Negative and Positive Risk Response Strategies for a Project

Negative Risk Response Strategies

Your project sponsor has asked you to explain the negative threat risk response strategies and the opportunity or positive risk response strategies for a project. How would you describe them to the sponsor?

I'll clarify to the project sponsor that risk management preparation includes finding ways to minimize or remove any risks to the project, as well as opportunities to increase its impact. Before they occur, project managers will be working to minimize the risks. The project managers should also work to ensure opportunities happen and for increasing the probability and impact of risks, increasing the likelihood and impact of opportunities. The project manager needs to provide a comprehensive contingency plan for the risks that cannot be mitigated and a response plan if contingencies do not perform. Because of resource and time constraints, it isn't possible to remove all project risks. Risk-planning is iterative, and the project manager will check all project risks. Qualitative risk, quantitative risk, and risk response planning do not end ones you begin to work on the project.

Risk Response Strategies for Negative risks as follows:

Aviod: The team tries to eliminate the risk by trying to eliminate its impact using this method. This can be done by making changes to the timetable or scope of the project.

Mitigate: Some risks cannot be eliminated. However, its impact can be reduced

Transfer: Using this method, whether they lack the skills or have a busy schedule, the user can pass the risk on to someone else.

Accpet: This approach is used both for negative threats and for positive ones. The team does nothing but accept and acknowledge the risk in this method. Active acceptance may involve contingency plans to be implemented if a risk occurs and allocation of time and cost reserves to the project. A decision to accept risk must be communicated to stakeholders.

Risk Response Strategies for Positive risks as follows:

Accpet: As mentioned above this can be used for both positive and negative risks. Using this method, risks are acknowledged for positive risks and recorded in a risk management contingency reserve.

Enhance: Using this approach to maximize its advantages, the chances of risks are increased. It is being treated as an opportunity.

Escalate: It is equivalent to the negative response strategy, where the team leader raises the risk to upper management as it prohibits them from taking action because of their level of authority.

Exploit: The next opportunity is realized using this method. The team makes sure they realize and don't avoid the opportunity.

Share: In this approach, it allocates ownership of opportunity to a third-party

If the project manager reacts to threats or opportunities it must be time-bound to implement strategies. The selected effort has to be appropriate to the severity of the risk. A single response can be an act of multiple risk events and strategy can be selected not only by the project manager but also by the team, the stakeholders, and experts. Sharing this information with the project sponsor would enable them to understand the difference in all aspects of handling risks and sign-off on it.