The Difference
Risk minimization seeks to drive a particular risk exposure towards zero. Risk management is the process of identifying and treating each risk in a cost effective and practical way that considers opportunity costs.Example
It is common for risks in areas such as health and safety to be minimized as it is typically unacceptable for an organization to sacrifice the safety of employees, customers and communities. For example, aircraft maintenance might be described as a risk minimizing activity.Business strategies such as product development involve risk management that can't be called risk minimization because risks are commonly accepted. For example, an innovative firm may choose to accept significant risks in order to achieve time to market, reduce cost and seize market opportunities.| Risk Minimization vs Risk Management | ||
Risk Minimization | Risk Management | |
Definition | The process of reducing a risk to zero. | The process of identifying and treating risk in support of an organization's strategy. |
Example | SafetyHealth | Business Strategy |
Related Concepts | ||
