Life is a series of calculated risks – nothing more. Whether it’s catching the running train to work, crossing a busy road, investing in stock market, or making dietary choices, life is full of risks that you can’t get rid of, but can definetely mitigate.
Risk management is the identification, analysis, and response to an organization’s capital and earnings. It includes the proactive management of controlling possible future outcomes and reducing both the possibility and reoccurance of potential impacts.
Organizational risks and threats can be caused from a wide variety of sources like financial instability, legal obligations, management errors, accidents or even natural disasters. The objective of effective risk management is to increase the probability and/or impact of positive risks and decrease the impact of negative risk, in order to optimize the chances of goal accomplishment.
Risk management processes aims to identify and manage risks that are not addressed by other methods. When unmanaged, these risks have the potential to cause the organization to deviate from the goals and may lead to failure. Consequently, an effective risk management is directly related to the company success.
Risk management steps involves various methods than can be performed more or less in the following order-
The strategy of risk mitigation dependents on the tolerance level that a company has already defined for itself. If a business sets up risk management as a disciplined and continuous process for the purpose of identifying and resolving risks, then the risk management structures can be used to support other risk mitigation systems.
By implementing a risk management strategy and analyzing the various potential risks, the organisation can save a lot of money and its future. The robust risk management plan can help the company establish its procedure to avoid threats, minimise their impact and cope with the results. The following are the reasons why risk management system is essential for any business.
Our team at Suraksha Is involved in a wide spectrum of value-added services for corporate customers across India. Our risk management division works on cases that involve commercial and industrial risks. Feel free to contact us to avail any of our services.
CIN- U67190WB2003PTC095855, IRDA LICENSE NO - 177