Risk Management: Importance, Methods and Process

Risk management can be used as a tool for greater rewards, not just control against loss. Enterprise risk management has become an important topic in today's more complex, inter-related global business environment, replete with threats from natural, political, economic, and technical sources. Risks are studied from different silo disciplinary perspectives, with a discussion of how various methods and tools are used to optimize risk management. Risk management for a group that does not actually manage anything leads to the notion that managing risk is somehow different from managing other affairs within the firm. Risk management is an activity which integrates recognition of risk, risk assessment, developing Strategies to manage it and mitigation of risk using managerial resources. Risk management plans should then be developed, based on the decision to avoid, assume, or transfer the identified risks. It may refer to numerous types of threats caused by environment, technology, humans, organizations and politics. The paper describes the different steps in the risk management process which methods are used in the different steps, identify risk factors, and improve performance, important of risk management.