Project Risk Management: What is the difference between Avoid and Mitigate for PMP Exam?

Project Risk Management: What is the difference between Avoid and Mitigate for PMP Exam?

January 29, 2022 0 By managementproject

Project Risk Management: What is the difference between Avoid and Mitigate for PMP Exam?

 

Risk Management Strategies

 

In project risk management, there are several risk management strategies as recommended in the PMBOK® Guide for positive or negative risks:

  • For negative risks:
    • Mitigate
    • Avoid
    • Transfer
    • Accept
    • Escalate
  • For positive risks (i.e. opportunities):
    • Enhance
    • Exploit
    • Share
    • Accept

 

Avoid VS Mitigate

 

Out of the five risk management strategies for negative risks, “avoid” and “mitigate” are always not thoroughly understood and may be easily confused.

Both “avoid” and “mitigate” aims at preventing the risks from occurring, yet there is one crucial different between these two risk management strategies.

This post will expound on the similarities and differences of Avoid vs Mitigate and what project managers would need to know for the exam.

  • Avoid: taking any possible measures/actions (e.g. changing the project plan or approach) to completely prevent the risks from occurring/eliminate the adverse effects once they occur
    • not many risks may be avoided (not realistic for most cases)
    • avoid usually involves a lot of costs
  • Mitigate: taking measures/actions (e.g. changing the project plan or approach) to reduce the likelihood of the risks from occurring/minimize the impact once they occur
    • some residual risks may remain

 

Other Negative Risk Management Strategies

 

In addition, there are three more negative risk management strategies as outlined in the PMBOK® Guide:

  • Transfer: the negative impacts related to the occurrence of the risk are shifted to a 3rd party
    • the 3rd party will absorb all the losses
    • may be arranged in the form of insurance policy or penalty clause
    • usually involve contractual arrangements and considerations
  • Accept: the negative risks are to be accepted passively
    • no active actions / measures are carried out to reduce the likelihood of occurrence / degree of negative impact which might be caused by the occurrence of the risk
    • workarounds may be carried out as a response once the risks occur
  • Escalate: escalate the project risk to the appropriate party to handle it
    • no longer a responsibility of the project manager
    • can be deleted from the risk register or leave it there with a remark

Conclusion: Avoid vs Mitigate for PMP® Exam

 

To distinguish between Avoid vs Mitigate, remember that:

  • Avoid: to completely eliminate the likelihood / impact of the risks
  • Mitigate: to reduce the impacts / the likelihood of occurrence of the risks