Eric is the project manager of the MTC project for his company.
In this project a vendor has offered Eric a sizeable discount on all hardware if his order total for the project is more than $125,000
Right now, Eric is likely to spend $118,000 with vendor.
If Eric spends $7,000 his cost savings for the project will be $12,500, but he cannot purchase hardware if he cannot implement the hardware immediately due to organizational policies.
Eric consults with Amy and Allen, other project managers in the organization, and asks if she needs any hardware for their projects.
Both Amy and Allen need hardware and they agree to purchase the hardware through Eric's relationship with the vendor.
What positive risk response has happened in this instance?
Click on the arrows to vote for the correct answer
A. B. C. D.C.
The positive risk response that has happened in this instance is "enhancing," which is option D.
Enhancing is a risk response strategy that involves taking steps to increase the probability or the positive impact of an opportunity. In this situation, Eric has identified an opportunity to save money by purchasing hardware from a vendor. To take advantage of this opportunity, he needs to spend an additional $7,000 to reach the vendor's threshold of $125,000. However, he cannot purchase the hardware if he cannot implement it immediately due to organizational policies.
Eric's response to this risk is to consult with his colleagues, Amy and Allen, to see if they need hardware for their projects. By doing so, Eric has increased the probability of the opportunity, as now he will be able to purchase the hardware he needs to reach the vendor's threshold, and also help his colleagues with their hardware needs.
This response is an example of enhancing because Eric has taken steps to increase the probability of the opportunity, by expanding the scope of his purchase and buying additional hardware. This decision not only saves money but also helps Amy and Allen with their projects.
Transference is a risk response strategy that involves transferring the risk to another party, such as an insurance company. Exploiting is not a risk response strategy, but rather a negative term that implies taking advantage of someone or something. Sharing is a risk response strategy that involves sharing the risk with another party, such as a business partner. In this instance, Eric has not transferred, shared or exploited the risk, but instead enhanced the opportunity.