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Vital concepts of Risk Management | MIT School of Distance Education

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Risk management is the process of identifying and controlling any potential threats to an organisation’s assets, resources and capital. It includes forecasting potential risks like financial uncertainties, strategic management errors, legal liabilities, accidents and natural disasters, and making certain provisions to manage them. MITSDE, Pune offers Distance Learning Courses in Management, Distance Education Courses, Distance MBA, Correspondence MBA Equivalent Courses and other Post Graduate Diploma Courses – PowerPoint PPT presentation

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Title: Vital concepts of Risk Management | MIT School of Distance Education


1
Vital Concepts of Risk Management
  • https//www.mitsde.com

https//www.mitsde.com
2
Vital concepts of Risk Management
It includes forecasting potential risks like
financial uncertainties, strategic management
errors, legal liabilities, accidents and natural
disasters, and making certain provisions to
manage them.
3
The Elements Of Risk Management
Risk identification Businesses operate in a
dynamic and ever-changing environment which is
laden with different kinds of risks that
ultimately result in financial losses. Thus,
identifying a potential loss is imperative. We
need to identify and understand the risk
thoroughly before we can move forward and decide
how to deal with it. A risk manager specializes
in detecting risk exposure areas. His job
includes devising and implementing appropriate
techniques to identify the risks.
4
  • Risk evaluation
  • In order to understand how to control the
    expected losses, we need to evaluate the
    potential risks. The risk manager should have a
    clear understanding of the risk- how badly it can
    affect the business. He should understand its
    impact on the business and its probable frequency
    of occurrence. The evaluation is done using both
    the qualitative and quantitative methods.
    Qualitative evaluation is based on past
    experiences of the risk manager. He evaluates the
    possible effects of specific events on the
    enterprise. On the other hand, quantitative
    evaluation works on accuracy. It produces a more
    developed risk model with accurate projections,
    depending on the quality of the input data. At
    times, these two methods are used together in
    order to produce a fairly comprehensive risk
    analysis.

5
  • Risk control
  • Risk control includes two aspects- loss
    prevention and loss reduction. A risk manager
    cannot completely prevent a loss in a given area,
    but a sound risk management can decrease the
    frequency of loss in that area. It also includes
    taking measures that reduce the cost and severity
    of the losses. Decreasing the frequency of losses
    and reducing their severity once they occur are
    the two major goals of risk control. Another way
    of preventing loss is by eliminating the risks.

6
  • Certain steps can be taken to prevent the
    occurrence of risks. These include
  • Risk avoidance A risk can be avoided by changing
    the location, procedure or equipment or by giving
    up an activity that gives rise to risk in a
    business.
  • Risk reduction Risk can always be reduced by
    taking certain steps like installing security
    devices, inspections, security patrol, and
    keeping a check on the employee.
  • Risk retention It includes building up a
    contingency fund to finance the loss incurred.
    This is the financial risk control aspect. A
    sound risk management ensures the identification
    of risks and creating appropriate financial
    reserves for dealing with the expected or
    incurred loss.

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  • Risk financing
  • After identifying and evaluating the risk,
    you need to minimize the loss in a proper manner.
    For that, the manager must cover the risk with
    insurance or with a combination of both insurance
    and risk retention methods.

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Conclusion
  • Thus, when a business makes an investment
    decision, it exposes itself to a number of
    financial risks. In order to minimize and control
    the exposure of businesses investments to such
    risks, fund managers and investors practice risk
    management. Risk identification, Risk evaluation,
    Risk control, Risk financing these are Vital
    concepts of Risk Management
  • If you are eyeing to shape your career in the
    field of risk management, then you should pursue
    MIT-SDEs 18-months Post Graduate Diploma in Risk
    Management.
  • MITSDE, Pune offers Distance Learning Courses in
    Management, Distance Education Courses, Distance
    MBA, Correspondence MBA Equivalent Courses and
    other Post Graduate Diploma Courses

9
THANK YOU !!
Website https//www.mitsde.com Toll-Free No.
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