How to manage risks in your business
In recent years, the word “risk management” has frequently been mentioned in the news and other media. For example, the importance of risk management is being argued every time major trouble or failure that may shake the backbone of a company, such as a company’s information leak, system failure, copyright or intellectual property infringement, is reported.
What is risk management?
Does your company perform risk management regularly? If you do not usually make a response plan in case of the worst, it is too late after something happens.
Risk management (crisis management) manages the risks that may occur while continuing the business so that they do not occur or the damage is minimized.
The focus is on anticipating the worst, identifying what goes wrong, assessing which risks dealing with, and implementing strategies to avoid or address those risks.
Companies that pre-identify risk have better preparedness and cost-effective remedies. Here is how to identify business risks.
We will also show you how to implement effective risk management policies and programs that increase your chances of success and reduce your chances of failure.
How to proceed with risk management
Risk management must be at the core of strategic management of the business, as companies face many risks. Risk management helps identify and address the risks that your business faces. Doing so increases your chances of achieving your business goals. The risk management process is
- Systematically identify the risks surrounding your business activities
- Analyze possible events
- Understand how to respond to these events
- Prepare an implementation method to deal with the result
- Evaluate the effectiveness of management methods for effective processing And as a result,
- Improve decision-making, planning and prioritization
- Helps allocate capital resources more efficiently
- You can predict what works and what does not, so you can minimize damage or, in the worst case, prevent disasters and severe financial difficulties.
- Significantly increase the chances of delivering your business plan on time and budget can do.
Risk management becomes even more critical when your business starts something new, such as launching a new product or entering a new market.
For example, you should consider the risk of competing companies entering the same market or the loss of value of your product due to breakthrough technological advances.
- Risk management is a continuous process of identification → evaluation → response → monitoring → identification…
- Brainstorm each thing to identify it.
- Brainstorming is a group meeting method for sharing ideas.
- Brainstorming should include the following:
- Identifying internal or external events that can adversely affect the achievement of strategies and goals
- Identifying the risk of management overriding the rules
- We are identifying common risks associated with the type of organization, department, or process being evaluated.
Then check the following and collect the information.
- Business process documentation, relevant policies and procedures, and relevant legislation
- What has done from the past to the present, its contents, and procedures?
- Division of duties
- Review of internal audit results and external audit results
- Quality interview
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