Risk avoidance is a type of risk response that involves eliminating the risk entirely by not engaging in the activity that causes the risk or changing the conditions that create the risk1. Riskavoidance is usually applied when the potential impact or likelihood of the risk is high or unacceptable, and when the benefits of avoiding the risk outweigh the costs or losses of doing so2.
In this case, the organization has adopted risk avoidance as its risk response, because it has decided to postpone the decision that could trigger the risk. By delaying the decision, the organization is avoiding therisk of making a wrong or unfavorable choice among the multiple options. However, this may not be the best or most effective risk response, as it could also result in missed opportunities, wasted resources, or increased uncertainty3. The organization shouldconsider the trade-offs and consequences of avoiding the risk, and explore other possible risk responses that could reduce or transfer the risk.
The other options are not the risk responses that the organization has adopted. Risk transfer means shifting the responsibility or burden of the risk to another party, such as a vendor or an insurer2. The organization has not transferred the risk to anyone else, but rather avoided it by postponing the decision. Risk mitigation means implementing controls or safeguards to minimize the negative effects of the risk2. The organization has not mitigated the risk by reducing its impact or likelihood, but rather avoided it by delaying the decision. Risk acceptance means acknowledging the risk and its consequences without taking any action to address it2. The organization has not accepted the risk by tolerating its potential outcomes, but rather avoided it by postponing the decision. References =
10 Risk Mitigation techniques you need to know - Stakeholdermap.com
Risk Response Strategies: Types & Examples (+ Free Template)
[CRISC Review Manual, 7th Edition]
