Overall Risk Acceptance: Active vs Passive Strategies
PMBOK v8 Definition
Risk acceptance acknowledges that a project risk exists, but no proactive action is taken unless the risk occurs. The organization may choose to continue with the project as currently defined, even if overall project risk is outside the agreed-upon thresholds. Risk acceptance can be either active or passive. The most common active acceptance strategy is to establish an overall contingency reserve for the project, including amounts of time, money, or resources to be used if the project exceeds its thresholds. Passive acceptance involves no proactive action apart from periodic review of the level of overall project risk to ensure that it does not change significantly.
Note: This concept applies to both individual project risks and overall project risk within the Risk Response Planning process (Planning Process Group, Project Risk Management Knowledge Area).
Why It Matters for the Exam
Overall risk acceptance appears frequently on the PMI exam because candidates consistently confuse active versus passive acceptance, and they misunderstand when acceptance is appropriate versus other response strategies. Expect questions that test your ability to distinguish between these two forms, especially in scenario-based questions where the project manager must decide whether to establish a contingency reserve or simply monitor the risk.
Key Points to Remember (for the exam)
- Two Types: Risk acceptance is either active (proactive preparation) or passive (no action except periodic review)
- Active Acceptance Tool: The most common active acceptance strategy is establishing a contingency reserve (time, money, or resources)
- Passive Acceptance Action: No proactive action is taken; only periodic review to check if the risk changes significantly
- When to Use: Appropriate when no other response strategy is possible or cost-effective, or for low-priority risks
- Overall Project Risk: Acceptance can be chosen even when overall project risk is outside agreed-upon thresholds
- Common Confusion: Active acceptance ≠ risk mitigation; active acceptance prepares for the risk occurring, while mitigation reduces the probability or impact
- Key Distinction: Contingency reserves are for known risks that are accepted; management reserves are for unknown risks
Typical PMI Exam Example
A project manager identifies a threat that could delay the project by two weeks. After evaluating all response strategies, the team determines that no cost-effective mitigation or transfer option exists. The project manager decides to establish a contingency reserve of 10 days in the schedule. This is an example of: Active acceptance (because a contingency reserve was established).
PMI Exam Traps
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Trap: Confusing active acceptance with risk mitigation
- Reality: Active acceptance establishes a reserve to deal with the risk IF it occurs; mitigation reduces the probability or impact of the risk
-
Trap: Thinking passive acceptance means ignoring the risk
- Reality: Passive acceptance still requires periodic review to monitor if the risk changes significantly
-
Trap: Assuming acceptance is only for threats
- Reality: Acceptance applies to both threats (negative risks) and opportunities (positive risks); for opportunities, a contingency reserve can be established to take advantage if the opportunity occurs
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Trap: Confusing contingency reserve with management reserve
- Reality: Contingency reserve is for accepted known risks; management reserve is for unknown risks (unknown-unknowns)
Important PMI Connections
| Related Concept | Relationship Type | Exam Attention Point |
|---|---|---|
| Contingency Reserve | Key tool of active acceptance | Contingency reserve is the most common active acceptance strategy; tested as the primary example |
| Risk Mitigation | Alternative strategy | Mitigation reduces probability/impact; acceptance prepares for occurrence—candidates confuse these |
| Risk Enhancement | Alternative strategy (for opportunities) | Enhancement increases probability/impact of positive risks; acceptance for opportunities uses contingency reserve to take advantage |
| Overall Project Risk | Scope of application | Acceptance can be applied to overall project risk even when risk is outside thresholds—this is frequently tested |
| SWOT Analysis | Risk identification technique | SWOT increases breadth of identified risks; accepted risks may come from SWOT-identified threats/opportunities |
Quick Review Questions
- A project manager decides to set aside $50,000 in the budget for a known risk that cannot be mitigated. What type of risk response strategy is this?
- What is the difference between active acceptance and passive acceptance in terms of actions taken?
- When a project team chooses to accept an opportunity but takes no proactive action, what is the minimum requirement for this strategy?
- Can overall project risk acceptance be chosen when the risk level exceeds agreed-upon thresholds? If so, under what conditions?
- A project manager monitors a low-priority threat monthly but has established no reserves or action plans. Is this active or passive acceptance?
PMBOK v8 Reference
Section 11.5 - Plan Risk Responses (Risk Acceptance for individual risks and overall project risk)
Note: The specific content on overall risk acceptance appears in the context of Strategies for Overall Project Risk, while individual risk acceptance is covered under Strategies for Threats and Strategies for Opportunities.