:RSK4805 ASSIGNMENT 3 [DETAILED
ANSWERS] SEMESTER 2 2024
Question 1: Explain the importance of identifying risks in a project. How
does early identification impact the overall risk management process?
Answer: Identifying risks early in a project is crucial because it allows the project team to
anticipate potential issues before they escalate. Early identification helps in developing effective
mitigation strategies, allocating resources efficiently, and preventing project delays or failures.
By addressing risks proactively, teams can reduce their impact on project objectives and
enhance the likelihood of project success. Additionally, early identification helps in better
planning and risk communication, which can improve stakeholder confidence and support.
Question 2: Describe a method for analyzing the likelihood and impact of a
risk. How does this method help in prioritizing risks?
Answer: One common method for analyzing the likelihood and impact of a risk is the Risk
Matrix. This tool involves plotting risks on a matrix where one axis represents the likelihood of
occurrence and the other axis represents the impact or consequence of the risk. Each risk is
scored based on its likelihood and impact, and the scores are used to determine its priority. The
Risk Matrix helps prioritize risks by highlighting which ones pose the greatest threat to project
objectives, allowing teams to focus on high-priority risks that require immediate attention.
Question 3: What are some common risk treatment strategies? Provide
examples of how these strategies can be applied in a project.
Answer: Common risk treatment strategies include risk avoidance, risk reduction, risk sharing,
and risk retention.
● Risk Avoidance: Changing the project plan to eliminate the risk or its impact. For
example, if a project involves a high-risk technology, switching to a more proven
technology can avoid the risk.
● Risk Reduction: Implementing measures to reduce the likelihood or impact of the risk.
For instance, conducting thorough testing to reduce the risk of software failure.
● Risk Sharing: Spreading the risk across other parties. An example is outsourcing
certain project components to specialists who can manage the associated risks better.
● Risk Retention: Accepting the risk when its impact is minimal or when the cost of
mitigation is higher than the risk itself. For instance, a company might retain the risk of
minor equipment failures if the cost of insurance is too high.
Question 4: How can organizations ensure effective monitoring and review
of risks throughout a project?
Answer: Organizations can ensure effective monitoring and review of risks by implementing a
structured risk management process. This includes regularly updating the risk register with new
ANSWERS] SEMESTER 2 2024
Question 1: Explain the importance of identifying risks in a project. How
does early identification impact the overall risk management process?
Answer: Identifying risks early in a project is crucial because it allows the project team to
anticipate potential issues before they escalate. Early identification helps in developing effective
mitigation strategies, allocating resources efficiently, and preventing project delays or failures.
By addressing risks proactively, teams can reduce their impact on project objectives and
enhance the likelihood of project success. Additionally, early identification helps in better
planning and risk communication, which can improve stakeholder confidence and support.
Question 2: Describe a method for analyzing the likelihood and impact of a
risk. How does this method help in prioritizing risks?
Answer: One common method for analyzing the likelihood and impact of a risk is the Risk
Matrix. This tool involves plotting risks on a matrix where one axis represents the likelihood of
occurrence and the other axis represents the impact or consequence of the risk. Each risk is
scored based on its likelihood and impact, and the scores are used to determine its priority. The
Risk Matrix helps prioritize risks by highlighting which ones pose the greatest threat to project
objectives, allowing teams to focus on high-priority risks that require immediate attention.
Question 3: What are some common risk treatment strategies? Provide
examples of how these strategies can be applied in a project.
Answer: Common risk treatment strategies include risk avoidance, risk reduction, risk sharing,
and risk retention.
● Risk Avoidance: Changing the project plan to eliminate the risk or its impact. For
example, if a project involves a high-risk technology, switching to a more proven
technology can avoid the risk.
● Risk Reduction: Implementing measures to reduce the likelihood or impact of the risk.
For instance, conducting thorough testing to reduce the risk of software failure.
● Risk Sharing: Spreading the risk across other parties. An example is outsourcing
certain project components to specialists who can manage the associated risks better.
● Risk Retention: Accepting the risk when its impact is minimal or when the cost of
mitigation is higher than the risk itself. For instance, a company might retain the risk of
minor equipment failures if the cost of insurance is too high.
Question 4: How can organizations ensure effective monitoring and review
of risks throughout a project?
Answer: Organizations can ensure effective monitoring and review of risks by implementing a
structured risk management process. This includes regularly updating the risk register with new
