Chapter 11: Project Risk Management Terms

Question 1

A risk response appropriate for both positive and negative risks, but often used for smaller risks within a project.

Answer 1

Acceptance

Question 2

Risks that have an uncertain, unclear nature, such as new laws or regulations, the marketplace conditions, and other risks that are nearly impossible to predict.

Answer 2

Ambiguity risks

Question 3

A risk response to avoid the risk.

Answer 3

Avoidance

Question 4

The most common approach to risk identification; usually completed by a project team with subject matter experts to identify the risks within the project.

Answer 4

Brainstorming

Question 5

These risks may have negative or positive outcomes. Examples include using a less experienced worker to complete a task, allowing phases or activities to overlap, or forgoing the expense of formal training for on-the-job education.

Answer 5

Business risks

Question 6

A ranking approach to identify the probability and impact by using a numerical value, from .01 (very low) to 1.0 (certain).

Answer 6

Cardinal scales

Question 7

A quick and cost-effective risk identification approach.

Answer 7

Checklists

Question 8

The consideration of the risk ranking scores that takes into account any bias, the accuracy of the data submitted, and the reliability of the nature of the data submitted.

Answer 8

Data precision

Question 9

A method to determine which of two or more decisions is the best one. The model examines the costs and benefits of each decision’s outcome and weighs the probability of success for each of the decisions.

Answer 9

Decision tree

Question 10

An anonymous method of querying experts about foreseeable risks within a project, phase, or component of a project. The results of the survey are analyzed by a third party, organized, and then circulated to the experts.

There can be several rounds of anonymous discussion with the _____Technique, without fear of backlash or offending other participants in the process. The goal is to gain consensus on project risks within the project.

Answer 10

Delphi Technique

Question 11

A risk response that attempts to enhance the conditions to ensure that a positive risk event will likely happen.

Answer 11

Enhancing

Question 12

A risk response that is appropriate for both positive and negative risk events that may outside of the project manager’s authority to act upon.

Answer 12

Escalating

Question 13

The monetary value of a risk exposure based on the risk’s probability and impact in the risk matrix. This approach is typically used in quantitative risk analysis because it quantifies the risk exposure.

Answer 13

Expected monetary value (EMV)

Question 14

A risk response that takes advantage of the positive risks within a project.

Answer 14

Exploiting

Question 15

These risks are outside of the project, but directly affect it—for example, legal issues, labor issues, a shift in project priorities, or weather. “Force majeure” risks call for disaster recovery rather than project management. These are risks caused by earthquakes, tornadoes, floods, civil unrest, and other disasters.

Answer 15

External risks

Question 16

System or process flowcharts show the relationship between components and how the overall process works. These are useful for identifying risks between system components.

Answer 16

Influence diagrams

Question 17

These cause-and-effect diagrams are also called fishbone diagrams and are used to find the root cause of factors that are causing risks within the project.

Answer 17

Ishikawa diagrams

Question 18

Low-priority risks are identified and assigned to a watch list for periodic monitoring.

Answer 18

Low-priority risk watch list

Question 19

A risk response effort to reduce the probability and/or impact of an identified risk in the project.

Answer 19

Mitigation

Question 20

A simulation technique that got its name from the casinos of Monte Carlo, Monaco. The simulation is completed using a computer software program that can simulate a project, using values for all possible variables, to predict the most likely model.

Answer 20

Monte Carlo technique

Question 21

A ranking approach that identifies and ranks the risks from very high to very unlikely or to some other value.

Answer 21

Ordinal scales

Question 22

The performing organization can contribute to the project’s risks through unreasonable cost, time, and scope expectations; poor project prioritization; inadequate funding or the disruption of funding; and competition with other projects for internal resources.

Answer 22

Organizational risks

Question 23

A prompt list used for risk identification. PESTLE examines risks in the Political, Economic, Social, Technological, Legal, and Environmental domains.

Answer 23

PESTLE

Question 24

A matrix that ranks the probability of a risk event occurring and its impact on the project if the event does happen; used in qualitative and quantitative risk analyses.

Answer 24

Probability and impact matrix

Question 25

These risks deal with faults in the management of the project: the unsuccessful allocation of time, resources, and scheduling; unacceptable work results; and poor project management.

Answer 25

Project management risks

Question 26

These risks have only a negative outcome. Examples include loss of life or limb, fire, theft, natural disasters, and the like.

Answer 26

Pure risks

Question 27

This approach “qualifies” the risks that have been identified in the project. Specifically, qualitative risk analysis examines and prioritizes risks based on their probability of occurring and their impact on the project should they occur.

Answer 27

Qualitative risk analysis

Question 28

This approach attempts to numerically assess the probability and impact of the identified risks. It also creates an overall risk score for the project. This method is more in-depth than qualitative risk analysis and relies on several different tools to accomplish its goal.

Answer 28

Quantitative risk analysis

Question 29

An ordinal scale that uses red, amber, and green (RAG) to capture the probability, impact, and risk score.

Answer 29

RAG rating

Question 30

Risks that are expected to remain after a risk response.

Answer 30

Residual risks

Question 31

A project ______ is an uncertain event or condition that can have a positive or negative impact on the project.

Answer 31

Risk

Question 32

The systematic process of combing through the project, the project plan, the work breakdown structure, and all supporting documentation to identify as many risks that may affect the project as possible.

Answer 32

Risk identification

Question 33

A project management subsidiary plan that defines how risks will be identified, analyzed, responded to, and monitored within the project. The plan also defines the iterative risk management process that the project is expected to adhere to.

Answer 33

Risk management plan

Question 34

The agreed-upon approach to the management of the project risk processes.

Answer 34

Risk management planning

Question 35

The individuals or entities that are responsible for monitoring and responding to an identified risk within the project.

Answer 35

Risk owners

Question 36

The ______ is a project plan component that contains all of the information related to the risk management activities. It’s updated as risk management activities are conducted to reflect the status, progress, and nature of the project risks.

Answer 36

Risk register

Question 37

The _______ explains the overall project risks and provides summaries about the individual project risks.

Answer 37

Risk report

Question 38

An audit to test the validity of the established risk responses.

Answer 38

Risk response audit

Question 39

The level of ownership an individual or entity has over a project risk.

Answer 39

Risk responsibilities

Question 40

The calculated score based on each risk’s probability and impact. The approach can be used in both qualitative and quantitative risk analysis.

Answer 40

Risk score

Question 41

_________ aims to find out why a risk event may be occurring, the causal factors for the risk events, and then, eventually, how the events can be mitigated or eliminated.

Answer 41

Root cause identification

Question 42

New risks that are created as a result of a risk response.

Answer 42

Secondary risks

Question 43

A quantitative risk analysis tool that examines each risk to determine which one has the largest impact on the project’s success.

Answer 43

Sensitivity analysis

Question 44

A risk response that shares the advantages of a positive risk within a project.

Answer 44

Sharing

Question 45

______ analysis is the process of examining the project from the perspective of each characteristic: strengths, weaknesses, opportunities, and threats.

Answer 45

SWOT analysis

Question 46

A prompt list used in risk identification to examine the Technical, Environmental, Commercial, Operational, and Political factors of the project.

Answer 46

TECOP

Question 47

Technical risks are associated with new, unproven, or complex technologies being used on the project. Changes to the technology during the project implementation can also be a risk. Quality risks are the levels set for expectations of impractical quality and performance.

Answer 47

Technical, quality, or performance risks

Question 48

A risk response that transfers the ownership of the risk to another party. Insurance, licensed contractors, or other project teams are good examples of _______. A fee and contractual relationships are typically involved with the _______ of a risk.

Answer 48

Transference

Question 49

A type of risk based on the variations that may occur in the project, such as production, number of quality errors, or even the weather.

Answer 49

Variability risks

Question 50

A prompt list used in risk identification that examines the Volatility, Uncertainty, Complexity, and Ambiguity of risk factors within the project.

Answer 50

VUCA