Essay on risk management states risk management involves mitigating and controlling hazards that may occur in the organization. The essay on risk management suggests that one way of ensuring that there is risk management is by getting insurance cover. Risk management is quite essential and every organization is concerned about the risk that may occur which can lead to loss of monetary value. This is discussed in-depth by management essay writers. In the transportation sector of the organization, risk management will involve tracking of the cargo and logistics so that there is no loss of the assets or supply.
Managers must be educated on risk management strategies, and should be equipped with the skill to handle unexpected situations. There are no absolute solutions for risk management. Different situations have impacts that can be considered as great or minimal. Risk management involves assessing the areas which are considered perilous, and putting safety measures in such areas. For example fire extinguishers in fire hazard areas.
Financial risk management is another sub category of risk management that the organization is usually concerned with. Financial risk management will involve the decisive practice of an organization using financial techniques to manage current exposures to financial risks, especially in the areas of credit risk, and market risks. The economy of the country can also play part in risk management since the value of the country’s currency can depreciate in respect to other major world trading currencies. Like the dollar and the euro, and then the company can suffer financial loss since the cost of production can increase, and the value of worldwide logistics will shoot up.
Globally risk management has been considered the pillar supporting organizations. This has been viewed so as it’s a mechanism which helps the organizations to mitigate any threat which may derail the achievement of the desired objectives and goals. Scholarly definition of risk management is conformed to evaluation, detection and prioritization of risk trailed by economical and coordinated resources submission to mitigate, manage and screen the probability or impact of unseen events. This also applies in the maximization of spotted opportunities. This paper is going to evaluate the importance of risk management.
Whether in service or goods business risk management enables organization to focus ahead before a calamity can succumb and destroy capital. Therefore, the role of risk management in an organization is immense as it helps the managers to speculate on whether the direction the company is taking will yield fruits or is a barren route which needs rerouting. Uncertainties are the number one causes of failures in many venture that organization or individual endeavor into for the hope of making a profit. Risk management usually has the capacity to mitigate and pin point this uncertainty when consulted by the pursuant early (Chapman & Ward, 2002). Risk management offers leveled ground which is habitable for competition and as well as generating probable income to the pursuant of this process. Through the process of reducing threats risk management usually creates and seizes opportunity avenues. Through maximization of the seized opportunity one is able to turn uncertainty into certainty resulting to good returns both financially and competitively.
Risk management is a counteractive agent which acts as an overseer for organization or individuals pursuant to business deals, in mitigating uncertainty and optimizing potential in the process.