Page 159 - RISK Management IC 86

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reducing the potential impact of those risks to which an
individual or organization is exposed, either by reducing
their financial consequences, successful risk results in
the total elimination of exposure to loss due to a specific
risk.

However, it is also the method of most limited practical
application because it often involves abandoning some
activity and so losing the benefits that accompany it.

Ways of avoiding risks by effecting changes in nature of
an organisation's activities,
(a) changing production processes or products, and
(b) the location of operations.

The nature of the required changes may range from a
relatively small change in the method operations or to a
fundamental change in the organization's activities. An
example of former is replacing an explosive ingredient
with an inert substance. An example of latter is withdrawal
from a certain market altogether.

Since risk avoidance involves abandoning some activity,
or performing tasks in a different way, the risk avoidance

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