PRINCE2 – Foundation Exam Exam

Effective risk management is a pre-requisite to which of the following principles?

1. Defined project scope

2. Continued business justification

3. Stakeholder engagement

4. Quality assurance

The correct answer is: Continued business justification

Effective risk management is essential to the principle of continued business justification because it ensures that the project remains viable and aligned with business objectives throughout its lifecycle. This principle emphasizes that a project must always be justifiable in terms of its costs, benefits, and risk. By actively identifying, assessing, and managing risks, project managers can make informed decisions about whether to proceed, alter, or terminate a project based on its current risk profile and the benefits it offers. If risks are not effectively managed, the justification for the project's existence may weaken, leading to potential failure to deliver value. The other options, while important in their own right, do not directly correlate with the principle of continued business justification in the same way that effective risk management does. Defined project scope, stakeholder engagement, and quality assurance relate more to the structure and execution of the project rather than maintaining ongoing justification based on risk assessment and management.