Different Risk Management Methods and Their Application

This article discusses different risk management methods such as avoidance, transference, mitigation, and acceptance and their application in project management. It explains how risk avoidance can be used to eliminate threats and hazards, how transference can be used to outsource risks to a third party, how mitigation can be used to reduce the possibility of risks, and how acceptance can be used to retain risks. The article also provides examples of each method and their benefits.

1. Risk method Applied
Avoidance which is the process where we eliminate the threats and Hazards, which are activities
taking place that may lead to the impact that is negative on the project (Target, 2017). In the
above scenario, this is a case of risk avoidance. The challenge is that the stated plan has less
knowledge of Windows OS and with the use of risk avoidance by the team we can eliminate all
risks generated when developing the application.
2. The Risk Method to be Applied when it is difficult for a company to handle such
sections
Transference. This is the policy where the team has to transfers the anticipated risk to a 3rd
party. By this, we mean that the risk is outsourced where the team members will get another
company with the expected experience and knowledge in that area where they will implement all
the uncertainties about the project. Applying the above, we can perform even the hardest section
of the manager of the project (Project Manager) where we pay someone and then do the transfer
of the responsibilities.
3. Application of Mitigation
Mitigation. This will apply in where the Human Resource Department will have to hire a
specialist with the library subroutine knowledge. This will be a step towards the reductions of
possibilities of any occurrence or the impacts of the risks identified and related to the areas
mentioned. In this case, since Transference explains involving a third party who should be from
external and who is entitled to take a risk on their behalf and transfer all the responsibility to the
chosen 3rd party. The idea behind this is that we are not hiring anyone to mitigate any
uncertainty in the strategy of transference.
4. Difference between Avoidance and Acceptance
Avoidance is the concept where we change the project plan in that we avoid threats that may
negatively impact the project. In the avoidance strategy, we can say that the organization is not
indeed performing the activity with which the risk may occur. A good example is work being
stopped by a construction company due to severe rain weather for avoiding the risks where
someone might get hurt is one of the best suits for the strategy of avoidance.
When we retain the risk due to the low degree in its occurrence or being an expensive deal, we
can term this as acceptance. The team must decide that they will take no action unless the risk
occurs (Management, 2014). A good example is whereby a water park will accept the risk that
most of their income is mostly dependent on the summer weather. However, they may spend low
and hence build cash reserves for off-peak seasons.
References
Management, B., 2014. Ways to Manage Risk. [Online] Available at:
http://www.dbpmanagement.com/15/5-ways-to-manage-risk

[Accessed 13 September 2017].
Target, T., 2017. Risk Avoidance. [Online] Available at:
http://searchcompliance.techtarget.com/definition/risk-avoidance
[Accessed 2018].
Litten, D n.d., Plan Risk responses process, viewed 13 September 2017, http:www.pm-
primer.com/plan-risk-responses-process/