Which of the following best describes this risk management technique?

Management assessed the organization’s risk of expanding operations into a new, but volatile, region and began looking for a compatible local partner to manage sales and distribution.

Which of the following best describes this risk management technique?
A . Avoidance.
B . Acceptance.
C . Reduction.
D . Sharing

View Answer

Answer: D

Explanation:

The risk management technique described by finding a local partner to manage sales and distribution in a new, volatile region is best characterized as "Sharing." This approach involves sharing the risk with another party that can better manage or absorb part of the risk, thus reducing the organization’s direct exposure to potential adverse outcomes.

Reference: Risk management literature and practices, including frameworks such as ISO 31000.