Which process best describes the act of managing risks rather than avoiding them entirely?

The act of managing risks rather than avoiding them entirely is best described by risk reduction. Risk reduction involves implementing measures that decrease the likelihood of a risk event occurring or minimizing the impact of a risk if it does happen. This proactive approach allows individuals and organizations to face risks head-on rather than trying to eliminate them completely.

For instance, organizations may invest in safety training, improve infrastructure, or adopt new technologies to mitigate risks associated with their operations. By focusing on risk reduction, they can continue their activities while lessening the severity of potential negative outcomes.

In contrast, risk shifting involves transferring the financial consequences of a risk to another party, often seen in insurance contracts. Risk retention means accepting the risk and budgeting for the potential losses that could occur. Risk transfer, on the other hand, involves shifting the responsibility for the risk to another entity, which keeps the risk from affecting the primary party but doesn’t necessarily reduce or manage it directly. Therefore, risk reduction is the most appropriate description of actively managing risks rather than avoiding them.