We should see the risk is in every business from the small corner store to the large manufacturer there are common challenges with insurance claims and risk in general to losses could be occur as a result of flawed products. In the financial world risk management to identify the stakeholder analysis and acceptance or mitigation of uncertainty in investment decisions essentially risk management occurs when an investor or fund manager analyses and attempts to quantify the potential for losses in an investment and then takes the appropriate action given the fund’s investment targets and risk tolerance.
Risk Management Procedure
Here are five steps, it starts with detecting risks estimates project risk management and the solution is implemented to ultimately the controlled.
let’s discuss each step separately
Find the risks
Risks in business is exposed to in its working environment there are many of the risk factors as probable if the association employed a risk solution to information that is included straight in the system the benefit of this strategy the risks are nowadays transparent to each stakeholder in the organization have a access to the system.
Analysed the risk
Risk when your team categorises potential problems this is the time to deeper stakeholder analysis. How they are these risks to take and if they take then what should be consequences to this step from your team will observe the probability.
Prioritize the risk
Prioritize the risk after analysing the ordering begins rank respectively risk by factoring in both its possibility of happening and its potential impact on the project this step stretches to comprehensive belief of the project at hand and pinpoints where the team’s focus should the conducts during the treatment phase.
Treat the Risk
Treat the risk after ordering the risks develop your plan though you can’t imagine each risk you should have to the previous stages for the achievement to risk management procedure initial with the maximum precedence risk initial task your team to moreover solving or at least reducing the risk so that it’s no extended a risk project effectively giving and modifying your team’s resources correctly without hampering.
Examine the risk
Examine the risk communication between your team & stakeholders is critical for the continuing monitoring of prospective of the threat.
Risk management approaches
First approach is risk avoidance risk prevention involves preventing and avoiding any activities that could take the lead to a risk reduction risk reduction is focused on actions that will reduce the probability of a risk.
Project plan or organizational process or by scaling down its scope risk contribute to risk sharing.
Smarter Way to Deal Risk Management
One of the requirements for you to succeed greatly in life is you’re going to have to move out of your comfort zone you’re going to have to take risks where there’s a great possibility of failure at least in the short term now I want to talk about what we call taking smart risks is taking risks that are necessary but will not kill you if they don’t work out. Eeven while you’re sleeping you’re facing risk. The issue then is not whether or not you take risks the issue is how skilful you define the right risks to the right reasons is pursuit of the right goals or objectives the improved you develop at analysing assessing risk as all top people. Successful people do the more competent and more capable you will become the more risks you’ll be willing to take because they’re smart and the more successful.
Now there are four types of risk:
- First type is the risk that is not yours to take. Now every achievement is to consequence, the long term success remember there are certain risks that are not yours to take so don’t take.
- Second risk is the risk that is pointless you involve in an unnecessary risk. Many of the errors that you made and that problem has happened because you are behaved without idea to minimize the risks involved it’s been said that you should invest as much time and exact examining or exploring and investment as you spent earning the money to make the investment.
- Third risk is that you can offer to gross business in new outlook monitoring up on a principal and discovering a original opportunity to every risks that afford to take in these cases the cost of failure is very low while the rewards of success could be great even putting together a detailed proposal for a prospective big sale is a risk in terms of investing time and effort but you can afford to take that risk because what are you going to be doing otherwise watching television it’s worth taking because of the upside and there’s no real downside.
- Fourth risk that you can not to afford to take away the concerns of creating a mistake would be too enormous you cannot afford to bet your whole company or your whole bankroll on a speculation of any kind you cannot afford.