Which method of handling risk involves planning for the consequences?

The method of handling risk that involves planning for the consequences is to assume the risk. When an organization chooses to assume a risk, it acknowledges the potential adverse effects but decides to proceed with the activity anyway, often because the benefits outweigh the potential downsides. This approach requires the establishment of contingency plans or mitigation strategies to address any issues that may arise as a result of that risk.

Assuming a risk implies a proactive stance where one prepares for potential challenges without eliminating the risk itself. This can be particularly relevant in environments where some level of risk is unavoidable and accepted as part of the operational strategy. By having well-thought-out responses to possible consequences, teams can effectively manage the outcomes if and when they occur.

In contrast, other methods such as avoiding, controlling, or transferring risk entail taking different approaches—whether by eliminating risks altogether, implementing measures to reduce their impact, or transferring the responsibility of risk to another party. Each of these methods reflects a different risk management philosophy, but assuming risk specifically highlights the planning for consequences as part of decision-making and strategy formulation.