AN ASSIGNMENT ON

“ENUMERATE THE RISK MANAGEMENT PROCESS AND THE ROLE OF RISK

MANAGEMENT OFFICIALS”

SUBMITTED TO

AMITY UNIVERSITY KOLKATA

for the partial fulfilment of the award of the degree

MASTER OF BUSINESS ADMINISTRATON

BY

DEEPA GOENKA

ENROLLMENT NO: A91801922041

BATCH:2022-2024, SEMESTER -4th, SECTION: A

COURSE: RISK MAMAGEMENT (FIBA731)

FACULTY GUIDE: MS. MADHUMITA DAS GUPTA

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY, KOLKATA

Risk management is the process of identifying, assessing and controlling financial, legal,
strategic and security risks 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. Here are the five essential steps
of a risk management process:

Identify risks

The first step in the risk management process is to determine the potential business risks your
organization faces. That requires some context: To consider what could go wrong, one needs
to begin with what must go right. Start the risk identification phase with a review of business
goals and objectives and the various resources or assets that enable them. Risk management
practitioners often apply a top-down, bottom-up approach to thinking about what might impede
those objectives.

Analyze the risks

The second step of the risk management process is to analyze how likely it is that a risk will
occur and whether it will have a measurable impact on the organization. It involves calculating
the probability of a risk event or scenario and estimating the potential consequences if that
happened.

Prioritize risks based on business objectives

The results of the risk analysis stage enable the various risks to be sorted and ranked based on
their importance to the organization. Since risk management resources are likely to be limited,
risk evaluation and prioritization highlights the risks that are most likely and would be most
impactful. Plotting the results in a risk heat map -- also known as a risk assessment matrix
which helps to visualize the relative importance of each risk. That can benefit both the risk
management team and business stakeholders, including those who may be providing or
authorizing resources to respond to the risks.
Treat the risks

With a prioritized list of risks in place, the next step is to evaluate the options available to treat,
or respond to, the risks and decide which approach to apply in each case. Potential risk
treatment actions including the following:

• Risk acceptance. If a risk is deemed to be acceptable based on business

leadership's risk appetite, no further treatment is necessary.

• Risk sharing or transfer. This involves sharing some of the potential impact of a
risk with another entity, such as an insurance firm or an external service provider -
- or, if possible, completely transferring responsibility for the risk to that entity.

• Risk mitigation and control. Where practical, various risk mitigation measures and
management, technical and administrative controls can be applied to help reduce
the likelihood or impact of each risk to an acceptable level.

• Risk avoidance. If none of the other options are feasible, risk managers must
implement risk avoidance measures to eliminate the activities or exposures that
would enable a particular risk scenario.

Monitor and review risk management results

After the above steps are completed, the results of initiatives must be tracked and monitored to
ensure that risks are managed effectively and remain within acceptable limits. In addition, risk
conditions can change rapidly, the value of strategic assets can fluctuate and the risk
preferences of business executives can evolve. A critical part of risk monitoring and review is
ensuring that business managers and senior leaders are informed about progress toward risk
management goals and any relevant changes that might have organizational impact.
Risk management officials play a vital role in safeguarding organizations from potential harm.
Their roles can be broadly categorized into three main areas: identifying risks, mitigating risks,
and monitoring risks.

1. Identifying Risks:

• Risk managers constantly scan the environment, both internal and external, to pinpoint
potential threats. This includes analyzing financial markets, legal landscapes,
operational procedures, and even employee morale.
• They stay updated on industry trends and anticipate potential disruptions that could
throw the organization off course.

2. Mitigating Risks:

• Once a risk is identified, risk management officials assess its likelihood and potential
impact. They then develop strategies to lessen the impact or even eliminate the risk
altogether.
• This might involve implementing stricter safety protocols, diversifying investments, or
developing contingency plans for emergencies.
• Risk managers may also work with compliance officers to ensure the organization
adheres to regulations that can help mitigate certain risks.

3. Monitoring Risks:

• Risk management is an ongoing process. Officials continuously monitor identified risks

and the effectiveness of implemented mitigation strategies.
• They track key risk indicators (KRIs) to gauge if a risk is escalating or if adjustments
need to be made to the mitigation plan.
• By keeping a watchful eye, they can identify new or unforeseen risks and ensure the
organization remains proactive in its approach to risk management.

In essence, risk management officials are the organization's forward-looking guardians. They
work diligently to protect the company from financial losses, reputational damage, operational
disruptions, and other potential setbacks. Their efforts contribute to the organization's stability
and its ability to thrive in an uncertain world.