Fundamental Risk Management Strategies: Analysis and Comparison

This report provides a comprehensive analysis and comparison of fundamental risk management strategies. It categorizes risk management into positive and negative approaches, detailing strategies for each. Positive risk strategies, such as exploitation, sharing, improvement, and acceptance, are explained with examples of how they can be applied. Negative risk strategies, including avoidance, transfer, mitigation, and acceptance, are also thoroughly examined, outlining their processes and applications. The report also covers contingent risk response strategies, which are implemented based on specific event occurrences. By examining these strategies, the report aims to offer a clear understanding of how to effectively manage risks in project management contexts and other business settings, offering a balanced perspective on proactive and reactive risk handling.

Running head: SAFETY AND RISK MANAGEMENT
Safety and Risk Management
Name of the Student
Name of the University
Author’s Note

1SAFETY AND RISK MANAGEMENT
Analyze, compare and contrast the fundamental risk management strategies
A risk can be a danger, that is a risk that has the negative effect on the project goals, or
this may be the opportunity, that is a risk that has the positive impact on the project goals, and
so various approaches are there to tackle positive and negative risks when this comes to
the project management.
Positive Risk Management Strategies
Exploitation
Exploitation increases the probability of the positive risk happening which leads to
the opportunity (Bromiley et al. 2015). The project manager should have provided sufficient and
productive resources for taking advantage of the chance. This method reduces the ambiguity that
the positive risk entails by ensuring this happens.
Sharing
When the project team itself is not completely prepared to take advantage of the
opportunity in which they might be bringing on another organization to collaborate. Another
company's experience is leverage to optimize the profit out of chance. Definitions of
collaboration opportunities involve the creation of alliances for risk collaboration, teams, single
purpose corporations or joint ventures. In this both parties are benefiting according to their
commitment and practice.
Improvement

2SAFETY AND RISK MANAGEMENT
Change includes increasing the possibility of the risk occurrence and extending its effects
(Sadgrove 2016). This is achieved by recognizing the various risk factors and their impact.
Definitions of maximizing a chance include adding additional money to project tasks to achieve
it faster.
Acceptance
It means taking advantage of the optimistic danger as it occurs but not fighting it
aggressively. It is just like a chance to come and be welcomed without much preplanning.
Negative Risk Management Strategies
Avoidance
Avoidance of the risks reduces the risk by eliminating the trigger. It can lead to otherwise
neither doing the activity nor doing the operation (Pritchard. and PMP 2014). The project
manager can even change the target in difficulty, or isolate it. An early collection of information,
better coordination between stakeholders or the use of experience may prevent some risks.
Transfer
In the approach of risk transfer the risk is transferred to the third party. The third party,
such as the vendor, is paid for accepting or manages the risk on behalf and therefore the
ownership, and the risk impact, is completely ruled by the third party. Contracts are agreed to
pass over the responsibility to third parties.
Mitigation

3SAFETY AND RISK MANAGEMENT
Mitigation decreases the probability of the risk happening, or minimizes the risk effect
within reasonable limits (Pritchard and PMP 2014). This strategy is based on the underlying idea
that the steps taken earlier to minimize the possibility or impact of the danger are more
successful than making changes to repair the harm after the danger occurs.
Acceptance
Acceptance means embracing the risk, in particular when there is no other acceptable
solution available to mitigate the risk. Acceptance may be either passive or aggressive
acceptance.
Contingent Risk Response Strategies
Such techniques are inferred only on occurrence of such events. Implementation of these
techniques only occurs under such predetermined conditions. (Drennan, McConnell and Stark
2014) Before implementing those strategies, the team is waiting for adequate warning signals.
Such signs may be missing the achievements of job items or milestones etc. Such measures
include the use of staffing reallocations, financial reserves and the introduction of workarounds
to mitigate the loss, fix the harm as much as possible, and avoid recurrence.

4SAFETY AND RISK MANAGEMENT
References
Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk management:
Review, critique, and research directions. Long range planning, 48(4), pp.265-276.
Drennan, L.T., McConnell, A. and Stark, A., 2014. Risk and crisis management in the public
sector. Routledge.
Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance. CRC Press.
Sadgrove, K., 2016. The complete guide to business risk management. Routledge.