Six steps in the risk management process
Six steps in the risk management process
Topic A: Risks in a Funeral Home
Topic A: Initial Post
Explain the 6 steps in the risk management process
Step 1: Identify and understand risks: In order to decrease the chances of disregarding significant risks, a business must develop a well-organized approach to identifying risks. Some of the methods that can be used to identify risks include questionnaires, analysis of financial statements, and insurance policy checklists.
Step 2: Evaluate the potential severity of risks: After identifying risks, the responsible person should evaluate them in terms of the potential loss they might cause as well as their possibility of occurrence. Risks can be classified into three groups namely, critical, extremely important, and moderately important.
Step 3: Select methods to manage risk: Two main approaches that can be used to manage risks include risk control and risk financing.
Step 4: Implement the decision: Read more
Step 5: Take action: Once the decision has been made to use a particular technique or techniques to manage a firm’s risks, this decision must be followed by action, such as purchasing insurance and setting aside dedicated funds to cope with any risks that have been retained.
Step 6: Review and evaluate: Read more
References
Longenecker, J. G., Petty, W. J., Palich, L. E., & Hoy, F. (2019). Small Business Management: Launching & Growing Entrepreneurial Ventures (19th ed.). Boston, MA: Cengage Learning.
Sidorenko, A. (2019). 30 PRACTICAL STEPS TO IMPLEMENT RISK MANAGEMENT 2. FOLLOW THESE STEPS TO INTEGRATE RISK MANAGEMENT INTO DECISION-MAKING, PROCESSES AND CULTURE. EDPACS, 60(1), 11-18.
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