Risk Risks
Key Concepts
Risks
| |
John Spacey, June 30, 2017 updated on February 26, 2023
Risk response is the process of controlling identified risks. This is a basic step in any risk management process. Risk response is a planning and decision making process whereby stakeholders decide how to deal with each risk. The following are the basic types of risk response.
Change your strategy or plans to avoid the risk.Take action to reduce the risk. For example, work procedures and equipment designed to reduce workplace safety risks.Transfer the risk to a third party. For example, purchase fire insurance for an unfinished building.
Decide to take the risk. Generally speaking, all strategies and plans involve some level of risk. Risk also has a relationship with reward whereby reducing risk towards zero can also reduce potential payback.ShareDistributing the risk across multiple partners, teams or projects. For example, four projects each have a software architect and each identifies the risk that the software architect is a critical resource. They decide to share the risk by pooling the software architects into a team that provides a service to all four projects. If one architect quits, the service can be continued.
ContingencyMaking plans to handle the risk if it occurs. For example, back-out procedures that can restore a system if a launch fails.EnhanceEnhancement is a response for a positive risk. Project management methodologies may view finishing a task early or under budget as a positive risk. Enhancement is an action that is taken to increase the chance of the risk occurring.
ExploitAnother treatment for positive risks. Exploiting a risk is to make use of resources that become available if the risk occurs. For example, if a task finishes early, you plan to reassign the resource to more work.
Risk Management
This is the complete list of articles we have written about risk management.
If you enjoyed this page, please consider bookmarking Simplicable.
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|
