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Risk Minimization vs Risk Management

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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.

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
Safety
Health
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
ERM
Financial Risk
Innovation Risk
Insurance
Investing Risk
Moment Of Risk
Plan Template
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Positive Risk
Project Risk
Reputational Risk
Residual Risk
Resilience
Resource Risk
Risk
Risk Acceptance
Risk Analysis
Risk Appetite
Risk Awareness
Risk Capacity
Risk Communication
Risk Contingency
Risk Control
Risk Culture
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Risk Evaluation
Risk Exposure
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Risk Intelligence
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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
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When risk management resulting in choosing to accept a risk.

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Risk Communication

A definition of risk communication with examples.

Risk Mitigation

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Risk Sharing

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Risk Response

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Risk Exposure

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Acceptable Risk

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Minimax Criterion

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Risk Estimates

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Business Risk Management

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Technology Risk Management

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