Risk Management Process

Risk management is the establishment of risks followed by coordination and application of resources to optimize opportunities and reduce the occurrence of unfortunate events known as risks. Risks are the result of unknown or uncertain factors on goals and objectives of a business.

The risk management process is a standard process that consists of the following steps:

- Identification of the context: A chosen area of interest is taken into account.

- Identifying potential risks: At this stage, the risks are identified. Risks are classified according to the source or the threat the risks will cause.

- Assessment: The potential impact that the risks will have and the level of damage they shall cause if they occur.

- Risk treatment: Risk treatment will include several measures such as risk sharing, risk reduction or risk elimination.

Once the risks are identified assessed, an implementation process will have to follow. Thereafter a review and evaluation of the plan will be necessary.