The main goal of any business is to get the maximum possible profit with minimal risk. The system for managing potential losses is called risk management. It consists of two subsystems - the control object and the control subject. Risks arising as a result of investment activity or in the process of economic relations between business entities are an object of management.
Risk management professionals are entities.
Risk management performs a range of functions:
- forecasting and planning, consisting in the development of measures to maintain the level of risk within the planned;
- organization - the creation of a special structure within the enterprise carrying out risk management;
- motivation - a system of stimulating professionals for the effective application of managerial decisions;
- control - analysis of the effectiveness of measures taken to reduce the level of risk;
- regulation and coordination - adjustment of programs and their implementation through effective delegation and distribution of responsibilities.
There are several risk management methods . Risk management uses them depending on the tasks:
- if the risk level is too high, then the refusal method is most effective;
- if there is a possibility of its decrease, then diversification and hedging, money or quality management are applied;
- partial or full transfer of risk is possible, for example, to an insurance company;
- the adoption method involves the formation of reserve or insurance funds or the implementation of other methods that can level potential risks.
Types of risks can be:
- strategic, based on the long-term development of the enterprise;
- operational, arising directly in the process of project implementation or economic activities;
- financial, associated with capital losses;
- reputational, determining the status of the enterprise in the market.
Depending on them, separate categories of this concept are formed. So, financial risk management is used in investment activities, and is also the basis for the functioning of various credit and financial organizations.
The priority areas of risk management are determined depending on the overall assessment of external and internal factors that affect potential risks in the activities of a particular enterprise.
The main task of risk management is the recognition and classification of risks, the choice of tools and methods of insurance against them, their minimization or a complete rejection of projects if there is a high probability of significant losses. Effective risk management is the main platform for the successful and profitable development of the enterprise. Therefore, it is worth paying maximum attention to this! Now you have basic information that will help you move in the right direction.