You are the project manager for a construction project.
The project includes a work that involves very high financial risks.
You decide to insure processes so that any ill happening can be compensated.
Which type of strategies have you used to deal with the risks involved with that particular work?
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A. B. C. D.A.
The project manager in this scenario has used the transfer strategy to deal with the high financial risks involved in the project work.
Transfer is a risk response strategy where the risk is shifted to a third party, such as an insurance company or a contractor, who can better handle the risk. In this case, the project manager has chosen to transfer the risk by insuring the processes, which means that if anything goes wrong, the financial losses will be covered by the insurance company.
Mitigate is a risk response strategy that aims to reduce the probability or impact of a risk. Accept is a strategy where the risk is recognized but no action is taken to avoid, mitigate or transfer it. Avoid is a strategy where the project team takes actions to eliminate the risk altogether.
In this scenario, the project manager has chosen to transfer the risk by insuring the processes. This means that the project team is acknowledging the risk, but is not taking any action to avoid or eliminate it. Instead, they are transferring the risk to the insurance company, which will be responsible for compensating any losses that may occur.
Overall, the transfer strategy can be an effective way to manage risks, especially when the risk is too high for the project team to handle or when the cost of mitigating the risk is too high. However, it is important to note that the transfer strategy does not eliminate the risk altogether and the project team should still have a plan in place in case anything goes wrong.