Project Management: Foundations to Practice · Risk Management
Risk Response Strategies
Choosing the wrong response strategy for a given risk is a common, costly planning error. This chapter covers all eight standard strategies and how to match them correctly.
For threats, PMBOK identifies four standard response strategies: avoid, eliminating the risk entirely by changing the project plan; transfer, shifting the financial impact to a third party such as through insurance or a subcontract; mitigate, reducing the probability or impact of the risk without eliminating it; and accept, consciously choosing to take no action, usually because the cost of responding exceeds the risk's expected impact [1].
Key Takeaways
- The four threat response strategies are avoid, transfer, mitigate, and accept.
- The four opportunity response strategies are exploit, share, enhance, and accept, mirroring the threat strategies.
- Mitigating a risk that should have been transferred can leave costly, avoidable financial exposure in place.
- A risk outside the team's core competency, like currency fluctuation, is often better transferred to a specialized third party than mitigated internally.