HKSM

A risk response approach where the project team recognizes the risk is beyond its authority or control and hands ownership to a higher organizational level that can manage it more effectively.

Key Points

• Used when the risk exceeds the project team's scope, authority, or resources.
• Ownership is moved to a sponsor, program/portfolio management, PMO, or functional leadership.
• Different from transfer: escalation moves ownership upward within the organization, not to an external party.
• The project team documents and communicates the risk and may monitor status, but does not lead the response unless directed.

Example

A new government regulation will require major company-wide process changes and funding beyond the project's budget. The project manager escalates the risk to the program sponsor and compliance office so it can be addressed at the enterprise level.

PMP Example Question

A project team identifies a risk that requires cross-department decisions and budget authority the project does not have. What is the best response?

1. Transfer the risk by purchasing insurance.
2. Escalate the risk to the program sponsor for organization-wide handling.
3. Mitigate the risk by adding schedule contingency.
4. Accept the risk and update the risk register.

Correct Answer: B — Escalate the risk to the program sponsor

Explanation: The risk is beyond the project's authority and resources, so ownership should be moved to a higher organizational level that can address it.