| Risk management has become an integral part of any | | | | and methods to calculate risk differ from domain to |
| business model as the organizations are going global | | | | domain. The definition of risk could be different for |
| and the market situations are increasingly becoming | | | | security and different for an engineering project. It |
| more dynamic. As per the ISO 31000 definition, risk is | | | | also differs for different sectors. There are different |
| 'the effect of uncertainty on objectives'. This 'effect' | | | | standards established for financial portfolios, public |
| can either be positive or negative. Therefore, risk | | | | health and safety, project management etc. |
| management can be defined as the process of | | | | There are many strategies to manage risks which |
| identification, then assessment, and thereafter, the | | | | may differ from industry to industry. The different |
| prioritization of various risks and minimizing, | | | | strategies include transferring the risk to another |
| monitoring, and taking control of the probability and | | | | company, avoiding anticipated risks, implementing |
| impact of such unfortunate events by coordinated | | | | plans to reduce the negative impact which may be |
| application of all the resources, in order to maximize | | | | caused due to the risk, and finally accepting either |
| the gains from possible opportunities. Risks can arise | | | | some or all the consequences arising out of the risk. |
| from uncertainties which exist in financial markets, | | | | Although there are some brilliant standards |
| legal liabilities, project failures, credit risk, natural | | | | established for risk management that have increased |
| accidents, and disasters and even from deliberate | | | | the confidence and stability in the estimates and |
| attacks. | | | | decisions taken to combat risks, some of these are |
| There are many standards being developed for risk | | | | criticized for not being able to show any |
| management by the Project Management Institute, | | | | improvement in either reducing such risks or in |
| National Institute of Science and Technology, ISO | | | | preventing them from emerging in the first place. |
| standards, and the actuarial societies. The definitions | | | | |