Week 2 Reading-CHPT 3 Flashcards
(158 cards)
1
Q
What is the inherent risk associated with organizational inertia?
A
Products and services become stale over time, leading to loss of competitiveness due to societal and technological changes.
2
Q
What are the key areas covered by an effective risk management framework?
A
- Risk identification
- Risk analysis
- Risk measurement
- Risk response
- Risk reporting and monitoring
- Governance
3
Q
Who is responsible for managing risks in portfolios, programs, and projects?
A
Portfolio, program, and project managers.
4
Q
What does organizational project management align with?
A
Organizational strategy and integrated with organizational enablers to achieve strategic objectives.
5
Q
What are the components that influence the application of Enterprise Risk Management (ERM)?
A
- Industry shifts
- Regulations
- Disruptive technology
- Competition
- Business model changes
- Organizational context
6
Q
Fill in the blank: Accountability is _______ by nature and derived from a position held in the organization.
A
[individual]
7
Q
What is the objective of risk management at the enterprise level?
A
To manage risks within acceptable thresholds while embracing opportunities and minimizing threats.
8
Q
At the portfolio level, what does portfolio risk management address?
A
- Strategic risks
- Execution risks
- Structural risks
9
Q
True or False: Responsibility can be shared among team members in a project.
A
False
10
Q
What is the purpose of portfolio management?
A
To connect strategic planning with business execution by selecting the right portfolio components.
11
Q
What should program managers ensure when managing risks?
A
That program risks are managed through coordination with component managers.
12
Q
What are the responsibilities of project managers regarding risk management?
A
- Evaluating risks
- Reporting risks
- Managing individual and overall project risks
- Exploring and responding to uncertainty
13
Q
Fill in the blank: Authority gives an individual the ability to make _______ within defined bounds.
A
[decisions]
14
Q
What can impact the extent of risk management practices in an organization?
A
- Legal factors
- Economic factors
- Behavioral factors
- Human health
- Decision effects
15
Q
What is the significance of aligning portfolio management with strategy?
A
It balances resource use to maximize value delivered in executing programs, projects, and operational activities.
16
Q
What should the program risk management strategy include?
A
- Defining risk thresholds
- Performing initial program risk assessment
- Developing high-level program risk response strategy
17
Q
True or False: Project team members have no responsibility for managing risks.
A
False
18
Q
What are some strategies for responding to uncertainty in project management?
A
- Gathering information
- Preparing for multiple outcomes
- Set-based design
19
Q
What does effective risk management across an organization help with?
A
The accuracy of planned allocation of risk contingency resources and increasing project delivery reliability.
20
Q
What is the role of the governance board in risk management?
A
To oversee ERM and ensure a risk management strategy is in place.
21
Q
Fill in the blank: The management of risk across portfolios, programs, and projects requires _______ throughout the enterprise.
A
[collaboration]
22
Q
What is the dynamic nature of the risk environment at the portfolio level?
A
It is complex, interdependent, and nonlinear.
23
Q
What does the project manager do when encountering risks?
A
Escalate certain risks to higher management or receive guidance from leadership entities.
24
Q
What is a strategy for responding to uncertainty in project management?
A
Gathering information
Reduces uncertainty by finding relevant and reliable information.
25
What should a project team do when faced with multiple potential outcomes?
Prepare for multiple outcomes by categorizing, assessing causes, and estimating likelihoods
## Footnote
Focus on the most likely potential outcomes.
26
What does set-based design refer to in project management?
Investigating multiple designs or alternatives early and validating progressively
## Footnote
Helps reduce uncertainty and eliminate poorer choices.
27
What is the purpose of building resilience in project teams?
To learn, adapt, and respond quickly to changes
## Footnote
Example: adjusting to a new deadline for a minimum viable product (MVP).
28
What is a minimum viable product (MVP)?
The fewest number of features or requirements that deliver value to customers
## Footnote
Defines the scope of the first release of a solution.
29
What is the first step in a systematic approach for managing risks?
Continuously evaluate events or circumstances that may occur
## Footnote
Focus on their variability and ambiguity.
30
What should be assessed regarding risks in project management?
Probability of occurrence and impact if it occurs
## Footnote
Essential for determining appropriate responses.
31
What does continuously monitoring risks involve?
Keeping risk exposure within an acceptable range
## Footnote
Involves managing overall portfolio, program, and project risks.
32
What are the specific processes for risk management?
* Plan Risk Management
* Identify Risks
* Perform Qualitative Risk Analysis
* Perform Quantitative Risk Analysis
* Plan Risk Responses
* Implement Risk Responses
* Monitor Risks
## Footnote
Detailed processes for effective risk management.
33
What factors are considered when evaluating risk?
* Probability
* Impact
* Compliance
## Footnote
These help determine appropriate steps for risk response.
34
What does risk acceptance entail?
Accepting the risk either passively or actively
## Footnote
Active acceptance involves creating a contingency reserve.
35
What is the purpose of risk mitigation?
To reduce the probability of occurrence and/or impact of a threat
## Footnote
Early mitigation is more cost-effective.
36
What does risk transfer involve?
Shifting the ownership of the risk to a third party
## Footnote
The third party manages the risk and bears the impact.
37
What is the goal of enhancing positive risks?
To increase the probability of occurrence or impact of the opportunity
## Footnote
Best done early in the project.
38
What does the exploit option in positive risk response mean?
Acting to ensure the opportunity occurs to reap maximum benefits
## Footnote
Ensures the portfolio, program, or project gains advantages.
39
What is the primary purpose of organizations creating adaptive frameworks?
To stay in sync with competitive environments and tackle complexities in achieving goals and making decisions.
40
What are the inherent complexities in portfolios, programs, and projects?
Human behavior, system behavior, uncertainty, and ambiguity.
41
What does the risk management life cycle provide?
A structured approach for undertaking a comprehensive view of risk throughout the enterprise, portfolio, program, and project levels.
42
List the phases included in the risk management life cycle.
* Plan Risk Management
* Identify Risks
* Perform Qualitative Risk Analysis
* Perform Quantitative Risk Analysis
* Plan Risk Responses
* Implement Risk Responses
* Monitor Risks
43
What is the role of the risk management life cycle in strategic decision-making?
It ensures a repeatable sequence of processes fostering strategic decision-making.
44
What happens to the risk management process once a portfolio, program, or project is closed?
The risk management process terminates, and lessons learned are documented.
45
What is the strategic objective of the Compact Wind Turbine Project?
To embrace sustainability, contribute to carbon neutrality, and promote regional development.
46
What sectors will the wind turbines supply sustainable energy to?
* Communities
* Businesses
* Schools
* Health clinics
* Individual households
* Farms
47
What are some risks faced by the Compact Wind Turbine Project?
* Design inconsistencies
* Technical difficulties
* Cost escalations
* Regulatory challenges
* Environmental uncertainties
48
How does risk management differ in adaptive, predictive, and hybrid project management?
Each approach has unique strengths and weaknesses based on project characteristics, team dynamics, stakeholder preferences, and organizational strategy.
49
What is a characteristic of adaptive project management approaches?
Risk management is integrated throughout the entire project life cycle, not just during planning.
50
Define 'initial risk identification' in predictive project management approaches.
The team attempts to identify high-level risks at the beginning of the project and continues identifying risks as the project progresses.
51
What does a hybrid project management approach combine?
Predictive and adaptive approaches for flexibility and structure in risk management.
52
What is the metaphor used to describe the relationship among an organization’s strategy, portfolios, programs, and projects?
Matryoshka, or nesting dolls.
53
What are the three primary reasons for integrating project risk management and organizational risk management?
* Evolution of risks
* Alignment of objectives
* Consistent risk-focused culture
54
What strategy is recommended to facilitate the integration of project and organizational risk management?
Open communication among project managers and organizational risk managers.
55
Fill in the blank: The risk management life cycle creation involves establishing _______ and processes iteratively.
[risk criteria]
56
True or False: Predictive project management approaches typically allow for frequent feedback and adjustments during the project.
False.
57
What is a key characteristic of continuous risk identification in adaptive project management?
The team can quickly identify and react to risks as they emerge.
58
What is the focus of organizational risk management compared to project risk management?
To manage risks that affect the entire organization, beyond the project-centric view.
59
What is meant by 'structured risk management' in predictive approaches?
Risk management is usually structured with dedicated roles and standardized processes.
60
What does 'feedback and learning' in hybrid project management entail?
Gathering feedback at the end of each iteration to adjust risk strategies and improve over time.
61
Identify one technique used for early de-risking in adaptive project management.
'Spikes' to expel identified uncertainties.
62
What is the purpose of a holistic view of risk management within an organization?
To protect projects and the entire organization from unforeseen challenges.
## Footnote
A holistic view helps establish the right structure within the organization’s governance.
63
What does the risk management life cycle involve?
Establishing risk criteria and processes iteratively, ensuring alignment with the organization’s strategies and objectives while allocating resources effectively.
64
True or False: The structured process in risk management implies rigidity.
False.
## Footnote
The structured process provides a systematic approach while allowing flexibility.
65
What is risk escalation?
The process of elevating the level of risk management from a lower level, such as a project or program, to a higher level, such as a portfolio or enterprise.
66
At what level are risks primarily managed to achieve specific project objectives?
Project level.
67
What happens to risks when they escalate from project to program level?
They become risks that can impact the success of multiple related projects within a program.
68
What type of risks are managed at the portfolio level?
Strategic risks that can have implications for achieving organizational objectives.
69
Effective risk escalation involves which key components?
* Clear and timely communication
* Collaboration
* Robust decision-making processes
70
What is the significance of the Compact Wind Turbine Project at the project level?
It faces immediate risks such as design inconsistencies, technical difficulties, and potential supply chain disruptions.
71
What is the focus of risk management at Level 1 maturity?
Organizations have awareness of project management processes but lack standardized practices.
72
At maturity Level 2, how are project management processes treated?
They are implemented but not uniformly accepted as organizational norms.
73
What characterizes maturity Level 3 in risk management?
Every project management process is standardized across the organization with comprehensive documentation.
74
What is a key feature of maturity Level 4 in risk management?
Projects are overseen with insights from historical performance and future projections.
75
At maturity Level 5, what is the focus regarding risk management?
Continual improvement and integration of risk management into project management activities.
76
What does the Plan Risk Management process aim to develop?
The overall risk management strategy and integration of risk management with other activities.
77
Fill in the blank: The risk appetite is determined by the _______ of the relevant stakeholders.
risk appetites
78
What elements are tailored and scaled in the risk management plan?
* Available resources
* Escalation paths
* Approaches and processes used
* Tools and techniques used
* Supporting infrastructure
* Review and update frequency
* Reporting requirements
79
What is a key success factor for a valid risk management plan?
Stakeholder acceptance.
80
Why is it important to identify and correct bias in the risk management process?
To ensure a fair and balanced approach.
81
What should the risk management plan align with?
Both internal and external constraints and priorities.
82
What balance should a successful risk management plan maintain?
Balance between the cost and effort of implementing risk response strategies and the expected benefits.
83
What does completeness with respect to risk management process needs entail?
The plan should fully address the requirements from risk identification and assessment to response planning, implementation, and monitoring.
84
What is the role of a neutral facilitator in workshops?
To guide discussion, ensure participation from all stakeholders, and assist in challenging biased viewpoints
85
What should a risk management plan align with?
Internal and external constraints and priorities
86
What does a successful risk management plan maintain?
A balance between cost, effort, and benefit
87
What must the risk management plan address?
Requirements from risk identification, assessment, response planning, implementation, and monitoring
88
Who should accept stakeholder involvement in the Compact Wind Turbine Project?
Municipal officials, community members, local businesses, and other impacted entities
89
What bias needs to be corrected in the Compact Wind Turbine Project?
Overemphasizing financial risks while underemphasizing environmental risks
90
What should be considered in the Plan Risk Management process?
Budget constraints and the priority to reduce carbon emissions
91
What factors should be included in the risk management plan for the Compact Wind Turbine Project?
* Location risks
* Species endangerment
* Long-term maintenance
* Potential health impacts
* Community engagement
92
What is the first step in the risk management process?
Identifying risks
93
What is the purpose of risk identification?
To identify key risks to the extent practicable
94
What are some techniques for risk identification?
* Premortem brainstorming
* Documentation review
* Expert interviews
* Assumptions analysis
* SWOT analysis
* Checklists
* Simulations
* Scenario analysis
95
What is a risk owner responsible for?
Monitoring the risk and selecting and implementing an appropriate risk response strategy
96
What is early risk identification?
Proactively identifying potential risks at the beginning of a project
97
What does iterative risk identification entail?
Ongoing adaptation to the project nature and continual identification of risks throughout the project life cycle
98
What does comprehensive risk identification involve?
Using multiple techniques and relevant stakeholders to thoroughly identify key risks
99
What does explicit identification of opportunities and innovation mean?
Actively recognizing and capturing positive events or circumstances that can benefit a project
100
What is the importance of connecting risks to objectives?
Helps prioritize risks, inform decision-making, and develop targeted risk responses
101
What is required for effective risk identification?
A complete risk statement
102
What is the significance of frequent and effective communication in risk management?
Enhances risk awareness and enables informed decision-making
103
True or False: Biases in projects can affect risk management.
True
104
What is the process of Perform Qualitative Risk Analysis?
Evaluating the importance of each risk to categorize and prioritize them for further attention
105
What techniques are used in qualitative risk analysis?
* Risk probability and impact assessment
* Risk ranking or scoring
* Risk matrix analysis
* Expert judgment
106
What is the purpose of performing quantitative risk analysis?
To provide a numerical estimate of the overall effect of risk on the objectives
107
What are key success factors for Perform Quantitative Risk Analysis?
* Effective prior risk identification
* Appropriate model
* Competence with technical analysis tools
* Commitment to collecting credible risk data
* Unbiased data
* Understanding interrelationships among risks
108
What does the Plan Risk Responses process determine?
Appropriate response actions for the priority of individual risks and overall risks
109
Fill in the blank: A successful risk management plan must achieve a balance between cost, effort, and _______.
[benefit]
110
What is the purpose of the Plan Risk Responses process?
To determine the set of actions that provides the highest chance of success while complying with applicable constraints.
111
What factors are considered when determining appropriate risk responses?
Stakeholders’ risk attitudes, conventions in the risk management plan, constraints, and assumptions.
112
What are the five responses to threats?
* Escalate
* Avoid
* Transfer
* Mitigate
* Accept
113
What does the escalation response entail?
Managing a threat at the enterprise, portfolio, or program level when it exceeds a manager's authority.
114
Define risk avoidance.
Eliminating a threat or protecting an activity from any impact of risk realization.
115
What is risk transference?
Shifting the responsibility of a threat to a third party to manage the risk and bear the impact.
116
What does risk mitigation aim to achieve?
To reduce the probability of a threat’s occurrence and/or impact.
117
What is active risk acceptance?
Acknowledging a threat and establishing a contingency reserve to handle it if it occurs.
118
What is passive risk acceptance?
Acknowledging a threat without taking proactive measures, only reviewing it periodically.
119
How can threats be escalated in the Compact Wind Turbine Project?
By identifying threats that exceed project scope or authority and involving higher organizational levels.
120
What strategy is used to avoid regulatory challenges in the Compact Wind Turbine Project?
Changing aspects of the project management plan to eliminate the threat.
121
What does risk sharing involve?
Allocating ownership of an opportunity to a third party to share benefits if the opportunity occurs.
122
What is the exploit strategy for opportunities?
Capturing the benefit of a high-priority opportunity by ensuring it definitely happens.
123
Define the enhance strategy for opportunities.
Increasing an opportunity’s probability and/or impact through targeted actions.
124
What are secondary risks?
Additional risks generated by the implementation of risk responses.
125
What is the role of specifying timing in risk responses?
Determining when risk responses should be implemented to use resources efficiently.
126
What should be provided for implementing risk responses?
Resources, budget, and a schedule for responses.
127
What is a key success factor in the Plan Risk Responses process?
Clearly defining roles and responsibilities for implementing risk responses.
128
Fill in the blank: The Plan Risk Responses process continues until an _____ set of responses has been developed.
optimal
129
True or False: Risk acceptance can only be passive.
False
130
What is an example of a mitigation action in the Compact Wind Turbine Project?
Implementing quality control checks to address design inconsistencies.
131
What does the acceptance strategy acknowledge?
The existence of a threat without taking proactive measures.
132
What is an example of an opportunity that could be escalated in the Compact Wind Turbine Project?
Expanding the project to power public transportation systems.
133
What is the importance of documenting risk responses?
To communicate strategies and actions to key stakeholders and integrate them into management plans.
134
What is the importance of addressing risks in a project?
Ensures timely responses and efficient resource use.
135
How should a project manager specify the timing of risk responses?
To ensure efficient use of resources.
136
What resources should be provided for risk responses?
* Budget
* Schedule
* Allocation of time, money, labor, and materials
137
What is the purpose of addressing the interaction of risks?
To consider how different risks and responses may interact.
138
What are secondary and residual risks?
* Secondary risks: arise from responses to primary risks
* Residual risks: remain after responses are implemented
139
What is crucial for effective risk responses?
All relevant stakeholders must agree on the responses.
140
True or False: All risks are negative.
False
141
What can some risks present when managed correctly?
Opportunities that could benefit the project.
142
What are key considerations in planning risk responses?
* Clearly defined roles and responsibilities
* Resource allocation
* Timing of responses
143
What is the role of the municipality in the Compact Wind Turbine Project?
Responsible for regulatory compliance.
144
What should the municipality allocate to manage risks?
* Contingency budget
* Extra time for regulatory challenges
145
What should be included in management plans after planning risk responses?
Approved unconditional response actions.
146
What does the risk owner monitor?
The effectiveness of response actions and any secondary risks.
147
What is essential for stakeholder commitment?
All stakeholders must be on board with planned risk responses.
148
What should be regularly communicated among project stakeholders?
Risk management updates.
149
What should be calculated and incorporated into project planning?
Estimated costs of risk responses.
150
What reserves should be set aside for risks?
* Contingency reserves
* Management reserves
151
What is the primary objective of the Monitor Risks process?
To track identified risks and maintain the viability of response plans.
152
What should be performed to determine strengths and weaknesses in handling risks?
Periodic risk audits.
153
What should the integrated analysis at the end of a project focus on?
Long-term process improvements.
154
What is a key success factor for monitoring risks?
Integrated risk monitoring.
155
What does continuous monitoring of risk trigger conditions help with?
Preempt potential issues.
156
How can ongoing risk awareness be maintained among stakeholders?
Regular risk management briefings.
157
What should the municipality do when a risk is identified in the Compact Wind Turbine Project?
Ensure a consistent approach toward monitoring the risk.
158
Fill in the blank: The _______ process enables the management team to reevaluate the status of previously identified risks.
Monitor Risks
