What are the five steps of Risk Management?
To manage risk, there are five essential measures to follow. They are as follows :
* Identification of Risk : The first step is to determine the risks that the company faces in its current operational environment. There are numerous forms of risks, including legal risks, environmental risks, market risks, regulatory risks, and so on. It's critical to recognize as many of these risk variables as possible.
* Analysis of the Risk : It is necessary to examine a risk once it has been recognized. The risk's scope must be assessed. It's also crucial to comprehend the relationship between risk and other internal components. It is crucial to establish the severity and importance of the risk by looking at how many business operations it affects.
* Ranking the Risk : Risks must be prioritized and ranked. Based on the intensity of the risk, most risk management solutions have several risk categories. Risks that can result in serious loss are ranked the highest, while risks that may cause some inconvenience are rated the lowest.
* Treating the Risk : Every risk must be minimized or eliminated to the greatest extent practicable. This is accomplished by contacting specialists in the field to which the risk pertains. In a manual situation, this means calling each and every stakeholder and then scheduling up meetings for everyone to talk about and debate the concerns.
* Reviewing the Risk : The risk is then reviewed to ensure that the risk has been eliminated completely.
