A company planning to minimize the impact of risk is engaging in what strategy?

Risk mitigation is a proactive strategy focused on reducing the severity of a risk's impact or the likelihood of its occurrence. This is achieved by implementing controls, developing contingency plans, or redesigning processes. The key objective is to lessen the potential negative consequences of a risk event, which directly corresponds to the goal of "minimizing the impact." Unlike avoidance, it does not seek to eliminate the risk-associated activity entirely.

A. Risk acceptance: This strategy involves acknowledging the risk and its potential impact without taking any action to reduce it.
B. Risk avoidance: This involves deciding not to engage in the activity that creates the risk, thereby eliminating the risk altogether, not just minimizing its impact.
C. Risk transfer: This strategy shifts the financial consequences of a risk to a third party (e.g., through insurance), but it doesn't necessarily reduce the operational impact.

1. Manuj, I., & Mentzer, J. T. (2008). Global supply chain risk management strategies. International Journal of Physical Distribution & Logistics Management, 38(3), 192-223. https://doi.org/10.1108/09600030810866986. This paper categorizes and defines risk management strategies, including mitigation.

2. Chopra, S., & Sodhi, M. S. (2004). Managing Risk to Avoid Supply-Chain Breakdown. MIT Sloan Management Review, 46(1), 53-61. The article details various risk mitigation strategies, such as holding inventory and using multiple suppliers.