What is the risk management process?
Risk management has to do with anticipation and analysis, what types of risks one can face and how to avoid or deal with them. The risk management process is a simple process consisting of five steps. Although this can be used to determine a personal risk, it is usually used by society to understand what risks they can face, how to handle them and how to deal with their businesses. Depending on the size and purpose of the company, risks may vary. Some risks may pose short or long -term threats. Some of the most basic risks include injuries of employees, fraud, technology and market fluctuations.
The next step in the risk management process is to analyze or assess which of these risks will have the greatest impact on the company. In addition to prioritizing risks, the risk manager will have to determine which risk factors have no control over and whites. After assessing each risk, they must be evaluated. A list of the company's goals and objectives is required to complete this step. A specific evaluation of the possible impacts of each risk on the company or business objectives will be better prepared to solve the results.
The fourth step in the risk management process is to create a treatment plan. Based on each risk and its impact on the company's objectives, the risk manager must determine what can be done for the treatment of every risk. Creating a treatment plan will require decision -making to which risks can be prevented and can only be reduced.
The treatment plan should describe in detail the steps that will be taken to prevent or reduce the impact of each individual risk. The plan should also include how you will deal with the risks that are inevitable. The company should decide how to manage the risks that have a dreary impact on business and how it will manage those that can change the course of the business plan.
The last step in the risk management process is continuing risk monitoring. This is a step to which it should occur throughout the life of society, so it is not a step, but continuous supervision of the effects of risk. Monitoring should occur at every level of business in order to provide a complete view of the impact of the risk.