Risk Cause-Event-Effect Concept
The Risk Cause-Event-Effect concept is a structured approach in PRINCE2's Risk Theme that helps teams articulate risks with clarity and precision. This framework breaks down risk descriptions into three distinct components: the cause (source or trigger of uncertainty), the event (the uncertain occurrence itself), and the effect (consequences or impact on objectives if the event materializes). By separating these elements, project teams can develop more comprehensive understanding of risks and design more effective responses. The cause component identifies the originating factors or conditions that might lead to uncertainty, enabling teams to potentially address root causes before risks materialize. The event component describes what might happen, focusing on the specific uncertain occurrence without conflating it with its origins or consequences. The effect component articulates the specific impacts on project objectives, which helps in assessing the significance of the risk and prioritizing response efforts. Using this structured approach ensures that risk descriptions are clear, unambiguous, and complete, avoiding vague statements that might lead to ineffective risk management. The Cause-Event-Effect concept supports several PRINCE2 principles, particularly "Focus on Products" (by linking risks to deliverables), "Manage by Exception" (by clarifying which effects might exceed tolerances), and "Learn from Experience" (by documenting risk patterns that might inform future projects). This approach also facilitates better communication about risks among stakeholders, as the structured format reduces misunderstandings about what constitutes the risk and its potential consequences.
Risk Cause-Event-Effect in PRINCE2: The Essential Guide
What is the Risk Cause-Event-Effect Concept?
The Risk Cause-Event-Effect concept is a fundamental component of risk management in PRINCE2 methodology. It provides a structured approach to understanding and describing risks by breaking them down into three distinct elements:
- Cause: The source or trigger that could give rise to the risk
- Event: The uncertain situation that might occur
- Effect: The impact or consequence if the risk materializes
Why is Risk Cause-Event-Effect Important?
Understanding this concept is crucial because it:
1. Enables clear communication about risks across the project team
2. Facilitates accurate risk identification and assessment
3. Helps in developing appropriate risk responses
4. Prevents confusion between causes, events, and effects
5. Forms the foundation for the Risk Register entries
How the Concept Works in Practice
When identifying risks in PRINCE2, you should express them using this structure:
"As a result of [cause], [event] may occur, which would lead to [effect]."
For example:
"As a result of [limited staff availability], [the testing phase may be delayed], which would lead to [missed delivery deadlines and financial penalties]."
Here, the cause is limited staff availability, the event is the delayed testing phase, and the effect is missed deadlines and penalties.
Common Mistakes to Avoid
1. Confusing causes with events or effects with events
2. Describing only one or two components rather than all three
3. Treating effects as separate risks rather than consequences
4. Focusing too much on causes and too little on effects
Exam Tips: Answering Questions on Risk Cause-Event-Effect Concept
1. Distinguish between components: Be able to correctly identify which part of a risk description is the cause, which is the event, and which is the effect.
2. Complete risk statements: For questions asking you to complete risk statements, ensure you maintain the proper cause-event-effect structure.
3. Scenario analysis: In scenario-based questions, extract the risk components from the given information and organize them correctly.
4. Multiple-choice strategies: When facing multiple-choice questions, eliminate options that mix up causes and effects or that present incomplete risk descriptions.
5. Risk Register entries: Remember that properly structured risk descriptions using the cause-event-effect model are essential for Risk Register entries.
Example Exam Question Types
1. Identify the cause, event, and effect in a given risk statement
2. Complete a partially written risk statement with appropriate elements
3. Select the correctly structured risk statement from multiple options
4. Determine if a risk statement follows the correct structure
Practice Example
Question: Which of the following risk statements correctly follows the cause-event-effect structure?
A. The project will exceed its budget because requirements might change, resulting in additional work.
B. As a result of potential supplier bankruptcy, delivery of key components may be delayed, which would lead to project schedule overruns.
C. The effect of poor testing will be system failures after implementation due to undetected bugs.
D. Project delays will cause budget overruns which stem from resource shortages.
The correct answer is B, which clearly shows cause (supplier bankruptcy), event (delayed delivery), and effect (schedule overruns) in the proper sequence.
By mastering the Risk Cause-Event-Effect concept, you'll enhance your risk management capabilities and be well-prepared for the PRINCE2 Foundation exam.
Go Premium
PRINCE2 Foundation Preparation Package (2025)
- 1825 Superior-grade PRINCE2 Foundation practice questions.
- Accelerated Mastery: Deep dive into critical topics to fast-track your mastery.
- Unlock Effortless PRINCE2 Foundation preparation: 5 full exams.
- 100% Satisfaction Guaranteed: Full refund with no questions if unsatisfied.
- Bonus: If you upgrade now you get upgraded access to all courses
- Risk-Free Decision: Start with a 7-day free trial - get premium features at no cost!