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8 Examples of Risk Reduction

 , November 27, 2015 updated on March 19, 2021
Risk reduction, or risk mitigation, is any strategy that reduces the impact or probability of a risk, potentially to zero. The following are a few examples:

1. Health And Safety

Requiring workers on a construction site to use safety equipment.

2. Exchange Rates

A European car manufacturer reduces exchange rate exposure to the Japanese Yen by paying Japanese part suppliers with yen from their sales in Japan.

3. Customer Service

A hotel reduces the risk of bad customer reviews by empowering all staff to handle customer complaints on the spot. For example, staff are able to upgrade a customer's room upon receiving a reasonable complaint.

4. Quality

A car manufacturer reduces the risk of expensive and damaging model recalls with more rigorous quality assurance processes.

5. Dispute Risk

A construction company reduces the risk of disputes by sending representatives to neighbors of a site to explain the schedule and what will be done to keep noise and impact to a minimum.

6. Weather Risk

A solar power company reduces weather risk by scheduling critical construction tasks during the months with the best weather in a particular region.

7. Financial Risk

An infrastructure company reduces interest rate risk and refinancing risk by selling long term bonds when rates are low.

8. Project Management

A project manager reduces project risk by breaking a project into small regular deliveries of weeks in duration.
Overview: Risk Reduction
TypeRisk
Also Known AsRisk Mitigation
DefinitionAn action that reduces the impact or probability of a risk.
Risk TreatmentsAvoid
Reduce
Transfer
Accept

Risk Treatment

This is the complete list of articles we have written about risk treatment.
Accept
Avoid
Contingency
Control
Insurance
Mitigate
Prevent
Reduce
Reduce
Response
Risk Measurement
Sharing
Transfer
More ...
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