Can anyone tell me the difference between the risk elimination and risk substitution..

For example: if we remove the source of risk introduce new thing which has less or no risk as previous then what would we say?is it elimination or is it substitution?

pls explain with practical examples

Thanks & Regards,

Annus

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  • Dear All

    Thank you so much for your time and valuable comments:


    Can you pls expalin
    1- Safety statistics
    2- Safety planning control

    Looking forward for early and detailed response

    Thanks & Regards,

    Annus



  • Brilliant explanation, thanks.
  • thanks for your explanation !
  • Hi Dimitar,

     

    I agree with You if the objective of process is for example  that payment is delayed just one month ; but if objective is   for example collection of receivables, then blocking users who didn't pay last bill is not elimination because we already have one outstanding bill; in that case elimination is contracting prepaid as payment method.

     

    Happy New Year!

    Marcel Medina said:

    I guess elimination is in case you do not serve that think which implies risk, while substitution means that, as in your example, introduce new or different thing.

     

    elimination: users who didn't pay last bill. You can block them.

    substitution: users who didn't pay last bill. You can offer them another payment method (prepaid, for example)

     

    I hope this is helpful for you.

  • I guess elimination is in case you do not serve that think which implies risk, while substitution means that, as in your example, introduce new or different thing.

     

    elimination: users who didn't pay last bill. You can block them.

    substitution: users who didn't pay last bill. You can offer them another payment method (prepaid, for example)

     

    I hope this is helpful for you.

  • I think that we firstly have to see our process and objective of our process; Then we need to indentificate risks, assess risk and mitigate in order to achieve the objective of our process. If we remove source of one type of risk we need to assess how that removing affect achieving our objective and if that eliminating risks regarding our objective, i think that is then elimination. But, if that removing the source of risk causes a new type of risk regarding our objective, than we talk about substitution.

    Thanks

  • Risk responses:

    • Avoid
    • Share
    • Accept
    • Mitigate

    Risk is not eliminated. Mitigate or avoided is possibly what you are looking for.

    Risk substitution may be seen as a form of mitigation.

     

    Risk avoidance: do not enter a new market segment

    Risk mitigation: implement security cameras

    Risk Sharing: taking insurances



  • mohamed badr said:
    Hi Dimitar ,
    the method of risk treatment either risk elimination or risk subsititution or what ever the method, is a matter of cost benefit analysis, which result in a decission of what is the cost of that risk control, then you can decide which method of risk control is better to do.
    regards
    Hi Mohamed,
    yes, this is the point, but not only one. Because the cost of the method or of the risk is just one of the parameters of the assessment, you know. My point is that it is one of the main parameters and some times the important one. But in some cases the cost is not the determination factor for taking decision.  
    Regards
  • Hi Dimitar ,
    the method of risk treatment either risk elimination or risk subsititution or what ever the method, is a matter of cost benefit analysis, which result in a decission of what is the cost of that risk control, then you can decide which method of risk control is better to do.
    regards
  • The question is determined by your focus either on the institution "eliminating" or "substitututing" the risk. For the institution, it may view it as eliminating the risk, but it may really only be substituting it. Without adequately evealuating the players involved and the method of elimination (i.e., insurance), the institution may think its eliminating the risk when, in fact, its just a substitution. Just as important, the substitution may be as risky as the original risk.

     

    On a more global/market basis, its not elimination. It's substitution. The bump on the balloon has just been moved around at best. In fact, as we have seen in the last few years, someone was actually making the risk balloon bigger, but no one noticed (or didn't want to notice).

     

    Roy Jensen

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