Change Management Risk Assessment & Management 3 — Questions and Answers
Question 1: What is the purpose of a risk breakdown structure (RBS) in change management?
- To assign budget for each identified risk
- To hierarchically categorize risks by source or type (Correct answer)
- To list stakeholders responsible for risk resolution
- To define the sequence of risk response activities
Correct answer: To hierarchically categorize risks by source or type
An RBS organizes risks into a hierarchy by category, helping teams systematically identify and group related risks.
Question 2: During risk monitoring, a key risk indicator (KRI) threshold is breached. What is the immediate next step?
- Close the risk and document it as realized
- Trigger the predefined risk response plan (Correct answer)
- Escalate directly to the board of directors
- Increase the project budget to cover the risk
Correct answer: Trigger the predefined risk response plan
Breaching a KRI threshold signals that the agreed trigger point has been reached, activating the planned risk response.
Question 3: Which type of risk response involves shifting the financial consequence of a risk to another party?
- Avoid
- Mitigate
- Transfer (Correct answer)
- Exploit
Correct answer: Transfer
Risk transfer moves the financial impact to a third party, commonly through insurance or contractual clauses.
Question 4: A change initiative has a 30% probability of a $500,000 loss. What is the expected monetary value (EMV) of this risk?
- -$150,000 (Correct answer)
- -$500,000
- $150,000
- $350,000
Correct answer: -$150,000
EMV = probability × impact = 0.30 × -$500,000 = -$150,000, representing the average expected loss.
Question 5: What distinguishes a 'secondary risk' from a 'residual risk' in change management?
- Secondary risks are lower priority; residual risks are higher priority
- Secondary risks arise from implementing a response; residual risks remain after a response is applied (Correct answer)
- Residual risks are transferred; secondary risks are avoided
- They are synonyms used interchangeably in risk management
Correct answer: Secondary risks arise from implementing a response; residual risks remain after a response is applied
Secondary risks are new risks created by a mitigation action, while residual risks are the remaining exposure after mitigation is applied.
Question 6: An organization is implementing an ERP change. Which risk factor most commonly causes ERP implementations to fail?
- Insufficient hardware provisioning
- Inadequate change management and user adoption (Correct answer)
- Weak encryption protocols
- Lack of vendor support contracts
Correct answer: Inadequate change management and user adoption
Research consistently shows that poor change management—particularly user adoption and training gaps—is the leading cause of ERP failure.
Question 7: What risk management tool maps risks on axes of probability and impact to visually prioritize them?
- Responsibility assignment matrix
- Risk probability and impact matrix (heat map) (Correct answer)
- Stakeholder engagement matrix
- Gantt chart
Correct answer: Risk probability and impact matrix (heat map)
A risk heat map (probability-impact matrix) visually plots risks so teams can quickly identify and prioritize the most critical ones.
Change Management Risk Assessment & Management 3
What is the purpose of a risk breakdown structure (RBS) in change management?