What Is Risk Management - Introduction
If you wish to know what is risk management, then one should realize that risks are part of any project that is undertaken, whether commercial, voluntary or personal projects. Any new venture where investment is made and returns are expected, one will face risk. Thus, planning out risk management is important for any business. Again, the process of risk management should be such that it eliminates or reduces the risk of certain events from occurring or having an adverse impact on one's business. Every business sphere has associated risks and processes are designed to mitigate such risks accordingly.
What Is Risk Management – Definition
When one enquires what is risk management, it can be defined as a process of identifying the risks associated with one's business or venture as well as assessing the level of impact such risks can have. Once such assessment is done, one then prioritizes the risks and then works out monitoring strategies for the same. Usually a risk management team is put in place in an organization. Such a team is responsible to create plans that will minimize risks as well as eliminate any possible impact of negative events that can occur. There are a variety of strategies available which are employed as per the nature of risks identified and the nature of a business.
What Is Risk Management – Different Types Of Risks
When one is considering the topic of what is risk management, one needs to assess the different types of risks that are involved in different businesses or functions. There are common risks that can occur and affect any organization such as natural disasters like earthquakes, fraud, theft, flood and so forth. Again, there can be legal disputes that occur and bring along associated risks. Many other risks pertain to the nature of business that one has. Again, uncertainty of financial markets or failure of projects can bring along risks in businesses.
What Is Risk Management – Goals Of Risk Management
If you were to ask what is risk management, there are goals of each kind of risk management process. The main aim behind risk management is to protect a business and its assets as well as operations and finances from vulnerable factors. Risk management practices are usually taken up to protect the interests of employees as well as customers and the general public. These measures are undertaken to ensure that there are no adverse effects of the running of the business on others. Again, risk management practices need to be undertaken so that physical facilities, records, physical assets and data are protected of a company.
What Is Risk Management – Process Of Identifying And Managing Risks
When one is concerned about what is risk management, there are varied strategies that one can take up in order to mitigate or minimize risks. Usually a five step process is taken up in order to plan out risk management in a systematic manner. The plan is drawn up in accordance to the nature of business practices.