Jun

11

Risk is always present in business. Any business ventures carry both a significant amount and diversity of risks. In many businesses and companies however, risk management is taken for granted. There is also a lack of understanding on what constitutes risk management.

In most cases, risk management is thought to be limited to just liability insurance. In reality, risk management can encompass a much broader business scope.

Most managers and executives recognize that it is necessary to identify business risks, rank them in order of severity of impact to the business and create actions to mitigate, if not eliminate, the risks. But between recognizing and taking concrete steps to manage risks lies the difference between a sustainable and a short-lived business.

This is especially true for start up businesses. This is also true for new projects and products. In the exuberance that the product will be successful, all the potential pitfalls are literally taken for granted.

If risks are ever present, who should manage them and is responsible for identifying and managing business risks?

The answer to that is risks should be managed by everyone in the company, from the top boss down to the employees who face the customers on a regular basis. Managing risks has to be approached and mitigated (if not eliminated) on a multi-dimensional basis.

The severity and the type of risk vary and will almost inevitably be present in all the hierarchy and functional units of the company. And also importantly, it will vary from business to business.

There are countless types of risks in a business but risks present are also different for different businesses.

The key is to be able to identify those risks that are relevant to the business and the environment it operates include competition, technology and regulatory, to name a few.

The next step is to rank those critical risks and create measures to mitigate if not eliminate the risk.

To manage risks spells the difference between success and failure.

Outsourcing Services – Minimize risk with small-scale, pilot projects first!

Source: 
Ortiz, Roberto. "Risk Management." 9 June 2011.
The Manila Bulletin. Accessed 10 June 2011.
Link Here.

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