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Risk Response Planning

5 minutes 5 Questions

Risk Response Planning is a proactive process where strategies and actions are formulated to deal with individual risks. The purpose is to minimize the negative impacts of risks on the project. In Agile Risk Management, the team devises response strategies for the prioritised risks, keeping in mind the Agile principle of flexibility in responding to changes. Some common risk response strategies include acceptance, avoidance, transference, and mitigation.

Guide to Risk Response Planning in Agile Risk Management

Risk Response Planning is a critical component of the Agile Risk Management process. Corresponding to your slug /concept/pmi-acp/agile-risk-management/risk-response-planning/, this guide will illustrate why it's crucial, what it is, how it operates, and how to successfully respond to questions on the topic in an exam scenario.


Importance: Risk Response Planning is paramount in any Agile project as it aids in the identification, assessment and strategizing of potential project risks. It ensures proactive behavior, compared to reacting when issues have already occurred. This can ultimately save time, effort and resources.


Definition: Risk Response Planning is the process by which teams analyze and plan for identified risks. It involves strategizing how to prevent, minimize or address potential risks and uncertainties that came up during the risk identification and evaluation process.


Functionality: Risk Response Planning operates by formally accepting and documenting strategies. These strategies can be avoidance, mitigation, acceptance or transference of the risk. The Risk Response Plan details how risks will be managed and monitored, who will manage them, and how to communicate about them.


Exam Tips: While answering questions on Risk Response Planning, make sure to understand the fundamental risk response strategies - avoidance, mitigation, acceptance and transference. Be clear on the responsibilities of a risk owner and understand the significance of a risk register as a documentation tool. Lastly, remember that the most effective risk responses are proactive rather than reactive.

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PMI-ACP - Agile Risk Management Example Questions

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Question 1

You are managing a project which involves launching a rocket. There is a potential risk of failure during the launch due to an issue with the engine. The team decides to build an ejection system to ensure the astronaut’s safety. What type of risk response does this represent?

Correct Answer: Mitigation

The correct answer is 'Mitigation'. Mitigating a risk involves taking steps to reduce the impact or likelihood of the risk. In this case, building an ejection system is a way to lessen the impact of the potential risk (rocket failure due to an engine issue). Acceptance implies that no action is taken to reduce the risk. Instead, the team is ready to accept the consequences if the risk occurs. This is clearly not the case in this scenario. Avoidance indicates a complete modification of the plan to entirely avoid the risk, which also doesn't apply to this example since the original plan (launching a rocket) is still proceeding. Transfer means passing the risk to a third party, often through insurance or outsourcing, which is also not applicable in this case.

Question 2

You are responsible for a nuclear power plant project. The regulatory board has made a change in the compliance requirements. This brings forth a great risk that your project may not meet the new requirements. You decide to hire a compliance consultant who specializes in the recent regulation changes. What kind of risk response is exercised in this scenario?

Correct Answer: Mitigate

In the given scenario, the correct risk response is 'Mitigate'. This means that you are proactively taking steps to reduce the likelihood or impact of the risk. By hiring a compliance consultant that specializes in the recent regulation changes, you're decreasing the probability of not meeting the new requirements, which is indeed a risk mitigation strategy. The other options, 'Accept', 'Avoid', and 'Transfer', are incorrect in this context. 'Accept' means that you acknowledge the risk but decide not to do anything about it, which clearly doesn't apply here. 'Avoid' means you change your plans to bypass the risk altogether, which isn't applicable as you're still pursuing the project. 'Transfer' means that you offload the risk to a third party, typically through insurance or outsourcing, which isn't what is happening when you hire a consultant to help navigate regulations.

Question 3

As a PM, you are leading an IT infrastructure upgrade project for a banking application. A risk is identified that the project might face long delays due to the high complexity and strict security regulations. Despite potentially exceeding the project’s timeline and budget, the team opted to proceed with the original project plan but to closely monitor it. Identify the type of risk response strategy chosen?

Correct Answer: Accept

In the scenario described in the question, the team has decided to proceed with the original project plan despite the identified risks of potential delays and higher costs due to complexity and strict regulations. They have also decided to closely monitor the project. This is known as 'Accept' strategy in risk management. This term is used when the project team decides to acknowledge the risk and prepare a contingency plan. The 'Accept' strategy is often chosen when the risks are inherent to the project or when the cost of other strategies outweighs the benefits. The teams do not attempt to reduce, share or eliminate the risk, instead, they continue with the project as planned while trying to minimize the impact or likelihood of the risk. The other options offered: 'Mitigate', 'Transfer' and 'Avoid' are all different risk management strategies. 'Mitigate' would mean actions are taken to reduce the impact of the risk, 'Transfer' would involve passing the risk to a third party and 'Avoid' would mean changing the project plan to circumvent the risk- none of these strategies are chosen in the given scenario as they have decided to proceed with the original plan instead of trying to lessen or eliminate the risk through these strategies.

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