The true connotation of managing the risks is combined with the activities of human wherein the identification of the risk, risk evaluation, adapting techniques to manage it and lessening of risks by using managerial strategies is done. The various ways in creating risk management includes moving the possible risk to other group, preventing the risk from happening, lessening the risk’s negative effects and recognizing all the consequences that a specific risk might bring.
Most of the management of risk prioritizes on the risk concerning natural disasters like flood, accidents, fire, and other natural calamities. The aim of having a risk management is to lessen various risks that are related to areas that are point of prioritization of the company and the people. It is associated with all the different kinds of threats due to the environment, human, organizations and technology. The standards of risk management focus on the processes that give a greater risk rather than those that only offers minimal risk.
The processes in risk management include the identification of the risk in the area of interest and then mapping out topics on which a solution will be formulated, identifying the framework for defining the agenda of the solution and making an analysis on the risks that are included in the process and the reduction of the risks by utilizing all the available resources. If the risks are not properly evaluated, wasted time and profit will take place. If the processes in risk management are highly prioritized, the company will remain incomplete with all the risk still existing. Risk management must be done in a systematic way to achieve the objective of the business.