A part of a project deals with the hardware work. As a project manager, you have decided to hire a company to deal with all hardware work on the project. Which type of risk response is this?

The correct answer is C. Transference. Hiring an external company to handle the hardware work is Risk Transference. Transference shifts the negative impact of a risk (and ownership of the response) to a third party, such as through outsourcing, subcontracting, insurance, or warranties. The risk still exists, but…

Risk Strategy and Planning

Question

Options

AExploit
BMitigation
CTransference
DAvoidance

How the community answered

(36 responses)

A
3% (1)
B
11% (4)
C
78% (28)
D
8% (3)

Explanation

Hiring an external company to handle the hardware work is Risk Transference. Transference shifts the negative impact of a risk (and ownership of the response) to a third party, such as through outsourcing, subcontracting, insurance, or warranties. The risk still exists, but another party now bears it. Avoidance (D) would eliminate the risk entirely by not doing the hardware work at all. Mitigation (B) would reduce the probability or impact while keeping the work in-house. Exploit (A) is a positive-risk (opportunity) response used to ensure the opportunity occurs-it does not apply to negative risks like this scenario.

Topics

#Risk response strategies#Risk transference#Outsourcing#Risk management

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