Course: Financial Risk Management

Unit No.: 01
Lecture No.: 02
Topic: Need for Risk Management

By
Mr. Srinu Madem
MBA, M.Phil., (Ph.D)
Assistant Professor
Department of Management Studies
Vignan’s Institute of Information Technology
 Lecture Objectives
1. Tounderstand the need for Risk
Management
 Introduction
Risks management is an important process because it empowers a
business with the necessary tools so that it can adequately identify and
deal with potential risks.

Risk management provides a business with a basis upon which it can

undertake sound decision-making.
 
For a business, assessment and management of risks is the best way to
prepare for eventualities that may come in the way of progress and
growth.
 
In addition, progressive risk management ensures risks of a high priority
are dealt with as aggressively as possible.

The management will have the necessary information that they can use to
make informed decisions and ensure that the business remains profitable.
 Need for RM
Three Ways Risk Management Plans Improve a Company

1. A Risk Management Plan Makes for Consistent and

Efficient Operations

2. A Risk Management Plan Leads to More Satisfied

Customers

3. A Risk Management Plan Gives You a Healthier Bottom

Line
Other important benefits of risk management include:
Creates a safe and secure work environment for all staff
and customers.
Increases the stability of business operations while also
decreasing legal liability.
Provides protection from events that are detrimental to
both the company and the environment.
Protects all involved people and assets from potential
harm.
Helps establish the organization's insurance needs in
order to save on unnecessary premiums.
 Conclusion
Risk management encompasses the identification,
analysis, and response to risk factors that form part
of the life of a business. Effective risk management
means attempting to control, as much as possible,
future outcomes by acting proactively rather than
reactively. Therefore, effective risk management
offers the potential to reduce both the possibility of
a risk occurring and its potential impact.
Disclaimer

All the images, videos embedded in this

presentation are collected from various
internet sources for fair usage of
developing educational content and is not
used for commercial purposes.
Thank You