A politically sensitive project is being proposed. The sponsor decides to outsource the work despite having a highly capable team. Which of the following BEST describes the risk mitigation strategy…

The correct answer is C. Transference. Risk transference shifts the responsibility and consequences of a risk to a third party-in this case, an outside vendor. By outsourcing the politically sensitive work, the sponsor moves the political and execution risk away from the internal organization and onto the contracted…

Project management concepts

Question

A politically sensitive project is being proposed. The sponsor decides to outsource the work despite having a highly capable team. Which of the following BEST describes the risk mitigation strategy being used?

Options

AAcceptance
BAvoidance
CTransference
DExploitation

How the community answered

(47 responses)

B
4% (2)
C
94% (44)
D
2% (1)

Explanation

Risk transference shifts the responsibility and consequences of a risk to a third party-in this case, an outside vendor. By outsourcing the politically sensitive work, the sponsor moves the political and execution risk away from the internal organization and onto the contracted party. Acceptance (A) means acknowledging the risk and doing nothing to address it. Avoidance (B) would involve changing or canceling the project to eliminate the risk entirely. Exploitation (D) is a positive risk (opportunity) strategy, not applicable here. Outsourcing is the textbook example of transference.

Topics

#risk transference#outsourcing#risk response strategies#risk management

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