International risk management Assignment Example | Topics and Well Written Essays - 1250 words

International risk management - Assignment Example The paper looks at these strategies together with a contingency plan for the product we seek to develop. This strategy seeks to completely eliminate the risk of a project to level 0. With this strategy minimum allowable risk is zero (Darity, 2008). In other words risk avoidance will imply that the developers avoid undertaking the project if it has been identified to have a component of risk in it. The strategy is rarely used in risk mitigation because almost all projects to be undertaken have a risk component in them. If the strategy is employed to mitigate risk in the product, the developers will have to avoid the development of the product since it has inherent risks. Some of the inherent risks include; the power failure on the leds, the small switches failing to work, risk that the product wouldn’t gain market approval among other risks. Thus since the developers aim to go ahead with the entire project cycle, this mitigation strategy wouldn’t be advisable. Risk sharing as another mitigation strategy used as a suitable way of reducing the possible negative outcome inherent to developing a product. It is one of the most common strategies employed in risk management. Risk sharing according to Bolton and Harris (2010), is defined as a risk management strategy which aims at reducing risk exposure by ensuring that the risk component in a project is first identified. After identification, the burden of possible loss is spread among several entities, units of enterprises or other partners critical to the particular project development. This risk management method is also called risk retention. The technique is a way of self-insuring the risks taking into consideration a multiplicity of entities. In developing the product that seeks to increase the safety of those riding bikes in the urban areas either at night or in the early morning hours, risk sharing as a method of mitigating risk suggests the need to look for other entities that might be interested in