Final answer:
Risk avoidance involves identifying a risk and deciding to discontinue engaging in the action. It is a proactive approach to risk management.
Step-by-step explanation:
The strategy that involves identifying a risk and making the decision to discontinue engaging in the action is Risk avoidance. It is a proactive approach to risk management where an organization chooses to avoid or eliminate activities that pose significant risks.
For example, if a company identifies that a certain product line is not profitable and carries a high risk of failure, they may decide to discontinue producing and selling that product. By avoiding the risk, the company can minimize potential losses.
Risk avoidance is different from risk acceptance where an organization acknowledges the risk but decides to proceed anyway, and risk mitigation where measures are taken to reduce the impact of the risk without completely eliminating it.