What strategy involves managing risk associated with an activity without completely accepting all risks?

The strategy of managing risk associated with an activity without completely accepting all risks is best described as risk transference. This approach involves shifting the responsibility for managing a particular risk to another party, such as through insurance, outsourcing, or contractual agreements. By transferring risk, an organization can mitigate the potential impact of adverse events while still engaging in the activity that exposes them to those risks.

In practical terms, risk transference allows a business to maintain its operations without bearing the full brunt of potential negative outcomes. For example, a company might hire an external vendor to handle specific operations, therefore transferring the risk associated with those operations. This strategy ensures that while some level of risk remains, it is not entirely retained by the organization.

This contrasts with the other strategies mentioned. Risk acceptance would involve acknowledging the existence of risks without taking steps to mitigate them, while risk reduction focuses on implementing measures to minimize the potential impact or likelihood of risks. Risk avoidance, on the other hand, means eliminating the activity that exposes the organization to risk altogether. Each of these strategies deals with risk in different ways, but risk transference specifically emphasizes sharing or shifting that risk, making it the most accurate answer in this context.