This article is one in a series of many to explore the field of Risk Management. For those whom have never had any exposure to the field this will serve as a foundation of learning. This first article will give you a high level broad scope of risk management. Future articles will dive deeper into such things as Identifying Exposure to Loss, Evaluation of Risks, Alternative Risk Management Techniques, and finally Monitoring or Re-evaluating your Risk Management program.
Risk management is one of the specialties within the general field of management that in the past was hidden and sometimes taken off the shelf and dusted off. Today this practice is much more in the forefront.
In simple terms, it is the process of making and carrying out decisions that will minimize adverse effects of accidental losses upon an organization. An organization has one or more of a variety of objectives: profit, growth, stable earnings, public service, or the performance of a governmental function, to name just a few. To achieve these objectives, an organization must first reach a more fundamental goal: survival in the face of potentially destructive and crippling accidental losses. Beyond survival, the executive of an organization also may wish to prevent any accidental losses from interrupting the organization’s operations, slowing its growth, or reducing its profits or cash flows by more than a specified amount.