Which RM principle focuses on balancing risk with benefits?

• A. Accept no unnecessary risk
• B. Make risk decisions at the appropriate level
• C. Accept risk when benefits outweigh the costs
• D. Integrate RM into operations and planning at all levels

Answer: (C)

Balancing risk with benefits is the idea behind this RM principle. It allows you to proceed with a course of action when the expected advantages justify the exposure to risk and the costs to mitigate or accept that risk are reasonable. In practice, you assess what you stand to gain from a mission or task and compare it to what could be lost or spent to manage the risk. If the benefits outweigh the costs, accepting the risk is appropriate; if not, you mitigate, transfer, or avoid it.

This differs from accepting no unnecessary risk, which aims to minimize risk overall; or making risk decisions at the appropriate level, which focuses on who has authority to accept risk; or integrating RM into operations at all levels, which emphasizes embedding RM processes into planning. The key concept here is the cost-benefit balance that justifies taking on risk.