Best tips for risk management


Risk Management

Every business carries an element of risk.income. This helps promote growth through
Therefore, managing risks is crucial processprofit, continuous operation and stable
in many organizations. Depending on theearnings.The function of risk management is
business, steps can be taken to reduce theto organize and carry out a plan to control
frequency and intensity of risk. Riskor reduce the risks to which a firm is
management is a process or group in anexposed. This planning involves a five-step
organization that takes management action toprocess. The first step is to identify
reduce risk. This activity involves thepotential risks. The method of identifying
process of measuring and developingrisks may depend on the organizational
strategies to manage the risk. The strategiesculture, industry practice and compliance.
employed include transferring the risk toOnce risks have been identified, the next
another party, avoiding the risk, reducingstep is to assess the potential severity of
the negative effect of risk, and acceptingloss and probability of occurrence. The third
some or all of the consequences of astep is to find a potential treatment for the
particular risk.There are two kinds of riskproblem. This may involve the transfer,
management. Traditional risk management isavoidance, reduction or retention of a
focused on risks stemming from physical andpotential risk. Next is to implement the plan
legal causes like natural disasters,by choosing the right method of treatment.
accidents, death or lawsuits. Financial riskPrior to implementation, a review and
management focuses on risks that can beevaluation of the plan is necessary.Initial
managed by using traded financialrisk management plans are never perfect.
instruments. Large corporations employ riskPractice, experience and actual results, will
management teams while smaller corporationsnecessitate changes in the plan. Therefore,
practice informal, if not formal, riskthe plan should make room for flexibility in
management techniques that are rolled intodecision making. Risk management is
the responsibilities of operational managers.considered an art in management circles and
Risk managers recognize and review theirexperience and exposure to situations helps
organizations loss exposures includingmastering this art.
property, liability, personnel and net



1 A B C D 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112