Which risk mitigation strategy involves an organization absorbing minor risks while preparing to respond to major ones?

The strategy of absorbing minor risks while preparing to respond to major ones is referred to as risk assumption. This approach entails acknowledging certain risks that an organization deems acceptable to take on, often considering them minor enough not to warrant specific controls or mitigations. Instead, the organization focuses its resources and attention on developing effective response plans for more significant risks that could cause serious harm or disruption.

In practice, by assuming minor risks, an organization can streamline its operations without being overly cautious, allowing for more agility in decision-making. This approach also emphasizes preparedness, as it ensures that while minor risks are managed passively, robust strategies are in place to tackle any major threats effectively.

Risk avoidance, on the other hand, involves eliminating the risk entirely, which may not always be feasible. Risk limitation is about reducing the impact or probability of a risk through specific controls. Risk planning refers to the overall process of identifying and preparing for potential risks rather than specifically focusing on the acceptance of certain risks. All of these strategies differ significantly in their applications and implications compared to risk assumption.