You are the project manager for a construction project. The project involves casting of a column in
a very narrow space. Because of lack of space, casting it is highly dangerous. High technical skill
will be required for casting that column. You decide to hire a local expert team for casting that
column. Which of the following types of risk response are you following?
A.
Avoidance
you have transferred your risk to a third party, this is the transference risk response that you
have adopted. Transference is a strategy to mitigate negative risks or threats. In this strategy,
consequences and the ownership of a risk is transferred to a third party. This strategy does not
eliminate the risk but transfers responsibility of managing the risk to another party. Insurance is an
B.
Acceptance
C.
Mitigation
D.
Transference
A.
Avoidance
you have transferred your risk to a third party, this is the transference risk response that you
have adopted. Transference is a strategy to mitigate negative risks or threats. In this strategy,
consequences and the ownership of a risk is transferred to a third party. This strategy does not
eliminate the risk but transfers responsibility of managing the risk to another party. Insurance is an
Explanation:
According to the question, you are hiring a local expert team for casting the column.
associated with threats that seeks to reduce the probability of occurrence or impact of a risk to
below an acceptable threshold. Risk mitigation involves taking early action to reduce the
probability and impact of a risk occurring on the project. Adopting less complex processes,
conducting more tests, or choosing a more stable supplier are examples of mitigation actions.
process. Acceptance response delineates that the project plan will not be changed to deal with the
risk. Management may develop a contingency plan if the risk does occur. Acceptance response to
a risk event is a strategy that can be used for risks that pose either threats or opportunities.
Acceptance response can be of two types: Passive acceptance: It is a strategy in which no plans
are made to try or avoid or mitigate the risk. Active acceptance: Such responses include
developing contingency reserves to deal with risks, in case they occur. Acceptance is the only
response for both threats and opportunities.