[Term of the Day]: Risk Management

Term of the Day

“Risk Management”

Definition — What is Risk Management?

Risk management is the process of planning, organizing, directing, and controlling the human and material resources of an organization. Every business and organization faces the risk of unexpected, harmful events which impact on the achievement of specific objectives. They can be either a negative or positive impact. The negative impact represents risks that may prevent the creation of value or even destroy existing value. Positive impacts may offset the negative impact or could present opportunities, influencing in creative thinking and innovation.

Risk management is an organizational model aimed at developing and improvising the quality of management processes. It is designed to do more than just identify the risk. The system must also be able to quantify the risk and predict the impact of the risk on a particular project.

Therefore, risk management helps organizations bring about a higher level of quality of services and products because it supports the decision-making processes, preparing for the difficulties that could hinder the achievement of the strategic goals.

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