Question

MANAGE RISK

Question 3

• Each organisation should have policies and procedures, grounded in the relevant legislation, in place to support their operations and the various functions/ activities of the business. Risk management plans will relate to the overall operation of the organisation.

  Outline the reasons why business organisations should develop risk management policies, risk registers and processes for managing risk. (250 words)

Answer in your own words.

Answer 1

Risk Management plays a crucial role in every organization because managing risk helps the organization to achieve the goalsand thereby maximize the profit of shareholders. The main aim of Risk Management is to identify the problems or errors before it happens and take precautions to overcome the same.

Risk Register is a tool in risk management. It helps to identify the risk which may occur in an organization. In the risk register we are mentioning different risks which we are going to face. Frist column giving a good description of each and every risk and the second column give a detailed explanation regarding the risk and the third column mention the consequence which will face if we cannot manage the risk and the last column shows the date which the risk is supposed to be addressed.

The steps help to manage risk is to identify the possible risks then analyze the risk after then evaluate the risk based on priority and finally monitor each and every thing. It helps to manage potential risk and thereby reduce the negative impact that may happen.

The risk management policies are different based on the types of business which we are handling. The risk factors may be political, economic and social.