Risk Management By Kellie DeForest

Risk Management

By

Kellie DeForest

Intro to Business

Mr. Mandau

March 26, 2004

Research Project: #5

        

Risk Management

Risk management is described- as the process of evaluating the dangers faced by a firm or an individual and then minimizing the cost involved with those risks (2001). In other words, its how a business or an individual protects himself or herself from loss or injury that could surpass. at that place are many types of risk management as in that respect are many types of risks.

        Risk avoidance is taking footf on the whole to avoid obvious risks. For instance, when a bank closes, employees lock up all currency in a secure bound to avoid losses in the instance of robbery. Unfortunately, not all risks can be prevented this easily.

        Taking steps to minimize a risk that is unavoidable is called; risk reduction. Many companies use face-to-face to analyze company procedures and then determine which risks can be reasonably reduced effectively. An example of this would be to have stochastic drug tests given to the employees to ensure that they are not to a lower place the influence of anything that would endanger them on the job.

        Risk assumption meat that a company accepts the fact that there are everlastingly going to be risks involved when running a business.



In other words, a business takes responsibility for certain risks that occur because they understand that they cannot prevent everything. Generally, companies assume a risk when superstar or more of the following occur

1.         The potential loss is excessively small to worry about at that time.

2.         Effective risk management has reduced the risk.

3.         Insurance coverage, if available, is too expensive.

4.         There is no other way of protecting against a loss (2001).

Large firms much use a particular form of risk assumption, which is called, self-assurance. It is a...

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