How do risk avoidance and risk mitigation differ?

Risk avoidance and risk mitigation are two fundamental strategies in risk management, and they differ significantly in their approach to handling potential risks.

Risk avoidance is the strategy employed to completely eliminate the risk from a project or situation. This might involve changing the project plan to sidestep potential risks altogether. For example, if a particular activity is deemed too risky, an organization may choose not to engage in that activity at all. This means that the risk is effectively removed from the equation.

On the other hand, risk mitigation is focused on reducing the impact or likelihood of a risk occurring. Rather than eliminating the risk entirely, mitigation involves taking steps to minimize its potential effects. This could include implementing safety measures, allocating additional resources, or developing contingency plans. By doing so, even if the risk does occur, its impact on the project or organization can be less severe.

Given this distinction, the statement that risk avoidance eliminates the risk while mitigation reduces its impact or likelihood accurately captures the essence of how these two strategies are defined and utilized in risk management.