You work as a project manager for BlueWell Inc.
You with your team are using a method or a (technical) process that conceives the risks even if all theoretically possible safety measures would be applied.
One of your team member wants to know that what is a residual risk.
What will you reply to your team member?
Click on the arrows to vote for the correct answer
A. B. C. D.formula to calculate residual risk is (inherent risk) x (control risk) where inherent risk is (threats vulnerability)
Answer: B is incorrect.
This is not a valid statement.
Residual risks are generally smaller risks that remain in the project after larger risks have been addressed.
The residual risk is the risk or danger of an action or an event, a method or a (technical) process that still conceives these dangers even if all theoretically possible safety measures would be applied.
The risks.
As a project manager, you and your team are using a risk management process that considers all possible risks, even if all theoretically possible safety measures are implemented. This process is likely a part of your organization's larger risk management framework or methodology.
Your team member has asked about residual risk. Residual risk refers to the risk that remains after all planned risk responses have been implemented. This residual risk may be due to the fact that some risks cannot be fully eliminated, or that the risk response measures were not effective in reducing the risk to an acceptable level.
Option A is incorrect because residual risk can still exist even if a risk response is not taken, and it is not necessarily because no risk response is taken.
Option B is partially correct in that residual risk can be a risk that cannot be fully addressed by a risk response. However, it can also be due to the fact that the risk response measures were not effective in reducing the risk to an acceptable level.
Option C is also partially correct in that residual risk may remain even after all possible risk responses have been implemented, but it is not always the case that this risk will remain no matter what type of risk response is offered.
Option D is the correct answer because residual risk is the risk that remains after planned risk responses are taken. This can occur due to several reasons, such as the risk response measures not being effective, or the residual risk being inherent and cannot be fully eliminated.
In summary, residual risk refers to the remaining risk that still exists even after all possible risk responses have been implemented. It is essential for project managers to understand residual risk to ensure that they can effectively manage risk and make informed decisions about the level of risk that is acceptable for their project.