Deciding not to enter a new market is risk avoidance because the organization eliminates the exposure by choosing not to undertake the activity that would create the risk. Risk avoidance is appropriate when management determines that the potential adverse consequences of an activity exceed the expected benefits or fall outside the organization’s risk appetite. Risk sharing would involve transferring or allocating part of the exposure to another party, such as through insurance, contracts, or partnerships. Risk acceptance means knowingly retaining the exposure without further treatment, while risk reduction involves implementing controls or other measures to lower likelihood or impact. Because the multinational organization removes the exposure entirely by declining to make the investment, rather than continuing the activity with controls or transferring the exposure, its response is clearly risk avoidance.