Risk Management is defined as the process by simply identifying and controlling the hazards to protect the force. It is a form of closed loop process which is applicable to any situation and the environment.
This can be defined as identifying, analyzing, treating and monitoring of the risk involved in any activity or process. This concept is a logical and a systematic approach which is identifying opportunities and this helps in avoiding or minimizing the losses. Risk management being widely used in many of areas including both the public and private sectors especially the finance and investment, insurance, healthcare etc.
The risk management process is mainly a 5 step process, which initiates with
The first step of identifying the hazards that consider all aspects of the current and future situations, environment and even the historical problem areas.
The next step is assessing the hazards to determine the risk the hazards indicate the impact of each of the hazards in a situation of the potential loss and the cost which based on probability also severity.
Later the risk managed, and the frequency known by the probability. Moving ahead the risk managed by developing a control and making the risk decisions. Here, the control measures developed which eliminates the hazards or reduce its risk. When the control measures developed they also being evaluated for the risk reduced to a particular level and the benefits outweighed of the potential cost.
The fourth step to the risk management is implementing the control in a further manner by eliminating the hazards it helps to reduce their risk. The control being implemented by the standard operating procedures, orders, briefing, back briefs, training, and rehearsals with new equipment.
The last step is supervising and evaluating the performance and then enforcing the standards and controls and then finally evaluating the effectiveness of the controls and adjusting as necessary. Contingency plan formed to minimize the impact of adverse condition and some time contingency plans made to complete change the direction of the project.