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Risk Minimization vs Risk Management

 , updated on August 24, 2017
Risk minimization is the process of reducing a risk exposure towards zero. Minimizing a risk can be expensive and counterproductive due to factors such as secondary risks and opportunity costs. Generally speaking, it is more common to optimize risks for a risk tolerance than to minimize them.
Risk management is the process of identifying, analyzing and treating risks. This can include options such as accepting risk and partially mitigating risks that are often more practical than risk minimization.

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.


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
The process of reducing a risk to zero.
The process of identifying and treating risk in support of an organization's strategy.
Business Strategy
Related Concepts

Risk Management

This is the complete list of articles we have written about risk management.
Acceptable Risk
Business As Usual
Business Impact
Business Risks
Calculated Risk
Cascading Failure
Contingency Plan
Contingency Planning
Disaster Preparedness
Dread Risks
Economic Risk
Financial Risk
Innovation Risk
Investing Risk
Moment Of Risk
Plan Template
Political Risk
Positive Risk
Project Risk
Reputational Risk
Residual Risk
Resource Risk
Risk Acceptance
Risk Analysis
Risk Appetite
Risk Awareness
Risk Capacity
Risk Communication
Risk Contingency
Risk Control
Risk Culture
Risk Estimates
Risk Evaluation
Risk Exposure
Risk Impact
Risk Intelligence
Risk Management
Risk Matrix
Risk Measurement
Risk Mitigation
Risk Monitoring
Risk Objectives
Risk Prevention
Risk Probability
Risk Profile
Risk Reduction
Risk Register
Risk Response
Risk Sharing
Risk Taking
Risk Tolerance
Risk Treatment
Risk Trigger
Risk-Reward Ratio
Seasonal Risk
Secondary Risk
Special Risks
Strategy Risk
Tactical Risk
Technology Risk
Unknown Risks
Upside Risk
More ...
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Risk Treatment

The four things that can be done about risk.

Risk Acceptance

When risk management resulting in choosing to accept a risk.

Risk Avoidance

An overview of risk avoidance with examples.

Risk Control

A list of common risk controls.

Risk Communication

A definition of risk communication with examples.

Risk Mitigation

A list of techniques for reducing risk.

Risk Reduction

The four ways to reduce risk.

Risk Sharing

The practice of distributing risks.

Risk Transfer

An overview of risk transfer.

Risk Contingency

A definition of risk contingency with examples.

Risk Management

An overview of the risk management process.

Risk Evaluation

The basic steps of risk evaluation.

Risk Response

The common types of risk response.

Risk Exposure

A definition of risk exposure with example calculations.

Risk Monitoring

The common elements of risk monitoring.

Acceptable Risk

A definition of acceptable risk with examples.

Minimax Criterion

The definition of minimax criterion with examples.

Risk Estimates

The common types of risk estimate.

Business Risk Management

An overview of common business risk management techniques.

Technology Risk Management

A reasonably comprehensive overview of technology risk management.
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