ContentFy ? Kinds of Risk Management

Earlier we discussed what risk management is. Today we?ll discuss the kinds of risk management. Enterprise risk management, Operation risk management and financial risk management are few kinds of risk management.

The techniques and procedures used by the organizations to cope with the factors of the risks and to grab the chances in order to fruitfully accomplish the goals and objectives of the organization in a particular business are termed as Enterprise risk management.? A framework comprising of state of affairs, situations and chances of opportunities that evaluates the features to what extent it influences along with the shaping and observation of the progress and response of the strategy related to the achievement of the objective of organization is actually a structure that Enterprise resource management is responsible for providing to risk management. Enterprise resource management provides security to the organization?s stake owners, workforces, clients, supervisory body and society etc. by highlighting the opportunities along with the risk and its long term impact on the business.

In other words Enterprise risk management ?can also be referred as approach that manages the organization?s incorporating thoughts and implementation of strategic planning that seriously involves risks. The inspection on the risk management techniques of the organizations are more increased by the managers, supervisors and debt grading organizations.

Another type of risk management is Operational Risk Management (ORM). Operational risk management is kind similar to the enterprise risk management and is defined as a cycles of processes that includes identification and evaluation of risk management, the decisions to be made for the risk and finding ways to control the risk which benefits in a way that either a risk could be avoided, less bearable or could be modified. Operational risk due to the human factors, internal processes or exterior dealings also comes under Operational risk management that could be oversight. Operational risk management is follows four principles.

1. One of which is that there is no need to accept an unnecessary risk.
2. If the risk is balanced by the cost then accept such risk.
3. Planning for the management and anticipation of the risk should be done.
4. At the right level of time the decisions of the risk should be made.

Operational risk management is further divided into three levels. The first is an in depth level where before the implementation of the project in depth level of risk management is done including the fact that the project has a lot time to be planned and prepared. Training, drafting, requirements and instructions are few examples of in depth risk management methods. At routine periods where projects are implemented at moderate time deliberate operational risk management which is the second level of operational risk management is used. Quality assurances, safety checks and on job training are few examples. Time Critical is the third level of operational risk management and is used at the operational level of the tasks when they are executed. It has proved to be the most effective by individuals as it help achieving the task or mission safely. Check list, Check management is the examples of the few tools used.

One more another kind of risk management is the financial risk management. The exercise of developing economic value in an organization by the help of financial instruments in order to accomplish risks that are exposed predominantly market and credit risks are termed as Financial Risk Management. Financial risk management processes are more similar to the general risk management as of identification, evaluation and planning of the risk in order to control them. The main aim of using financial risk management is to focus at what time and through what means to hedge in the market and this is done by using financial instruments. Qualitative and quantitative both of the kinds are found in financial risk management. Basel Accords are generally implemented internationally by the banks in the banking sectors. It helps identifying the credit, market and operational risks.

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Source: http://contentfy.com/kinds-of-risk-management/

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