CBAP · Question #426
A popular department store chain wants to make computer upgrades as well as conduct a major remodeling effort to increase revenue to all their 100 stores over the next 2 years. The remodeling will…
The correct answer is A. Seeking. The CEO's decision to proceed against the board's cautionary advice reflects a risk-seeking attitude, where a stakeholder actively accepts elevated risk in pursuit of an opportunity.
Question
A popular department store chain wants to make computer upgrades as well as conduct a major remodeling effort to increase revenue to all their 100 stores over the next 2 years. The remodeling will occur in two phases. The two phases are required at each store and can be completed in any order, but each phase must be fully completed before the next phase can begin. Phase 1 will take approximately 32 weeks and will not require a store to be temporarily closed. Phase 2 will take approximately 20 weeks and will require a store to be temporarily closed. In order to keep inventory level and total revenue for the department store chain at an operational level, 75% of the stores must remain open to the public at all times. Against the board of director's advice, the Chief Executive Officer (CEO) made a decision to start and complete the top 25 revenue-producing stores in the first year to get those stores remodeled and fully operational. A business analyst (BA) has been brought in to help with planning the project and gathering requirements. Based on the CEO's executive decision, which risk tolerance attitude is the CEO exhibiting?
Options
- ASeeking
- BAvoidance
- CMitigation
- DNeutrality
How the community answered
(40 responses)- A75% (30)
- B3% (1)
- C18% (7)
- D5% (2)
Why each option
The CEO's decision to proceed against the board's cautionary advice reflects a risk-seeking attitude, where a stakeholder actively accepts elevated risk in pursuit of an opportunity.
Risk seeking describes a stakeholder disposition in which an individual willingly accepts a higher probability or magnitude of risk to pursue a potential reward. The CEO overriding the board's explicit objections demonstrates this active pursuit of risk rather than avoidance or neutrality, which is the defining trait of a risk seeker in business analysis stakeholder analysis frameworks.
Avoidance is a risk response strategy in which plans are changed to eliminate a threat entirely - the opposite of the CEO's decision to proceed despite identified concerns.
Mitigation is a risk response strategy aimed at reducing the likelihood or impact of a risk, and describes an action taken on a risk, not a stakeholder's underlying attitude toward risk.
Neutrality characterizes indifference to risk outcomes, whereas the CEO is making an active, deliberate choice to accept known risk, which is inconsistent with a neutral stance.
Concept tested: Stakeholder risk attitude identification - risk seeking behavior
Source: https://www.iiba.org/career-resources/a-business-analysis-body-of-knowledge/
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