PMP Practice Question: Business Environment: strategy and project benefits

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

• ✓

  Implement the contingency plan or develop a workaround and update the risk register

  Why this is correct

  When an identified risk event materializes, the project manager's immediate and primary responsibility is to execute the pre-defined contingency plan. This plan outlines specific actions to take if the risk occurs, aiming to minimize its negative impact on project objectives. If a contingency plan is absent or proves insufficient, the team must promptly develop a workaround to address the immediate issue. Subsequently, the risk register must be updated to reflect the risk's status, actual impact, and the effectiveness of the response, ensuring accurate project documentation and communication.

• ✗

  Notify the sponsor and request additional time and budget

  Why it's wrong here

  While informing the sponsor about significant project impacts is crucial, it is not the initial action when a risk event occurs. The project manager's first duty is to actively manage the risk by implementing pre-planned responses or devising immediate solutions to contain the issue. Requesting additional time and budget should only occur after exhausting available project resources and authority, or if the risk's impact clearly exceeds the project's capacity to absorb it, making it a secondary step.

• ✗

  Ignore the risk because the mitigation strategy was already implemented

  Why it's wrong here

  Ignoring a risk event that has already occurred is a severe breach of project management responsibility and completely unacceptable. A mitigation strategy is a proactive measure designed to reduce the probability or impact of a risk *before* it happens. If the risk event has materialized, it indicates either the mitigation was ineffective, or a residual risk has surfaced, requiring immediate reactive measures. Failing to address an active risk allows its negative consequences to unfold unchecked, directly jeopardizing project success.

• ✗

  Escalate the risk to the steering committee for resolution

  Why it's wrong here

  Escalating a risk to the steering committee for resolution should be a last resort, reserved for situations where the risk's impact or required response falls outside the project manager's delegated authority or available resources. The project manager is expected to first utilize their own authority, the project team's capabilities, and allocated contingency reserves to address identified risks. Premature escalation undermines the project manager's accountability and can unnecessarily burden higher-level governance bodies with issues that should be managed at the project level.

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