What is risk mitigation?

Answer 1

Risk mitigation entails the procedure of envisioning the threats that can be inflicted on the body of an organization and taking measures to reduce them. It is one of the most significant parts of risk management, which is needed to preserve assets, guarantee business survival, and provide a source of beneficial decision-making.

The aim of risk mitigation is not always to remove the risk by all means; however, it is always possible, and the it is to minimize the negative outcome of the risk. This can be a combination of several aspects, including the removal of that risk altogether, reducing the chances of it happening, transferring it to a different party (depending on whether the company purchased insurance or not), and the response and recovery plans.

By taking the example of cybersecurity, the risk mitigation would include the extension of a firewall, training, or data encryption, which would reduce the risk of information being breached. In project management, it could imply the preparation of contingency plans, which should occur in the event of delay or any other resource deficiency.

Key Aspects of Risk Mitigation

Identification of Risks: Review internal and external risk exposure that could happen to your business.

Assess Impact: Estimate the possibility and the potential harm of every risk.

Select Mitigation Strategies:

Avoidance: Eliminate the risk-producing activity.

Reduction: Implement some steps that can reduce the likelihood of the outcome.

Transfer: Sell the risk to another party (e.g., use of insurance).

Acceptance: Be aware of the risk and be prepared to fix the risk in case it occurs.

An effective plan to mitigate risks ought to begin by conducting a good risk assessment, after which the risks ought to be ranked based on the potential effects. Having identified them, the organizations are then able to establish and outline the mitigation action, which they can check on in the long term.

Lastly, risk mitigation helps the organization become more assured when entering the unknown waters, hence they become more resilient and capable of reacting to surprises.

Answer 2

Mitigating Risks is a strategy that we would use when it is not possible to avoid a risk.

Definition: Mitigation is a strategy by which – We reduce the Probability and/or Impact of a risk to an acceptable level.

The whole idea about this Risk Mitigation strategy is to be proactive and dealing with a risk before it actually occurs. This would be much cheaper and cost effective than handling the risk once it occurs. Remember the age old saying “Prevention is better than cure”. Though we aren’t preventing or eliminating the risk altogether, we are at least preparing ourselves to handle it in the best way possible instead of just reacting once the risk event actually occurs.

Answer 3

A think a mitigated risk is a diminished risk. This means the risk had been reduced.