Risk Strategy (Definition)
The choice a company makes for dealing with a specific risk.
The main Risk Strategies are:
- Risk Avoidance.
Choosing to discontinue or not undertake an operation to avoid the risks involved. (e.g. closing or not opening a branch
in a dangerous location.)
- Risk Mitigation or Risk Reduction.
Taking steps to reduce the probability or impact of a risk.
- Risk Transfer.
Shifting the risk to another organization by taking out insurance, or sub-contracting an activity to another organziation.
- Risk Acceptance. Recognizing the risk but choosing not to take any
specific action to control or reduce it. Self-insurance, where a company chooses
to pay for losses itself rather than take out insurance, is a form of risk
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