For full text article go to : http://www.educorporatebridge.com/risk-management/risk-management-process/ This article on Risk Management Process outlines the important steps involved in this process and explains them in detail.
• context definition
• risk identification
• risk assessment
• risk control
• checking and supervision
• process review
Phases of Risk Management Process
• The first and the foremost thing is identifying the areas of
risk. Risks may arise due to specific combination of
market, product or service, manufacturing or distribution
process as well as other external factors.
• Next thing is to identify and define an assessment activity
• Based on that it becomes necessary to organize resources,
and also defining duties and responsibilities.
• In this next phase of Risk Identification Process, it is
important to identify the potential risks and then
give their detailed description. Hence all possible
sources of risk such as, the positions of the
stakeholders, market changes, manufacturing errors
or work accidents should be thoroughly analyzed.
• The process of identifying potential risks must include:
Objectives that the organization has set.
Scenarios that the organization may face in carrying
out its business.
Procedures that the organization adopts for its
management and operational purposes.
In this phase of risk management process the decision
making process becomes particularly important. It
includes one or more of the following conditions:
• Transfer of the risk
• Exclusion of the risk
• Reduction of the risk
• Acceptance of the risk or an amount of the risk
Communication of risk is another important step in
the risk management process. In this step the
following things must be properly documented in
detail in a Risk Management Report:
• The profile
• The matrix
• The risk treatment
• The control planning
The Planning step defines the risk control methods, that is:
• Interpretation, sending or storing of incoming data for the
• Appropriate level and localization for the decisions and
actions the operative procedures and/or practice.
• Control instruments
• Interpretation, sending or storing of output data from the
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