The definition of risk management

Risk management is a practice that helps to identify risks, in order to minimize the EPRD. This is a logical method used to identify, analyze, fix and monitor permanently risks in an organization. Risk means anything that may hinder an organization of functioning and realization of his plans. It is anything that can cause harm to employees, clients or goods. Risk management is a process used in the private and public institutions in various fields of activity, finances, etc.

Risk management is a standardized process that consists of several steps. Initially, it begins by identifying the risks. The next step is to analyze and solve. The last step is continuous monitoring of risks in this organization.

The first step, identify the risks, should be considered in the context of business organization?s. Depending on the nature of the business, there are specific risks that may emerge. This is the reason why, when working to identify, professionals need to take into account the context of the cases where management processes occur. Probability and frequency of the appearance of risk must be evaluated. The impact on the Organization must also be determined.

The next step is analysis. This is also called risk assessment. Risks must be assessed from a qualitative and a quantitative point of view. Now that they have been identified, it must be determined that risk is more likely to occur, and also those who will have the most serious consequences. This would be the most dangerous in the organization. These risks must be prioritized in costs, they can cause to the organization. Risk levels must be set, depending on the severity impact is. Levels are high, medium and low. A high level means an injurious effect on the Organization, measures must be taken both to solve the problem. A moderate level means less devastating consequence that a low level indicates a risk which may not be important to consider. In this case, management must decide whether it is worthy to allocate resources of time and money to resolve the situation or not.

Risk management procedures, high-level risk must be handled in the first place, whereas those with the reduction of the likelihood of occurrence and less impact should be treated as follows. Organizations need a plan of risk management which details the procedures used as solutions. Risk management consultants can help you create this plan and the best solutions to deal with any problems you may face.

The final step must be done continuously. In an organization, risks are still not the same. The general business environment changes, regulation changes, changes in society, therefore new problems can appear while others disappear. Strategies must be constantly reviewed and adapted to new circumstances.

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