Risk management

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Risk Management

Risk Management (pronounced: rɪsk mænɪdʒmənt) is the process of identifying, assessing, and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents, and natural disasters.

Etymology

The term "Risk Management" is derived from the combination of the words "risk" and "management". The word "risk" comes from the early Italian risicare, which means 'to dare'. In this context, risk is a choice rather than a fate. The term "management" comes from the Latin word manus, meaning 'hand'. It refers to the act of handling, controlling, directing, or conducting affairs.

Related Terms

  • Risk: The possibility of loss, injury, disadvantage, or destruction.
  • Management: The process of dealing with or controlling things or people.
  • Risk Assessment: The identification and analysis of relevant risks to the achievement of objectives.
  • Risk Mitigation: The process of reducing the impact of a risk or the likelihood of its occurrence.
  • Risk Transfer: A risk management and control strategy that involves the contractual shifting of a pure risk from one party to another.
  • Risk Retention: The acceptance of the loss, or benefit of gain, from a risk when it occurs.
  • Risk Avoidance: The elimination of hazards, activities, and exposures that can negatively affect an organization's assets.

See Also

References

External links

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