Which risk management strategy involves choosing a less risky alternative?

The strategy that involves choosing a less risky alternative is risk avoidance. This approach means taking steps to eliminate, escape, or reduce exposure to the risks associated with a certain action or decision. By opting for a less risky alternative, organizations can minimize potential negative consequences.

For example, if a company is considering launching a new product that has uncertain market demand, it might choose not to proceed with the launch (risk avoidance) and instead focus on improving an existing product that has a proven track record. This decision allows the company to bypass the risks associated with the uncertain new product launch.

In contrast, risk acceptance involves acknowledging the risk and deciding to proceed without taking any specific action to mitigate it, risk mitigation entails implementing measures to reduce the severity or likelihood of the risk, and risk transference involves shifting the risk to a third party, such as through insurance or outsourcing. These strategies do not inherently focus on choosing a less risky alternative as risk avoidance does.