Unit 5.17 - Risk Management

Question 1

What is risk management?

Answer 1

Risk Management is the process of assessing and measuring risk and
developing strategies to protect all interests of a company

Question 2

What are the 4 risk management strategies?

Answer 2

Avoidance - avoid the risk in the first place (ex. if a new manufacturing process comes with risk of injury, choose not to implement that process)

Transfer - ex. a company purchasing insurance to protect itself from liability

Mitigation - two ways:
1. Reduce the probability the risk will occur - ex. safety training, bars on windows, hiring guards
2. Reduce the severity of the damage if the risk does occur - softens the blow if the undesired event happens (ex. hurricane shutters)

Acceptance - accepting the risk as an inevitable part of doing business (ex. using old equipment until it breaks; not assessing it)