10.2 Explain Proactive and Reactive Responses to risks Flashcards
1
Q
What are the responses to risks ?
A
Accept
Avoid
Transfer
Reduce
2
Q
What are the responses to opportunities ?
A
Enhance
Exploit
Reject
Share
3
Q
Is avoiding a reactive or proactive response and why ?
A
Proactive - because it is planned and implemented in advance
4
Q
Why would a project manager avoid a risk
A
To avoid the impact the risk can have on the project objectives
5
Q
Depending on what , what would a project manager do to avoid a risk and why ?
A
Depending on the risk , the project manager could Change the projects objectives and practices to discount the cause of the risk
6
Q
What could changing a projects objectives and practices to avoid a risk be seen as and why ?
A
An inconvenience due to the nature of a risk where is is uncertain that the risk would actually occur
7
Q
How can a project manager determine whether it is worth avoiding a risk ?
A
Through the use of a risk register , determining the likelihood of a risk occurring and the impact a risk would have on a project
8
Q
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 ?
A
Use it as baseline to decide whether to avoid a risk and therefore make changes to a project initial objective.
9
Q
What does avoiding a risk seeks to do and how ?
A
Eliminate the risk by changing the cause of the risk
10
Q
An example of avoiding a risk ?
A
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
11
Q
What does reducing a risk tackle ?
A
The source of the risk
12
Q
Is reducing a risk a proactive or reactive response and why ?
A
Proactive response as it focuses on the cause of risk
13
Q
What is reducing a risk seen as ?
A
A preventive and good effective option for risk control
14
Q
Actions to reduce a risk reduces what and in terms of what ?
A
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
15
Q
When reducing a risk what does a project manager implement and what is it usually associated with ?
A
A project would implement a preventative action usually associated with cost and time management
16
Q
What could the action to reduce a threat potentially be to a project ?
A
The action to reduce a threat could potentially be a cost to the project
17
Q
When reducing a risk What would the project manager need to ensure when implementing a preventive action is ?
A
Worthwhile and cost less than the expected risk value
18
Q
Why would you need to monitor the risk and action when reducing a risk ?
A
The risk and action will need to be monitored to ensure that that action taken does in fact reduce the risk as expected
19
Q
Is transferring a risk a proactive or reactive response and what happens ?
A
It is a proactive response where the risk os transferred from one party to another
20
Q
Why is the risk / threat transferred , to who and why ?
A
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
21
Q
What does transferring a risk not prevent and what would the project manager need to do and why ?
A
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
22
Q
What is another way of transferring a risk ?
A
Through insurance
23
Q
What are the various reasons a project manager may choose to transfer a risk ?
A
- lacking expertise or resource
- mitigating financial risk
- complying with legal regulations
- focusing on core project activities
24
Q
What is risk transfer and what does it ensure
A
Risk transfer is a strategic decision , made by the project manager ensuring that the risks are managed by those best equipped to do so
25
What does transferring a risk require and why ?
Transferring a risk requires a balanced approach as it likely that elements of residual risk will remain on both sides
26
Is accepting a risk a proactive or reactive response and what happens to the risk and how ?
A reactive response where the risk is accepted with a contingency plan to be implemented in case the risk materialises.
27
When is the option of accepting a risk chosen ?
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
28
Where does the risk remain when accepted and why ?
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.
29
What happens when a decision to accept a risk is choosen and in relation to what?
A contingency plan can be established in relation to the schedule and cost
30
What should happen to the status of an accepted risk and what should happen with the impact of an accepted risk ?
The status of the risk should be actively monitored and any impact of that risk on stakeholders should be reported accordingly
31
When is the response to accept a risk chosen by the project sponsor ?
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
32
Accepting a risk is a _________ response where the risk is accepted with a __________ to be implemented should the risk ____________
Reactive
Contingency plan
Materialise
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 ________
Reduce
Avoid
Impact
Likelihood
Low
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
Risk register
Monitored
Impact
Probability
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
Contingency plan
Cost and schedule
Monitored
Regular Basis
Stakeholders
Reported
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 ____
Risk tolerance
Reduce
High
37
Transferring a risk is a _________ response where the risk is ______ from one ______ to ______
Proactive
Transferred
Party
Another
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
Outside
Capacity
Capability
Host organisation
An external Entity
Third party
Capable
Managing
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
Prevent
Occurring
Managing
Impact
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
Implement
Action
Deal
Bare
Cost
41
Another way of transferring a risk is through taking out ______
Insurance
42
A project manager may choose to transfer a risk for various reasons :
Lacking _____ or ______
________ Financial risk
_______ with ______________
Or focusing on ___________
Resources or expertise
Mitigating
Complying with legal regulations
Core project activity
43
Transferring a risk is a _______ made by the _________ and ensures that the risks are _______ by those best _______ to do so
Strategic decision
Project manager
Managed
Equipped
44
Transferring a risk requires a _____________ as it is likely that ______ of _________ risk will remain on _______
Balanced approach
Elements
Residual
Both sides
45
Reducing a risk tackles ……?
The source of the risk
46
Reducing a risk is a ________ response and focuses on the ______ of the risk
Proactive
Cause
47
Reducing a risk is seen as a _______ and good _______ option for _______
Preventive and good effective option for risk control
48
When reducing a risk actions either reduce the _________of the threat in terms of the ___________ of ______________ or its ___________ on a project is_______ and ________
Impact of the threat in terms of the probability of occurring or it’s impact are considered and implemented
49
When reducing a risk the project manager would implement an __________ action usually associated with ________
Preventive
Cost and time
50
When reducing a risk the project manager needs to ensure that the cost of _______the preventive action is _______ and __________ than the expected ________
Implementing
Worthwhile and cost lest than the expected risk value
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
Cost to the project
Action
Monitored
Action taken
Reduce
52
Avoiding a risk is a ________ response as it is ________ and _________ in advanced
Proactive
Planned
Implemented
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
Impact
Objectives
Risk
Objectives or practices
Discount
Cause
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 _________
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
55
Avoiding a risk seeks to ___________ a risk by changing the _______ of the _______.
Eliminate a risk
Cause of the thread
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.
Resources may lead to project delays
Allocating additional resources
Changing the project schedule
Resources are available when needed
57
Is exploiting a risk a proactive or reactive response ?
A proactive response
58
What does exploiting a risk do and how ?
Maximises both the probability and impact of the opportunity by implanting a action to exploit the risk and gain maximum benefit/ advantage
59
What does exploiting a risk allow you to do ?
Gain maximum benefit/advantages
60
How does exploiting a risk allow you to gain maximum benefit / advantage ?
By implementing an action to exploit the risk
61
What needs to be clearly understood when exploiting a risk and who does it need to be agreed by
The implications need to be clearly understood and agreed to by all stakeholders
62
Why does the implications of exploiting a risk need to be clearly understood and agreed to by all stakeholders ?
Because exploiting a risk often requires a change during the project
63
What kind of change does exploiting a risk often require ? And may benefit what ?
A change in scope , acceptance of more risks , or a change to timescales and budget and may only benefit so stakeholders
64
Exploiting a risk is taking advantage of what ? And to do what?
Favourable conditions to Maximise project benefits
65
Examples of exploiting a risk could be ? And results in what ?
Strategically allocating resources or accelerating timelines.
Resulting in cost savings or efficiency gains
66
Is enhancing an opportunity a proactive or reactive response and why ?
Proactive , Enhancing a risk is strategic / tactical to enhance the opportunity by increasing it likelihood and or impact.
67
What does enhancing a risk do to an opportunity ?
Increases the likelihood and or impact
68
What is an example of enhancing a risk and what would the project do ?
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
69
What is important to consider when enhancing a risk and why ?
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
70
What does enhancing an opportunity further increase ?
Enhancing an opportunity further increases the potential benefits and value derived from a favourable risk
71
What is the difference between exploiting and enhancing a risk ?
Exploiting a risk maximises the probability and or impact of a risk
Enhancing a risk increases the likelihood and or impact of a risk
72
Is sharing a risk proactive or reactive ?
Sharing a risk is proactive
73
What happens when a risk is shared ? And why ?
Collaboration takes place to increase the chances of the opportunity being realised through sharing some of the responsibility with another party
74
How does sharing a risk increase the chances of the opportunity being realised ?
Through sharing some of the responsibility with another party.
75
Why would the risk be shared with another party ?
They may be better placed to help realise the benefits associated with the risk
76
What may the other party be better placed to realise when sharing a risk ?
The benefits associated with that risk
77
What is likely to be required from both parties when sharing a risk ?
A cost investment from both sides is likely to be required when sharing a risk
78
Example of sharing a risk :
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
79
What does sharing a risk promote and leverage ? And what are the result of this ?
Sharing a risk promotes collaboration and leverages expertise enhancing the likelihood of successfully releasing the opportunity
80
Is rejecting a risk proactive or reactive and why does it happen ?
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
81
Why may a risk be rejected ?
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
82
What is deemed of little value when rejecting a risk?
The proactive pursuit of the opportunity
83
What is deemed as not significant enough to justify an action when rejecting a risk ?
The benefits associated with it
84
A risk may rejected because the cost or time needed to implement an action may ?
Outweigh the benefits associated with releasing the opportunity
85
What is the reason for a project team rejecting a rosk ?
A project team would naturally take advantage of the opportunity should it arise but not take proactive steps to pursue it further
86
Exploiting a risk is a _________ response to _________ both the _________ and ______ of the opportunity by ________ an ________ to ________ the risk and gain maximum ______ / ________
Proactive
Maximise
Probability
Likelihood
Implementing
Action
Maximise
Benefit / advantage
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 ___________
Implications
Understood
Stakeholders
Change
Project
Scope
Risk
Budget and timescales
Some stakeholders
88
Exploiting a risk is taken _________ of ___________ to maximise project ______ e,g strategically allocating ___________ or accelerating _______ resulting in _________ savings or _______ gains
Advantage
Favourable conditions
Benefits
Resources
Timelines
Cost savings or gains
89
Enhancing a risk is a _______ response because it is _________\ to enhance the opportunity by ________ its ________ and or _______
Proactive response
Strategic / tactical
Increasing
Likelihood and or impact
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 ______
Deliver
Early
Reward payment
Tactical approach
Schedule
Fast tracking
Addicaonal resources to tasks
Duration
91
When enabling a a risk it is important to consider the _____ these actions as it should not be ______ than the ____________ on offer
Cost
More
Reward payment on offer
92
Enhancing an opportunity further increase the potential __________ and _______ derived from a ___________
Benefits
Value
Favourable situation
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
Proactive
Collaboration
Increase
Realased
Responsibility
Party
Realise
Benefits
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.
Cost investment
Both side
Required
Bonus
Share
Supplier
95
Sharing a risk promotes _________ and _______ expertise enhancing the ________ likelihood of ________ realising the opportunity
Collaboration
Leverages
Successfully
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
Proactive
Proactive pursuit
Rejected
Little value
Significant
97
A risk may be rejected because the _____ or _______ needed to implement an action may ________ the benefits associated with _____ the opportunity
Cost or time
Our weight
Realising the opportunity
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
Take advantage
Natural
Proactive steps
