What principle of ORM emphasizes accepting risk when benefits outweigh the cost?

The principle of ORM, or Operational Risk Management, that emphasizes accepting risk when the benefits outweigh the cost is known as Risk Acceptance. This principle recognizes that in certain situations, taking a calculated risk can lead to positive outcomes that justify the potential downsides. It involves evaluating the benefits of an action against the risks it poses, and when the potential for gains surpasses the risks, acceptance of that risk is deemed appropriate.

This approach is critical in decision-making, particularly in operations where risks are inevitable but can lead to significant advantages. For instance, in a military context, a commander may choose to accept certain risks in a tactical operation if the expected benefits—such as strategic territorial gain or protecting resources—are considerable.

The focus on this principle encourages responsible leadership and thorough analysis, ensuring decisions are made thoughtfully with an understanding of both the potential rewards and dangers involved. This mindset fosters a culture of proactive risk management, as opposed to a purely risk-averse attitude.