Importance of Risk Management in an Organisation
In any organisation, risk is the primary source of uncertainty. Risk management is critical for any organisation because it cannot define its long-term goals without planning for risks. It is the process of identifying, analysing, and responding to risk factors that arise during the course of a company's operations. Effective risk management entails influencing future outcomes as much as possible by acting proactively rather than reactively.
As a result, organisations are increasingly focusing on identifying and managing risks before they have a negative impact on their operations. The ability to understand and manage risk enables them to make more confident business decisions in the future and provide them with various options for dealing with potential issues. Risk Management is an important process because it provides a company with the tools to identify and manage potential risks properly.