Risk Management Strategies: Avoidance, Reduction, Sharing, and Retention - Systematic Literature Review

I Kadek Julianaya

The Journal of Financial, Accounting and Economics
Vol. 3 No. 1 (2026)

The increasingly complex, dynamic, and uncertain organizational environment demands that organizations develop risk management strategies that are not only oriented towards reducing losses but also support resilience, sustainability, and value creation. The four main risk management strategies—avoidance, reduction, sharing/transfer, and retention—have different characteristics and consequences and can be used individually or in combination according to the risk characteristics and capacity of the organization. This study aims to map the development of research on these four strategies, identify the context and factors that influence their selection, analyze the relationships and combinations between strategies, and identify remaining research gaps. The study used the Systematic Literature Review (SLR) method with a literature search and selection process that refers to the PRISMA 2020 principles. The literature was searched through several academic databases using a combination of keywords related to risk management strategies, enterprise risk management, and the organizational risk context. Of the 256 identified publications, after going through the screening and eligibility assessment stages, 15 publications were obtained that met the criteria for qualitative analysis. The synthesis results show that avoidance is primarily relevant for extreme risks and risks beyond tolerance limits, reduction is the most widely implemented strategy through strengthening internal controls and capacity, sharing/transfer is increasingly developed through collaboration, insurance, reinsurance, and alternative risk transfer mechanisms, while retention is developing as a strategic decision to bear risks that are still within the organization's capacity. The findings also show that these strategies are not mutually exclusive, but form a portfolio of risk responses influenced by risk characteristics, organizational capacity, information quality, technology, governance, risk culture, and the external environment. The research identifies the need for an integrative conceptual model, longitudinal and mixed methods studies, broadening the cross-sector context, and developing risk effectiveness measurements that include financial, resilience, sustainability, and social dimensions. This research contributes by strengthening the perspective that modern risk management is an integrative, adaptive, and contextual system in supporting organizational sustainability.