Which term describes steps taken to reduce the adverse effects of risks?

The term that describes steps taken to reduce the adverse effects of risks is risk mitigation. This involves identifying potential risks and implementing strategies to lessen their impact or likelihood of occurrence. Risk mitigation can include various approaches such as implementing control measures, developing contingency plans, and enhancing processes to minimize potential negative outcomes.

For example, in a project management context, a team might analyze risks associated with tight deadlines and then decide to allocate additional resources or adjust timelines to prevent delays. This proactive stance not only alleviates potential issues but also fosters a more resilient approach to managing uncertainties.

The other terms highlight different approaches to dealing with risk but do not specifically focus on reducing adverse effects. Risk appetite refers to the amount of risk an organization is willing to accept, risk avoidance involves eliminating the risk entirely, and risk transfer means shifting the risk to another party, such as through insurance. Each of these serves its purpose but does not directly address the systematic reduction of risk impacts in the way that risk mitigation does.