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4 Effective Strategies for Risk Mitigation

4 Risk Management Strategies

Successful organizations effectively limit risks; ignoring or avoiding risk is not an option. These organizations analyze and evaluate various uncertainties that impact their business processes to develop risk management strategies. Effective risk mitigation is an ongoing process and requires frequent assessment. It helps businesses to embark on new opportunities and expand their processes further. Risk mitigation is essential for every successful organization that aims to sustain its growth.

What is Risk Mitigation?

Risk mitigation is the process of limiting the effect of uncertainties by identifying, analyzing, evaluating, and treating them. These uncertainties can have a positive or negative impact on the business. Thus, it is crucial to recognize them in advance to promote positive risks and reduce the impact of negative risks. Through risk mitigation, organizations aim to eliminate or minimize the risk’s impact levels. This ensures that the business operations can continue as usual despite the risk.

Four Risk Management Strategies

Usually, organizations identify and categorize risks using a risk matrix. These risk matrices vary depending on the nature or domain of the organizations. When the organization has identified the potential risks that may affect the business process, they are categorized and given a score based on their likelihood of occurrence and level of impact. This step helps businesses to identify which risks they need to tackle first and design their risk management strategies accordingly.

The four common risk management strategies are as follows:

Risk Avoidance

The risk avoidance strategy of an organization is created to avoid the occurrence of the risk. This requires considerable planning and organizational resource allocation to avoid the risk occurrence. Most organizations use this risk management strategy with sufficient budget and resources.

Risk Reduction

This risk management strategy aims to reduce potential risks’ impact levels. After a business has identified the risk that will negatively affect the entire operations, they use its resources to limit the likelihood of the risk from occurring or reduce the impact.

Risk Transference

The risk transference strategy is used by organizations when they transfer their risk mitigation process to a third party, like an insurance company or a contractual agreement with suppliers, vendors, contractors, business partners, etc. Thus, the identified risk is transferred to the third party, who is responsible for mitigating the risk according to the prior agreement.

Risk Acceptance

Some risks prove beneficial in the long run or have a higher chance of giving a positive result later. An organization’s risk acceptance strategy reflects its acceptance of these low-level risks. These risks are monitored regularly to observe their impact level.

Which Risk Management Strategy is the best?

An organization’s risk mitigation process should be practical and achievable. Identifying and categorizing potential risks is the first step toward effective risk mitigation. Understanding the likelihood of risk occurrence and analyzing the impact level helps the organization develop its risk management plan. Ideally, organizations should use a combination of all four risk mitigation strategies for maximum benefit.


Our RSA Archer GRC Consulting Services‘ expert advisors and consultants help organizations identify and evaluate risks to create the best risk management strategy. With their valuable inputs, businesses can mitigate potential risks and explore new opportunities for expansion and growth.