Risk Breakdown Structure

Correct Answer: To ensure specific risk events are grouped by their common underlying characteristics

The key purpose of categorizing risks at the tertiary level in an RBS is to group specific risk events by their common underlying characteristics. This is the most accurate answer because: A tertiary level in RBS serves to: - Break down broader risk categories into more specific, manageable subcategories - Enable precise risk identification and classification - Facilitate better risk analysis and response planning - Help in identifying patterns and commonalities among risks Why other answers are incorrect: Tracking project dependencies is more related to project scheduling and network diagrams, not primarily an RBS function. Aligning with organizational policies and international standards typically happens at higher levels of the RBS, not at the tertiary level. Creating boundaries between technical, operational, and strategic risks occurs at the primary (top) level of the RBS, not at the tertiary level.

Correct Answer: The RBS needs refinement to establish clearer risk classification criteria

When the same risks appear under multiple branches in a Risk Breakdown Structure (RBS), it indicates a fundamental issue with the classification criteria and structure. The correct answer reflects this by identifying the need for refinement in the RBS structure to establish clearer risk classification criteria. This is essential because: 1. Each risk should have a clear, unique placement in the RBS 2. Duplicate entries create confusion and complexity in risk tracking 3. Clear classification helps in better risk analysis and response planning 4. Proper categorization enables more efficient risk management The other answers are incorrect because: - Having the same risk appear in multiple categories is not a sign of comprehensive coverage, but rather of unclear categorization - This pattern does not follow best practices, as best practices advocate for clear, unique categorization of risks - Multiple appearances of the same risk does not reflect advanced risk management - it suggests inefficient categorization that could lead to confusion and potentially duplicate or conflicting risk responses

Correct Answer: Group risks by their primary source and create cross-references for secondary impacts

A Risk Breakdown Structure (RBS) is most effective when it organizes risks by their primary source while maintaining cross-references for secondary impacts. This approach is optimal because: 1. It allows clear identification of root causes 2. It enables tracking of both direct and cascading effects 3. It maintains relationships between interconnected risks 4. It provides a comprehensive view of risk relationships The other answers are less effective because: Separating internal and external risks creates artificial boundaries that may obscure shared root causes. Basing categories solely on organizational structure may miss important cross-functional risks and their interconnections. Parallel hierarchies can create unnecessary complexity and potential redundancy in risk categorization, making it harder to identify common sources of multiple risks.