RISK MANAGEMENT

Managing Risk In Business

Introduction3

Discussion3

Functions of Risk Management3

Business Continuity Planning4

Information security5

Product Compliance5

IT Audit6

Importance of Risk Measurement for this Company6

Types of Potential Risk7

Financial Risk8

Credit risk8

Investment Risk8

Liquidity Risk8

Market Risk9

Operational Risk9

Process Risk9

Intangible Risk9

Legal Risk10

Impact of External Environment on Risk Management10

Contingency Planning and Crisis Management11

Prediction of Possibilities11

Plan Management12

Crisis commencement12

Unexpected Events12

Role of Risk Management13

Managing Risk In Business

Introduction

The core idea behind this literature is to a brief report on the various aspects of Risk Management in a Business. The literature will discuss the impacts of various factors that can affect the company and will give a general idea of potential risk in business. There are various risks that can appear when someone is running a business involving vast capital and human resources. In general, Risk can be defined as a single incident or a collection of events that can create a situation in a company that is capable of damaging the business from every aspect. These risks can affect the market in two different forms; one can clean sweep the entire company while others can damage the company in such drastic ways that it could take a lot of time and funds to overcome those damages. This does not mean that one should leave doing business only because of possible Risk. These unnecessary events or drastic scenarios can be avoided if the administration of the company can predict the upcoming risk. For this purpose, every business holds a group off members for this purpose only. Risk managers in the business are supposed to predict the upcoming potential risk and provide a solution for the company to avoid risk. Whatever the size of business you have, all you have to do is to identify the upcoming risk in the business."If Management of a business is well prepared" then the organization can minimize the risk or even can avoid the complete risk in advance.

Discussion

Functions of Risk Management

In order to run a business smoothly, every business management is completely dependant on the Risk Managers within their organization. The Risk managers play a significant role in an organization by identifying the upcoming potential risk in a business. Every global business unit needs to plan their spot of information security, the compliance and insurance, internal audit, and a continuity planning for business. These can be seen as the primary functions of Risk Management Department in a business. The essential functions of a risk management summarized below as:

To identify the external and internal threats that can damage the development of business.

It is the responsibility of a risk manager to report the financial risk of an organization.

Identification of the balanced compliance among customer requirement and the product.

Verification of the outputs up to considerable tolerance.

Risk in the credits of an organization.

To ensure an efficient customer services.

To observe the efficiency of all above functions and address their solution by Internal audit.

These functions of risk management are responsible for the measurement and the possible solutions to minimize or avoid the complete risk (Culp, ...