Every company should be part of the risk. The risk management is an important process in many organizations. Depending on the company, steps can be taken to reduce the frequency and extent of risks. Risk management is a process or group in an organization that takes management actions to reduce risk. This activity includes a process to measure and develop strategies to manage risk. The methods used are transferring the risk to another party, avoiding the risk, reducing the negative effects of risk and accept some or all of the consequences of a particular risk.
There are two types of risk. Traditional risk management is focused on the risks posed by physical and legal reasons such as natural disasters, accidents, or death lawsuit. Financial risk management focuses on risks that can be managed using traded financial instruments. Large companies employ risk management team for the smaller business practice informal, if not formal, risk management strategies that are rolled into responsible operations management. Risk managers recognize and reconsider their organizations loss exposures include property, liability, workers and net income. This helps to promote growth through profit or loss, stable operation and a stable income.
The role of risk management is to plan and implement strategies to manage or mitigate the risks the company is exposed. This planning involves a five-step process. The first step is to identify potential risks. The process to find the risk may depend on culture, industry practice and compliance. Once risks have been identified, the next step is to assess the potential severity of loss and probability of occurrence. The third step is to find a possible treatment for the problem. This may include transportation, access, reduction or retention of potential risks. Next is to implement the plan by choosing the right method of treatment. Before implementation, review and evaluation of the program is necessary.
first risk management plans are never perfect. Practice, experience and actual performance, the necessary changes to the plan. The plan should make room for flexibility in decision-making. Risk is considered art circles management experience and exposure situations helps master this art.