answer 3

Proactive - because it is planned and implemented in advance

Question 4

Why would a project manager avoid a risk

Answer 4

To avoid the impact the risk can have on the project objectives

Question 5

Depending on what , what would a project manager do to avoid a risk and why ?

Answer 5

Depending on the risk , the project manager could Change the projects objectives and practices to discount the cause of the risk

Question 6

What could changing a projects objectives and practices to avoid a risk be seen as and why ?

Answer 6

An inconvenience due to the nature of a risk where is is uncertain that the risk would actually occur

Question 7

How can a project manager determine whether it is worth avoiding a risk ?

Answer 7

Through the use of a risk register , determining the likelihood of a risk occurring and the impact a risk would have on a project

Question 8

When the project uses a risk register what does it allow the project manager to do when determining whether to avoid a risk and do what ?

Answer 8

Use it as baseline to decide whether to avoid a risk and therefore make changes to a project initial objective.

Question 9

What does avoiding a risk seeks to do and how ?

Answer 9

Eliminate the risk by changing the cause of the risk

Question 10

An example of avoiding a risk ?

Answer 10

Risk : insufficient resources may lead to project delay

Avoidance : adjusting the project schedules to ensure resources are available when needed or replacing or deaconing the project deliverables with something else

Question 11

What does reducing a risk tackle ?

Answer 11

The source of the risk

Question 12

Is reducing a risk a proactive or reactive response and why ?

Answer 12

Proactive response as it focuses on the cause of risk

Question 13

What is reducing a risk seen as ?

Answer 13

A preventive and good effective option for risk control

Question 14

Actions to reduce a risk reduces what and in terms of what ?

Answer 14

Actions to reduce a risk reduces the impact of a threat in terms of

It’s probability of occurring or it’s impact on the project are considered and implemented

Question 15

When reducing a risk what does a project manager implement and what is it usually associated with ?

Answer 15

A project would implement a preventative action usually associated with cost and time management

Question 16

What could the action to reduce a threat potentially be to a project ?

Answer 16

The action to reduce a threat could potentially be a cost to the project

Question 17

When reducing a risk What would the project manager need to ensure when implementing a preventive action is ?

Answer 17

Worthwhile and cost less than the expected risk value

Question 18

Why would you need to monitor the risk and action when reducing a risk ?

Answer 18

The risk and action will need to be monitored to ensure that that action taken does in fact reduce the risk as expected

Question 19

Is transferring a risk a proactive or reactive response and what happens ?

Answer 19

It is a proactive response where the risk os transferred from one party to another

Question 20

Why is the risk / threat transferred , to who and why ?

Answer 20

If the risk / threat is deemed as outside the capacity or capability of the host organisation they may choose to transfer the risk to an external entity or a Third party who are deemed more capable of managing the risk

Question 21

What does transferring a risk not prevent and what would the project manager need to do and why ?

Answer 21

Transferring the risk does not prevent the risk from occurring therefore the project manager will need to understand how the 3rd party is managing the risk as it may still impact the project

Question 22

What is another way of transferring a risk ?

Answer 22

Through insurance

Question 23

What are the various reasons a project manager may choose to transfer a risk ?

Answer 23

• lacking expertise or resource
• mitigating financial risk
• complying with legal regulations
• focusing on core project activities

Question 24

What is risk transfer and what does it ensure

Answer 24

Risk transfer is a strategic decision , made by the project manager ensuring that the risks are managed by those best equipped to do so

Question 25

What does transferring a risk require and why ?

Answer 25

Transferring a risk requires a balanced approach as it likely that elements of residual risk will remain on both sides

Question 26

Is accepting a risk a proactive or reactive response and what happens to the risk and how ?

Answer 26

A reactive response where the risk is accepted with a contingency plan to be implemented in case the risk materialises.

Question 27

When is the option of accepting a risk chosen ?

Answer 27

When the project manager and project sponsor agree there is no viable approach to avoid or reduce the risk or when the probability and/or impact of the risk is low

Question 28

Where does the risk remain when accepted and why ?

Answer 28

The risk / threat remains in the risk register and will continue to monitored in case the probability of the impact changes and a more proactive response needs to be chosen.

Question 29

What happens when a decision to accept a risk is choosen and in relation to what?

Answer 29

A contingency plan can be established in relation to the schedule and cost

Question 30

What should happen to the status of an accepted risk and what should happen with the impact of an accepted risk ?

Answer 30

The status of the risk should be actively monitored and any impact of that risk on stakeholders should be reported accordingly

Question 31

When is the response to accept a risk chosen by the project sponsor ?

Answer 31

The response to accept a risk is usually choose by the project sponsor on two situations:

1. Where the risk is within the risk tolerance
2. The cost of reducing the risk is to high

Question 32

Accepting a risk is a _________ response where the risk is accepted with a __________ to be implemented should the risk ____________

Answer 32

Reactive
Contingency plan
Materialise

Question 33

A risk is accepted when the project manager and sponsor agree that there are no viable approaches to _______ or _______ the risk or the _______and/or _______ of the risk is ________

Answer 33

Reduce
Avoid
Impact
Likelihood
Low

Question 34

When a risk is accepted the threat remains on the _________ and will continue to be _________ in case either the _______ or the _______ changes and a more proactive approach needs to be chooses

Answer 34

Risk register
Monitored
Impact
Probability

Question 35

Where a decision to accept a risk is chosen a __________ can be established in relation to ___________ and ________ and the status of the risk should be actively _______ on a ___________ and any impact of this risk on __________ should be ______ accordingly

Answer 35

Contingency plan
Cost and schedule
Monitored
Regular Basis
Stakeholders
Reported

Question 36

The response to accept a risk is usually agreed by the sponsor in two situations : the risk is within the ________or the cost of trying to ________ the risk is too ____

Answer 36

Risk tolerance
Reduce
High

Question 37

Transferring a risk is a _________ response where the risk is ______ from one ______ to ______

Answer 37

Proactive
Transferred
Party
Another

Question 38

A risk is transferred if the risk / threat is deemed as _______ the ______ and ______ of the ________ they may choose to transfer the risk to ________ or a ______ who are deemed _______ of ______ the risk

Answer 38

Outside
Capacity
Capability
Host organisation
An external Entity
Third party
Capable
Managing

Question 39

Transferring a risk does not ________ the risk from ______ therefore the project manager will need to understand how the third party is __________ the risk as it can still _______ the project

Answer 39

Prevent
Occurring
Managing
Impact

Question 40

When transferring a risk the third party will need to be the one to _________ an ______ to ________ with the risk and be the ones to _____ any ______ associated with that action

Answer 40

Implement
Action
Deal
Bare
Cost

Question 41

Another way of transferring a risk is through taking out ______

Answer 41

Insurance

Question 42

A project manager may choose to transfer a risk for various reasons :

Lacking _____ or ______
________ Financial risk
_______ with ______________
Or focusing on ___________

Answer 42

Resources or expertise
Mitigating
Complying with legal regulations
Core project activity

Question 43

Transferring a risk is a _______ made by the _________ and ensures that the risks are _______ by those best _______ to do so

Answer 43

Strategic decision
Project manager
Managed
Equipped

Question 44

Transferring a risk requires a _____________ as it is likely that ______ of _________ risk will remain on _______

Answer 44

Balanced approach
Elements
Residual
Both sides

Question 45

Reducing a risk tackles ……?

Answer 45

The source of the risk

Question 46

Reducing a risk is a ________ response and focuses on the ______ of the risk

Answer 46

Proactive
Cause

Question 47

Reducing a risk is seen as a _______ and good _______ option for _______

Answer 47

Preventive and good effective option for risk control

Question 48

When reducing a risk actions either reduce the _________of the threat in terms of the ___________ of ______________ or its ___________ on a project is_______ and ________

Answer 48

Impact of the threat in terms of the probability of occurring or it’s impact are considered and implemented

Question 49

When reducing a risk the project manager would implement an __________ action usually associated with ________

Answer 49

Preventive
Cost and time

Question 50

When reducing a risk the project manager needs to ensure that the cost of _______the preventive action is _______ and __________ than the expected ________

Answer 50

Implementing
Worthwhile and cost lest than the expected risk value

Question 51

The action to reduce a threat could potentially be a _____________ therefore the risk and ________ implemented will need to be _______ to ensure that the __________ does ___________ risk as expected

Answer 51

Cost to the project
Action
Monitored
Action taken
Reduce

Question 52

Avoiding a risk is a ________ response as it is ________ and _________ in advanced

Answer 52

Proactive
Planned
Implemented

Question 53

Avoiding a risk avoids the _________ the risk could have on the projects _______ where depending on the ________ the project manager could change the projects __________ or __________ in order to ________ the _______ of the risk

Answer 53

Impact
Objectives
Risk
Objectives or practices
Discount
Cause

Question 54

Avoiding a risk can be seen as an __________ due to the ________ of risks where it is ________ that the risk will actually _______. However through the use of a __________ and determining the __________ of the risk ________ and the ________ the risk would have on the project the PM can use that as a ___________ to decide to ________ the risk and therefore make _________ to the initial _________

Answer 54

Inconvenience
Nature
Uncertain
Occur
Risk register and defending the Likelihood of the risk Occurring
Impact the risk would have in the project
Baseline to decide to avoid
Changes
Objectives

Question 55

Avoiding a risk seeks to ___________ a risk by changing the _______ of the _______.

Answer 55

Eliminate a risk
Cause of the thread

Question 56

Examples of avoiding a risk - insufficient ________ may lead to _________ . This can be avoided by ___________ additional ________ or by ________ the projects _________ to ensure _________ are ________ when needed.

Answer 56

Resources may lead to project delays
Allocating additional resources
Changing the project schedule
Resources are available when needed

Question 57

Is exploiting a risk a proactive or reactive response ?

Answer 57

A proactive response

Question 58

What does exploiting a risk do and how ?

Answer 58

Maximises both the probability and impact of the opportunity by implanting a action to exploit the risk and gain maximum benefit/ advantage

Question 59

What does exploiting a risk allow you to do ?

Answer 59

Gain maximum benefit/advantages

Question 60

How does exploiting a risk allow you to gain maximum benefit / advantage ?

Answer 60

By implementing an action to exploit the risk

Question 61

What needs to be clearly understood when exploiting a risk and who does it need to be agreed by

Answer 61

The implications need to be clearly understood and agreed to by all stakeholders

Question 62

Why does the implications of exploiting a risk need to be clearly understood and agreed to by all stakeholders ?

Answer 62

Because exploiting a risk often requires a change during the project

Question 63

What kind of change does exploiting a risk often require ? And may benefit what ?

Answer 63

A change in scope , acceptance of more risks , or a change to timescales and budget and may only benefit so stakeholders

Question 64

Exploiting a risk is taking advantage of what ? And to do what?

Answer 64

Favourable conditions to Maximise project benefits

Question 65

Examples of exploiting a risk could be ? And results in what ?

Answer 65

Strategically allocating resources or accelerating timelines.

Resulting in cost savings or efficiency gains

Question 66

Is enhancing an opportunity a proactive or reactive response and why ?

Answer 66

Proactive , Enhancing a risk is strategic / tactical to enhance the opportunity by increasing it likelihood and or impact.

Question 67

What does enhancing a risk do to an opportunity ?

Answer 67

Increases the likelihood and or impact

Question 68

What is an example of enhancing a risk and what would the project do ?

Answer 68

An opportunity could be identified to deliver the project earlier and achieve a reward payment from the client.

The project could take a practical approach and revise the project schedule and fast track tasks while adding resource to shorten their duration

Question 69

What is important to consider when enhancing a risk and why ?

Answer 69

It is important to consider the cost of the actions when enhancing a risk as it should not be more that the reward pavement on offer

Question 70

What does enhancing an opportunity further increase ?

Answer 70

Enhancing an opportunity further increases the potential benefits and value derived from a favourable risk

Question 71

What is the difference between exploiting and enhancing a risk ?

Answer 71

Exploiting a risk maximises the probability and or impact of a risk

Enhancing a risk increases the likelihood and or impact of a risk

Question 72

Is sharing a risk proactive or reactive ?

Answer 72

Sharing a risk is proactive

Question 73

What happens when a risk is shared ? And why ?

Answer 73

Collaboration takes place to increase the chances of the opportunity being realised through sharing some of the responsibility with another party

Question 74

How does sharing a risk increase the chances of the opportunity being realised ?

Answer 74

Through sharing some of the responsibility with another party.

Question 75

Why would the risk be shared with another party ?

Answer 75

They may be better placed to help realise the benefits associated with the risk

Question 76

What may the other party be better placed to realise when sharing a risk ?

Answer 76

The benefits associated with that risk

Question 77

What is likely to be required from both parties when sharing a risk ?

Answer 77

A cost investment from both sides is likely to be required when sharing a risk

Question 78

Example of sharing a risk :

Answer 78

A contract has a bonus to be gained from delivering early the project could share the opportunity with the supplier

Incentivising them to finish earlier in support of the end goal

Question 79

What does sharing a risk promote and leverage ? And what are the result of this ?

Answer 79

Sharing a risk promotes collaboration and leverages expertise enhancing the likelihood of successfully releasing the opportunity

Question 80

Is rejecting a risk proactive or reactive and why does it happen ?

Answer 80

Rejecting a risk is proactive and may be chosen as a response when the proactive pursuit of an opportunity is rejected because it is deemed of little value or the benefits associated with it are not deemed significant enough to justify actions

Question 81

Why may a risk be rejected ?

Answer 81

When the proactive pursuit of the risk is deemed of little value or the benefits associated with it are deemed not significant enough to justify action

Question 82

What is deemed of little value when rejecting a risk?

Answer 82

The proactive pursuit of the opportunity

Question 83

What is deemed as not significant enough to justify an action when rejecting a risk ?

Answer 83

The benefits associated with it

Question 84

A risk may rejected because the cost or time needed to implement an action may ?

Answer 84

Outweigh the benefits associated with releasing the opportunity

Question 85

What is the reason for a project team rejecting a rosk ?

Answer 85

A project team would naturally take advantage of the opportunity should it arise but not take proactive steps to pursue it further

Question 86

Exploiting a risk is a _________ response to _________ both the _________ and ______ of the opportunity by ________ an ________ to ________ the risk and gain maximum ______ / ________

Answer 86

Proactive
Maximise
Probability
Likelihood
Implementing
Action
Maximise
Benefit / advantage

Question 87

When exploiting a risk the ________ needs to be clearly _________ and agreed upon by all _________ because exploiting a risk often requires a ________ during the ______ e.g a change in _______ acceptance of more ______ or a change to _____ and _____ and may only benefit ___________

Answer 87

Implications
Understood
Stakeholders
Change
Project

Scope
Risk
Budget and timescales
Some stakeholders

Question 88

Exploiting a risk is taken _________ of ___________ to maximise project ______ e,g strategically allocating ___________ or accelerating _______ resulting in _________ savings or _______ gains

Answer 88

Advantage
Favourable conditions
Benefits
Resources
Timelines
Cost savings or gains

Question 89

Enhancing a risk is a _______ response because it is _________\ to enhance the opportunity by ________ its ________ and or _______

Answer 89

Proactive response
Strategic / tactical
Increasing
Likelihood and or impact

Question 90

An example of enabling a risk could be an opportunity identified to __________ the project _____ and achieve a _____________ from the client. The project team may take a _________ approach by revisiting the projects ___________ and fast__________ tasks , whilst also adding ____________ to task to shorten their ______

Answer 90

Deliver
Early
Reward payment
Tactical approach
Schedule
Fast tracking
Addicaonal resources to tasks
Duration

Question 91

When enabling a a risk it is important to consider the _____ these actions as it should not be ______ than the ____________ on offer

Answer 91

Cost
More
Reward payment on offer

Question 92

Enhancing an opportunity further increase the potential __________ and _______ derived from a ___________

Answer 92

Benefits
Value
Favourable situation

Question 93

Sharing a risk is a ________ response where ______ takes place to _________ the chances of the opportunity being ________ through sharing some of the _________ with another ______ who may be better placed to help _________ the __________ associated with the opportunity

Answer 93

Proactive
Collaboration
Increase
Realased
Responsibility
Party
Realise
Benefits

Question 94

When sharing a risk a ______________ from _______is likely to be _______ for example if a contract has a _______ to be gained from delivering the project early, the project could choose to _______ the opportunity with the _______ incentivising them to finish earlier in support of the end goal.

Answer 94

Cost investment
Both side
Required
Bonus
Share
Supplier

Question 95

Sharing a risk promotes _________ and _______ expertise enhancing the ________ likelihood of ________ realising the opportunity

Answer 95

Collaboration
Leverages
Successfully

Question 96

Rejecting a risk is a __________ response and may be chosen when the _______ pursuit of an opportunity is _______because it is deemed of _________ or the benefits associated with it are deemed not _______ enough to justify actions

Answer 96

Proactive
Proactive pursuit
Rejected
Little value
Significant

Question 97

A risk may be rejected because the _____ or _______ needed to implement an action may ________ the benefits associated with _____ the opportunity

Answer 97

Cost or time
Our weight
Realising the opportunity

Question 98

In cases of rejecting a risk , the project team would naturally __________ of the opportunity should it arise _______ but not take ________to pursue it further

Answer 98

Take advantage
Natural
Proactive steps