What is risk management: a strategic business management view

Risk management is one of the weird ducks where the term can mean many different things. Risk management is used to manage the bank and determine how much exposure is on the loans. Risk attorney returns to the insurance agent to determine how many insurers to buy. On the other hand, risk management is reimbursed by the employer, the insurance company, to ensure that receivables from the company are reduced and limited.

With all these definitions, no wonder the term is misunderstood and abused?

In fact, when we look at these definitions, there is a constant one. They all deal with loss and loss-protection.

And that's just unfortunate.

The truth is that risk is a very precise term in mathematics and probability theory. It is only commonly used to let the word become a center of a threat. The word risk actually reflects the likelihood of occurrence. The risk is contrary to certainty. It does not indicate the amount of exposure or the nature of exposure. This does not matter in the above examples. However, in project management and relative strategic management, in more general situations.

This may seem semantic, but it really matters. In the simplest risk management, you see it reimbursing a set of treatment processes. The focus of these processes is to ensure maximum return if the event is uncertain. To do this, you will equalize the cost of positive events and return on one side. On the other hand, it balances the loss of losses and losses.

For example, you say you are building a new business over the Internet. One promotional video may be viral. If that happens, business is gaining momentum in business. In this case you can do three things. The first is to sit back and, if this happens, it will happen. The second is to do something (like animated cats) that help to virulence the video. At least I hope the video will be viral. The third thing is to make sure that, when done, you have the resources to support all your sales (for example, restoring extra bandwidth). The risk management process will help you not to overcharge, yet make the most of the activity up.

What about a negative example of risk management? Let's look at a new strategy for business creation. What happens if customers do not accept the new strategy? Sales will fall. Three things you can do again. If you think that loss is a short term pain for long profits you can do nothing. Or you can reduce your risk by first testing a small group of customers. Finally, we could go back to the old strategy to keep our existing customers.

Both examples have good output and bad exit. Your video may be virulent or may hurt your existing customers. The strategy is well-received or unacceptable. None of these are safe. Risk management is a set of management processes that ensure that whatever happens, it is displayed at the highest level.

Source by sbobet

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