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Sample Essay

Word length approx: 1727 words

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Running a business certainly involves a level of risk. Due to this risk, a business must be run effectively and efficiently in order to eliminate the risk involved in running. Risk management is the process by which a business tries to reduce if not eliminate the risk involved in carrying out a business operation.

The process of risk management tries to find out any situation or any process in the firm which could lead to high levels of risk in the business and which could be a potential threat. Anything in the business could pose a risk such as the personnel, the managers and maybe even the way in which tasks are being carried out; anything can be seen as posing a risk to the effectiveness and progress of a business. If such things are found, the process of risk management requires it to be eliminated in order to reduce the damage which could be caused to the resources owned by the organization.

In every business, there exists a certain amount of uncertainty. Business is done on the basis of risk and without taking a risk; you can never know the outcome of anything. However, no business wants to be under a constant risk and therefore a firm is likely to make use of risk management strategies in order to reduce and hopefully eliminate the degree of risk and uncertainty which exists in a firm.

The first step involved in the risk management process would be that of…

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