The success of a Risk Management System requires a business owner to comprehensively follow the steps laid out in the system and practice strict adherence to the rules.
- Identifying Risks: These risks could be due to fire or forces of nature, risk of obsolescence, competitive products or theft (of tangible as well as intangible material)
- Quantifying Risks: Identified risks need to be quantified in terms of potential loss of income and reputation caused by the actual loss, as well as further loss of income until the risk is tackled and eliminated
- Formulating Strategies to Contain the Identified Risks: As has been said earlier, you cannot run a business without running a risk or taking a chance, so what one can do, is to contain the risk so as to limit potential losses
- Implementing Strategies: Strategies, no matter how good they are, are useless unless they are put into practice it also helps to evaluate their utility and identify company shortcomings.
- Continuous Monitoring of Risk Containment Tasks: Risk containment tasks have to be constantly monitored to ensure that the risk that they present is tackled promptly and thereby minimized, this ensures that the changing needs of the business are met.
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