Which method is least likely to allow an organization to manage risks effectively?

Risk transference involves shifting the financial responsibility of a risk to another party, such as through insurance or outsourcing. While it can be a valuable strategy for managing certain risks, it does not eliminate the risk itself; it simply transfers the burden elsewhere. For instance, if a company purchases insurance to cover potential data breaches, it still must ensure that proper security measures are in place, as they remain responsible for protecting their data until an incident occurs.

In contrast, risk mitigation involves implementing measures to reduce the likelihood or impact of a risk, which directly contributes to more effective risk management. Risk acceptance is selecting to tolerate a risk after evaluating its potential impact and likelihood, allowing organizations to allocate resources to areas of greater concern. Risk avoidance is the most proactive approach, where organizations prevent risks from occurring by changing plans or processes.

Therefore, while risk transference can provide a financial buffer, it doesn't actively manage or reduce the underlying risks, making it the least effective method in terms of effective risk management.