What is the difference between avoiding a risk and accepting a risk?
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Avoiding risk is not the same as avoiding controls. Avoiding risk would be not doing something that puts you at risk in the first place. Accepting risk would be accepting your faith understanding risk. For example if i want to avid risk of getting a speeding ticket i should not drive faster than speed limit. If driving fast is more important to me than keeping my drivers license active then i can accept the risk and drive fast anyways thus risking of getting a speeding ticket. If i want to mitigate risk of getting a speeding ticket while speeding anyways i can implement a control that will warn me of cops ahead or make their radar detectors ineffective thus allowing me to do what i want to do but lowering my risk to an acceptable level.
The risk management process begins with identification - to examine a project "concept" for potential risks that could either threaten the project process itself, or the project outcome. But identification is only the beginning. It takes awareness and creative thinking to go beyond the analysis stage and figure out what comes next --- to pick the best option for risk control. This article explores the top three alternatives. Read on for more. Identify and Examine the RisksOnce probable risks are identified, they must then be examined and evaluated to determine the level of impact (consequenc) - i.e. will there be a negative impact, and how serious will it be? If the impact is serious, that raises another question - i.e. is the negative impact sufficiently serious as to warrant further action? If the answer is yes, management steps must be initiated for appropriate risk control. This is where the planning part comes in - to size up the options and make the best selections for responsive action. Read More: Planning for Project Governance Learn to Fast Track When it comes to managing, you need more than one approach to be consistently successful. The way you manage when surrounding conditions are good, is not the way you manage when time is running short, resources are stretched thin and people aren't working together. That's what fast tracking is for - and we can teach you how it's done. Learn More Getting Started: How Much Risk Is There?Your first step in the risk control process is to determine the need. At this point, you may have taken steps to acknowledge the potential impact of risks, but awareness may not be enough. While you may choose to accept one or more types of risks, you may not be willing, or able, to withstand others. And, considering the time, effort and potential cost of risk control strategies, any such effort should be expended wisely. Based on an analysis of probable risks, you may decide that you can withstand additional project expenses, but not schedule delays. As a result, you can focus your mitigation and control efforts onto timing risks, knowing that you could absorb certain increases in expenditures. Or, if your project schedule is aggressive, with limited time for risk analysis and control, you may decide to deal only with the most serious types of risks, taking your chances with others.
Option 1: Acting to Accept the RiskTo acknowledge the risk, but decide that any actions to avoid or mitigate the risk can be too costly or time consuming. Or, it may just be possible that the risk cannot be avoided or mitigated in any meaningful way, and the benefits of the project far outweigh the risks. Option 2: Acting to Avoid the RiskTo take action that will eliminate the risk in entirety. Depending upon the circumstances, you may need to change project scope, modify project plans, hire additional resources, or adopt different technical solutions. Avoidance can be costly, but it may be the only way to achieve project deliverables. Option 3: Acting to Mitigate the RiskTo take action that will minimize the potential impact of any given risk through the analysis and consideration of alternative solutions. In essence, this is a combination of acceptance and avoidance. You can alter plans and schedules, and take specific actions to minimize the chance that a risk will occur. And, you can also develop alternate plans to be enacted should the risk actually occur .... "i.e. if this happens, I will do that, but until then, I will stick with the original plan". In other words, you can be prepared in either event. While mitigating strategies provide the best of both worlds, that benefit cannot be realized without some expense in terms of time, equipment and staff resources. Choosing "Control" Options and Taking ActionEvery process needs a starting point, and when options are viewed in a structured manner, decision making is made easier and more readily justifiable. Whether you choose to accept, avoid or mitigate a given risk will vary based on specific needs, issues and circumstances. “Risk control” is a critical juncture in the risk management process. Every effort to control and mitigate risk has a price - in terms of time, money or resources. Before any action is taken to accept, avoid, or mitigate, these costs must be carefully considered. Risk control strategies must be carefully aligned with project needs, value and overall priority. Furthermore, risk control strategies must consider the impact that the risk could have on the project to ensure that control efforts are well placed. CHECK OUT THE FAST TRACK PROJECT TOOLKIT.If you're looking for a fast, easy way to achieve project planning success, you'll find it inside the Fast Track Project Toolkit. This unique, informative online course gives you everything you need to become a project leader and fast tracking expert. Here's what you'll learn:
What is the difference between risk acceptance and risk avoidance?Avoid the risk (exit activities that bring it on or turn over to a third party) Reduce the risk (take steps to reduce the likelihood of a negative event occurring) Accept the risk (live with the risk, acknowledging that if the threat occurs the organization will have to bear the consequences)
What is avoiding the risk?Risk avoidance means you're trying to avoid compromising events as a way to eliminate liability exposures. Risk reduction is a way to help you control the damages to your business, like claims or losses.
What does accepting the risk means?What Does Accepting Risk Mean? Accepting risk, or risk acceptance, occurs when a business or individual acknowledges that the potential loss from a risk is not great enough to warrant spending money to avoid it.
What is the difference in acceptance and mitigation in risk management?Mitigate the risk (reduce the likelihood or impact of risk) Transfer the risk (assign or move the risk to a third-party via Cyber Liability Insurance) Accept the risk (acknowledge the risk and choose not to resolve, transfer or mitigate)
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