What is the Risk Strategy that involves stopping risky business practices?

The strategy of stopping risky business practices is best described by risk avoidance. This approach involves eliminating any activities or conditions that could lead to potential risks. When an organization adopts risk avoidance, it makes deliberate decisions to steer clear of specific actions or processes that may expose it to danger or loss.

For example, if a company identifies that entering a new market poses significant risks of financial loss or reputational damage, it might choose not to enter that market at all. By making this choice, the organization effectively avoids any risks that could arise from that market entry.

In contrast, risk reduction focuses on minimizing the impact or likelihood of risks rather than eliminating them completely. Risk transfer involves shifting the responsibility of a risk to another party, such as through insurance. Risk mitigation includes implementing measures to reduce the severity of potential negative outcomes but still allows for the possibility of the risk occurring. These distinctions clarify why stopping risky business practices aligns closely with the concept of risk avoidance.