While preparing for a project review meeting with leadership, the project team analyzes and checks its scope activities and discovers missing requirements. The project risk manager decides to hire a…

The correct answer is B. Transfer. Hiring a subcontractor transfers both the work responsibility and the associated risk to a third party. Risk transfer means shifting the financial and operational consequences of a risk to another entity - in this case, the subcontractor assumes the responsibility for…

Risk Strategy and Planning

Question

While preparing for a project review meeting with leadership, the project team analyzes and checks its scope activities and discovers missing requirements. The project risk manager decides to hire a subcontractor to fulfil these newly discovered requirements. What risk strategy did the project risk manager use?

Options

AAvoid
BTransfer
CAccept
DMitigate

How the community answered

(40 responses)

A
3% (1)
B
85% (34)
C
5% (2)
D
8% (3)

Explanation

Hiring a subcontractor transfers both the work responsibility and the associated risk to a third party. Risk transfer means shifting the financial and operational consequences of a risk to another entity - in this case, the subcontractor assumes the responsibility for fulfilling the newly discovered requirements. This is distinct from mitigation (D), which reduces the probability or impact of a risk but keeps it within the project team. Avoidance (A) would mean eliminating the requirement or changing the project plan to bypass the risk. Acceptance (C) means acknowledging the risk without taking action. Subcontracting is a classic risk transfer mechanism.

Topics

#Risk Management#Risk Response Strategies#Transfer Risk#Subcontracting

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