This chapter looks closer into risk treatment, and the following main steps (refer Figure 1.2):
Risk treatment is the process of selection and implementation of measures to modify risk, including measures to avoid, reduce, optimise and transfer risk (refer Section 1.2). How one chooses to treat risk will depend on which type of strategy the organisation has in place for the risk management.
In Section 3.1, we reviewed the most common ways of using the risk analysis in the decision-making process:
We compare alternatives by looking at the risk picture for the various alternatives. If the alternatives are about the same with respect to other concerns, such as costs, the risk analysis gives a good basis for recommending a particular alternative. Normally, we must, however, undertake a weighing between various concerns, and then the cost-effectiveness analysis and the cost-benefit analysis come into play. These analyses make it possible to compare the various concerns, such as risk and costs. These analyses do not, however, provide answers to what is the correct solution and the best alternative. As ...