Risk Review

Correct Answer: Reassess the risk and update the risk response strategy

The best answer is to reassess the risk and update the risk response strategy. When a previously identified risk increases in both probability and impact, it indicates a significant change in the risk profile. As a project manager, it's crucial to address this change promptly and effectively. Reassessing the risk allows for a thorough evaluation of its new characteristics and potential consequences. Updating the risk response strategy ensures that the approach to managing this risk remains relevant and effective given its increased severity. This option is the most proactive and aligned with best practices in project risk management. It demonstrates a responsive and adaptive approach to managing evolving project risks. The other options are less appropriate: Continuing with the existing risk response plan would be inadequate given the increased risk severity. This approach fails to address the changed circumstances and could leave the project vulnerable. Escalating to senior management immediately may be premature. The project manager should first reassess the situation and update the strategy before deciding if escalation is necessary. Conducting a comprehensive review of all project risks, while valuable periodically, is not the most efficient next step when a specific risk has been identified as increasing in severity. It's more appropriate to focus on the immediate concern first.

Correct Answer: Re-evaluate the risk response strategy

The best answer is to re-evaluate the risk response strategy. When a previously identified risk evolves, it's crucial to reassess the situation and adjust the risk response strategy accordingly. In this case, the risk's probability has increased while its impact has decreased. This change in the risk profile necessitates a re-evaluation of the current strategy to ensure it remains appropriate and effective. Re-evaluating the risk response strategy allows the project manager to: 1. Assess if the current strategy is still suitable for the new risk profile. 2. Determine if new mitigation measures are needed to address the higher probability. 3. Consider if resources can be reallocated due to the lower impact. 4. Update the risk register and communication plans to reflect the changes. Maintaining the current strategy is not advisable as the risk profile has changed, even if the overall exposure might seem similar. The approach needs to be tailored to the new situation. Escalating to senior management is premature at this stage. As a project manager, it's your responsibility to first reassess the situation and only escalate if necessary after re-evaluation. Removing the risk from the register is inappropriate. Although the impact has decreased, the risk still exists and has a higher probability of occurrence. It should remain in the register with updated information.

Correct Answer: Analyze and compare the impacts of both risks, then decide.

The best approach to this situation would be to 'Analyze and compare the impacts of both risks, then decide'. In project management, risks cannot be overlooked, and every risk carries a potential impact to the project either positively or negatively. Therefore, it is always important to analyze and compare the impacts of the risks before deciding on what course of action to take. Ignoring both risks is not an effective strategy as it doesn't help mitigate potential project issues. Focusing solely on the schedule risk ignores the potential financial implications, which could be equally disastrous. Trying to eliminate both risks without analyzing is not smart either, as you need to understand their potential impacts to make informed decisions.