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Engman LE2 > LESSON 5 > Flashcards

LESSON 5 Flashcards

1
Q

Uncertainty that may have positive or negative outcomes on the Project in the future.

A

Risk

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2
Q

Positive Risk

A

Opportunity

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3
Q

Negative Risk

A

Threat

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4
Q

Always have a negative effect on the project.

A

Pure Risk

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5
Q

directly affect an individual person and can involve a loss of earnings and assets. It can also involve an increase in expenses.

A

Personal Pure Risk

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6
Q

may be damaged by uncontrollable forces and natural disasters, such as fire, hurricanes, tornados, lightning

A

Property Pure Risk

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7
Q

can involve litigation. This is due to either perceived or actual injustice.

A

Liability Pure Risk

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8
Q

Has a positive or negative effect on the project. Business risk is the event of gain or loss resulting from business activities.

A

Business risk

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9
Q
  • More specific than risk appetite, it refers to the acceptable variation an organization can withstand.
  • Often quantified in financial terms or operational metrics.
  • Guides how much risk is acceptable before impacting the company’s strategic objectives.
A

Risk Tolerance

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10
Q
  • The broad, high-level willingness to pursue or accept risk to achieve objectives.
  • Reflects the overall approach to risk in strategic planning and decision-making.
  • It’s about how much risk the organization will pursue or accept to achieve its goals.
A

Risk Appetite

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11
Q
  • Not willing to accept any risk
A

Risk Averse

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12
Q
  • Identifies the specific point at which an action is required to address the risk.
  • Tied to specific risks with defined triggers or conditions.
  • Provides actionable points for managing risks within the boundaries set by risk tolerance.
A

Risk Threshold

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13
Q

is an indicator that a risk is about to occur or has occurred. Triggers may be discovered during the risk identification process band monitored as the project is executed. Once the risk trigger occurs, the project team needs to implement a risk response.

A

Risk Trigger

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14
Q

There is a set number of possible outcomes, but we don’t know which one will actually occur.
(ex. The number of errors found during testing may be higher or lower than expected)

A

Variability risk

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15
Q

This comes from uncertainties arising from lack of knowledge or understanding.
(ex. New disruptive technologies or market conditions)

A

Ambiguity risk

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16
Q

sessions are widely used in construction projects to gather diverse perspectives from team members and stakeholders. This technique encourages open discussion and helps identify a broad range of potential risks.

A

Brainstorming

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17
Q

SWOT

A

Strengths, Weaknesses, Opportunities, Threats

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18
Q

analysis is effective in construction for identifying internal and external factors that could impact the project. It provides a comprehensive view of potential risks by examining positive and negative aspects.

A

SWOT

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19
Q

based on historical data and past project experiences are commonly used in construction. They provide a systematic way to ensure that no common risks are overlooked, making them a reliable tool for risk identification.

A

Checklist

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20
Q

Leveraging the knowledge and experience of experts is crucial in construction. Experts can provide valuable insights based on their past experiences and specialized knowledge, helping to identify risks that might not be immediately apparent.

A

Expert Judgment

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21
Q

Reviewing project documents, such as plans, contracts, and historical data, is a standard practice in construction. This technique ensures that all documented information is considered in the risk identification process.

A

Document Review

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22
Q

These involve technology-related issues, such as software bugs, hardware failures, or technical challenges in project execution.

A

Technical Risks

23
Q

These are related to the project’s operational aspects, including process inefficiencies, supply chain disruptions, or resource availability.

A

Operational Risks

24
Q

These involve financial uncertainties, such as budget overruns, funding shortfalls, or changes in market conditions.

A

Financial Risks

25
Q

These are associated with high-level objectives and strategies, such as changes in business priorities, market competition, or regulatory changes.

A

Strategic Risks

26
Q

These involve legal and regulatory requirements, including adherence to laws, regulations, and standard.

A

Compliance Risks

27
Q

These are related to environmental factors, such as natural disasters, environmental regulations, or sustainability issues.

A

Environmental Risks

28
Q

These involve potential damage to the organization’s reputation, which can arise from project failures, negative publicity, or stakeholder dissatisfaction.

A

Reputational Risks

29
Q

These are related to personnel issues, such as skill shortages, labor disputes, or team dynamics.

A

Human Resource Risks

30
Q

Risk probability ratings help in assessing the likelihood of a risk occurring.

A

Risk Probability Rating

31
Q

The risk is highly unlikely to occur. Risks in this category are often monitored but may not require immediate action.

A

Very Low (0-10%)

32
Q

The risk is unlikely to occur but is still possible. These risks are noted and monitored, with contingency plans developed if necessary.

A

Low (10-30%)

33
Q

The risk has an even chance of occurring. These risks are actively managed and monitored, with mitigation strategies in place.

A

Medium (30-50%)

34
Q

The risk is likely to occur. These risks require immediate attention and detailed mitigation plans.

A

High (50-70%)

35
Q

The risk is almost certain to occur. These risks are critical and need urgent and comprehensive risk management strategies.

A

Very High (70-100%)

36
Q

Minimal impact on project objectives. The project can continue with negligible disruption.

A

Very Low

37
Q

Minor impact on project objectives. Some adjustments may be needed, but the project remains largely on track.

A

Low

38
Q

Moderate impact on project objectives. Significant adjustments are required; the project may experience delays or increased costs.

A

Medium

39
Q

Major impact on project objectives. The project will face substantial delays, cost overruns, or performance issues.

A

High

40
Q

Critical impact on project objectives. The project may fail to meet its objectives or be terminated

A

Very High

41
Q

A common format is a 5x5 matrix, where one axis represents the probability, and the other represents the impact. Each cell in the matrix corresponds to a risk rating.

A

Risk Matrix

42
Q

Use the risk rating to prioritize risks. Higher ratings indicate higher- priority risks that need more immediate attention

A

Risk Rating Interpretation

43
Q

refers to the actions taken to address identified risks in a project. It is a crucial component of risk management, involving the development and implementation of strategies to mitigate, avoid, transfer, or accept risks.

A

Risk response

44
Q

Eliminate the threat or protect the project from its impact by changing the project plan./
Adjusting the project scope or timeline to avoid a risk

A

Avoidance

45
Q

Reduce the probability or impact of the risk to an acceptable level./
Implementing additional quality checks to reduce the likelihood of defects.

A

Mitigation

46
Q

Shift the impact of the risk to a third party, often through contracts or insurance./
Outsourcing a risky component of the project to a specialized vendor.

A

Transfer

47
Q

Acknowledge the risk and decide to deal with it if it occurs. This can be active (with a contingency plan) or passive (without a specific plan)./
Setting aside a contingency budget to address potential cost overruns.

A

Acceptance

48
Q

Escalate the risk to a higher authority when it is beyond the project manager’s control./ Reporting a significant regulatory risk to senior management for resolution.

A

Escalation

49
Q

Determine the conditions or events that will trigger the implementation of a risk response.
Example: For a risk of supplier delay, the trigger condition might be a missed delivery date.

A

Identify Trigger Conditions and Warning Signs

50
Q

Create specific, actionable plans for each risk response strategy. This includes outlining the steps, resources required, and timelines.
Example: The action plan might include additional quality checks and backup suppliers for a mitigation strategy.

A

Develop Detailed Action Plans

51
Q

Assign responsibility for each risk to a team member who will monitor the risk and implement the response plan if necessary.
Example: A project manager might be assigned to oversee the risk of budget overruns.

A

Assign Risk Owners

52
Q

Allocate budget and resources to address risks if they materialize. This ensures that the project can continue smoothly even if a risk occurs.
Example: Setting aside a contingency fund to cover potential cost overruns.

A

Establish Contingency Reserves

53
Q

Continuously monitor identified risks and the effectiveness of the response strategies. Adjust plans as necessary based on new information or changes in the project environment.
Example: Regularly reviewing the risk register and updating it with new risks or changes in existing risks1.

A

Monitor and Review Risks

Engman LE2 (3 decks)

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