|
| |
Risk reduction is an action or inaction designed to decrease the potential for future losses. This includes strategies to reduce the probability of a risk occurring and strategies to reduce the impact if a risk does occur. Generally speaking, there are four ways to reduce risk:
Risk AvoidanceAvoiding an activity or position that may cause risk. For example, a business may decide that a new product strategy is too risky to pursue.Risk MitigationPursuing an activity but finding ways to reduce its associated risks. For example, an amusement park can mitigate safety risks by eliminating latent human error in their maintenance procedures.
Risk TransferPaying to transfer risks to an insurance company or business partner.Risk SharingFinding ways to reduce risks by pooling resources with others. For example, a group of companies may reduce the risk of losing key executives by planning to transfer resources on a temporary basis in the case of an unexpected loss. |
Type | | Definition | Reducing risk exposures by avoiding, mitigating, transferring or sharing risks. | Related Concepts | |
Next: Risk Mitigation
More about risk reduction:
If you enjoyed this page, please consider bookmarking Simplicable.
The four things that can be done about risk.
An overview of various types of insurance.
An overview of different ways to measure risk with examples.
A list of common risk impacts with a few detailed examples.
A list of the common measurements for business risk.
An overview of risk decisions with examples.
An overview of risk planning with examples.
A list of common project risks.
An overview of facility risk with examples.
The probability that you will fail to meet a goal due to a lack of resources such as skilled workers or financing.
An overview of schedule risk with examples.
An overview with schedule crashing for projects with examples.
An overview of fast tracking with examples, advantages, disadvantages and alternatives.
TrendingThe most popular articles on Simplicable in the past day.
Recent posts or updates on Simplicable.
Site Map
© 2010-2023 Simplicable. All Rights Reserved. Reproduction of materials found on this site, in any form, without explicit permission is prohibited.
View credits & copyrights or citation information for this page.
|
