The Five Primary Risk Management Strategies
##Five Risk Management Strategies
There are five generally accepted options you can choose to address a risk once it has been identified. I found a great and thorough yet simple write-up on Investopedia which I used as a source (sources listed below) in case you want to read the whole article but they break it down like this:
Avoidance - this is when you don’t participate in the risk that has been addressed. A good example might be avoiding using illegal filesharing software to obtain unlicensed content which would allow you to avoid legal complications as well as malware and other risks found in filesharing activities.
Retention - this is when you identify risk and accept it as a natural part of your situation. Maybe you have to allow port 21 on your organization’s firewall because you’re running an FTP server. Blocking it could improve security, but your business requires the use of FTP.
Sharing - this one is simply sharing the risk among multiple parties. By distributing the risk among different parties or institutions, you’re essentially lowering the impact should a risk come to fruition.
Transference - we talked about this one during the quiz today! This can typically be used to describe any type of insurance usage or purchase. By enrolling in insurance, the insurance provider takes on the financial risk should an adverse event take place.
Loss Prevention and Reduction - this type of risk management option is simply described as just trying to reduce or prevent the risk you’ve identified. One example of this could be the detection of malware within your environment and the efforts and actions you take to contain the infection before it spreads to other areas of your organization’s network. (Yu, 2018)
Yu, J. (2018, October 16). 5 Basic Methods for Risk Management. Investopedia. https://www.investopedia.com/articles/investing-strategy/082816/methods-handling-risk-quick-guide.asp#:~:text=5 Basic Methods for Risk Management 1 Avoidance.,Transferring. . . .%205%20Loss%20Prevention%20and%20Reduction.%20
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