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1. The Impor tance of Risk
Management in Business

2. One term that has become synonymous with doing business in any
industry is risk management. It’s really not enough to just open
your doors and start operations without thinking ahead.
Elements of risk are everywhere and when they are identified before
they become an issue, it’s far easier to come up with viable
solutions.
Keep reading to learn more
about this critical business
topic.

3. What Is Risk Management?
Basically, risk management refers to identifying, assessing and taking
economic control of various business risks. Risk management uses a
variety of different tools to provide realistic solutions, and
employees from several different levels of an organization may be
involved.
Some risks are easy to predict, while others are completely
unpredictable and beyond anyone’s control.

4. Steps In the Process
Some of the details of a thorough risk management process include:
 Identifying all the risks that pertain to running your business
 Reviewing and estimating the likelihood they will occur
 Understanding each risk and how to respond
 Creating a system using the most effective tools for each type of
risk
 Putting the system into practice whenever necessary

5. Why Is Risk Management Becoming
More Important?
The practice of risk intelligence and risk management is becoming
more of an issue and more important in many industries because:
 Customers are more prone to litigation
 The public is more critical
 Insurance coverage isn’t as comprehensive
 Legislation is more strict and extensive
 Management is more cautious after learning from past mistakes

6. 5 Key Risks All Businesses Face
All businesses face risks that are unique to them and risks that are the
same. Here are five that all businesses must deal with:
1) Development risk
2) Manufacturing and operations risk
3) Sales and marketing risk
4) Profit and loss risk
5) Future growth risk

7. When Risk Management Is Most
Important
Risk management is an important factor all the time, but especially
in situations where:
 A business has multiple sites
 A business is too big for any individual to know all the potential
threats
 A business has operations overseas
 A business has many suppliers or subcontractors
 A business uses a wide range of processes

8. 5 Qualities of a Good Risk
Management Program
Every good risk management program has similar traits and
qualities. Here are five that all good programs share:
1) The program is inclusive - it doesn’t rely on just one person or
group inside the business to succeed.
2) Approved by senior management - the active support of senior
management will improve the likelihood of success.

9. 5 Qualities cont…
3) Transparency - a risk management program works best when
then the goals, process and results are shared with
stakeholders.
4) Proactive - the program should include processes that take
advantage of opportunities presented by variable risk.
5) Complete - A good system addresses how risk affects the
company as a whole, it doesn’t just identify which ones are a
threat.

10. Modern Risk Management
As more and more businesses increase their reliance on the internet,
new risks are evident and more security measures must be put in
place to address them. Some new age risks include:
 Privacy violations
 Copyright, patent and trademark infringement
 Employee online behavior
 Noncompliance with foreign law
 Increased risk of lawsuits

11. References
http://www.morebusiness.com/running_your_business/managem
ent/Risk-Managment.brc
MoreBusiness.com
http://www.cholarisk.com/riskmanagement.asp
Cholarisk.com
http://www.aiu.edu/publications/student/english/Business
%20Risk%20Management.html
Atlantic International University