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Risk Management Process

The document discusses the risk management process, which consists of 7 main elements: 1) communicate and consult, 2) establish the context, 3) identify risks, 4) analyze risks, 5) evaluate risks, 6) treat risks, and 7) monitor and review. It also lists several benefits of risk management, such as providing a structured framework for strategic planning, improving organizational efficiency, and enabling management to focus on high risk areas.

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170 views5 pages

Risk Management Process

The document discusses the risk management process, which consists of 7 main elements: 1) communicate and consult, 2) establish the context, 3) identify risks, 4) analyze risks, 5) evaluate risks, 6) treat risks, and 7) monitor and review. It also lists several benefits of risk management, such as providing a structured framework for strategic planning, improving organizational efficiency, and enabling management to focus on high risk areas.

Uploaded by

marias_ali
Copyright
© Attribution Non-Commercial (BY-NC)
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Name: M.

Yaqub Proagrame: BBA(Hons) th Semester : 8 Subject: Risk Management Assignment Name: Risk Management Procces Submitted to; Sir Fakhar-e-Alam

Abasyn University Peshawar

Risk Management Process


The systematic application of management policies, procedures and practices to the tasks of establishing the context, identifying, analyzing, evaluating, treating, monitoring and reviewing risk. The main elements of the risk management process as shown in Figure 1 are as follows:

1. Communicate and consult


Communicate and consult with internal and external stakeholders about the process as a whole and at each stage of the risk management process.

2. Establish the context


Establish the external, internal and risk management context in which the rest of the process will take place. Establish the criteria against which risk will be evaluated. Define the structure of the analysis.

3. Identify risks
Identify where, when, why and how events could prevent, minimize, delay or improve the achievement of the objectives.

4. Analyze risks
Identify and evaluate existing controls. Determine the likelihood, severity and the resulting level of risk.

5. Evaluate risks
Rank and priorities the risks to assist decision-making regarding the extent and nature of treatments required.

6. Treat risks
Develop and implement appropriate risk treatment strategies to address the risks.

7. Monitor and review


Monitor the effectiveness of all steps the risk management process to ensure continuous improvement. It is a reiterative process of well-defined steps which, when taken in sequence, enables continual improvement in decision making by providing management with a greater insight into organizational risks and their impact.

Benefits of Risk Management


provides a structured framework for more effective strategic planning to ensure maximizing of opportunities and minimization of losses widens management perspective and encourages initiative and pro-active behavior contributes to improved organizational efficiency and effectiveness optimizes the use of resources promotes greater openness in decision-making and improves communication provides senior management with a concise summary of the major risks affecting the organization and a mechanism to ensure that appropriate resources are directed towards areas of high risk provides a framework for ensuring that unavoidable risks are adequately insured provides an effective and systematic approach which enables management to focus on areas of risk in their operations improves the level of accountability in the organization

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