Question

What do you understand by risk management decisions? Give your opinion on each decision. Are they perfect to manage the risks?

Answer 1

Solution:

Risk management decisions are the decisions that are a must to take to mitigate the risks faced by an organization or business. These decisions are a part of the risk management plans that are developed by the organizations regularly to ensure they are managing their risks in a better way and mitigating any damages to the organization or business as a whole because of the risks exposed to them. The risk management decisions are to be taken in an environment of turmoil because when the risks show up the time to take the appropriate decision is less and also we cannot analyze these risks after they are exposed to the business and this is why there should be a list of decisions and their impact on the organization which can be used while making the decisions during the times when risks are exposed to the business.

Hence, the choice of the appropriate decisions will be at the discretion of the business and how they wish to manage the risk, and depending on the decisions of the management and other stakeholders appropriate risk management decisions are taken.

These decisions are often near perfect to manage the risks. No risk management decision can be 100% perfect because it is hardto determine the nature of the risk we are exposed to and its also difficult to find the best possible solution to the risk we are exposed to as a business. Hence, instead of a perfect decision we choose to take the actions that mitigate the impact of the risks on the business and make sure as less as possible impact is faced by the business because of the risks.

Hence, this is how we manage the risk management decisions to mitigate the risks.