Chapter 9
Risk , Financial, Public Relations
and Human Resource
What is Risk Management
Risk management identifies, assesses and controls threats as well
as developing strategies, on how to deal with di erent risks.
● Loss or damage due to fire, floods, theft etc.
● Loss of customers due to changing trends
● Unforeseen circumstances such as the covid-19
Identify di erent risks in order to be well prepared to confront
them and manage with in a cost-e ective manner
Risk management
Identification Risk
To identify a risk a business owner must visualise what the future
may hold for the business.
, Description of risks
● Preventable Risks - arise from within the business,
controllable and can be avoided or managed by changing
structures
● Strategy Risks - takes a risk by implementing a specific
strategy with hope of increasing market share
● External Risks - has no control, aries out of the business, by
political decisions, economic downturns or change in trends
Risk Estimation
Management of a business looks at the probability of certain risks
occurring
Risks Profile
A profile is drawn up by management and it is a summary which
lists all the estimations of what could go wrong
Risk Culture
Part of risk management deals with the culture of a business,Risk
culture: “The norms of behaviour for individuals and groups
within an organisation that. determine the collective ability to
identify and understand, openly discuss and act on the.
organisation's current and future risks”
, Type of Risks
● Strategic Risk - the risk that a strategy becomes less e ective
● Compliance Risk - failing to comply with existing regulations
and laws
● Operational Risk -an unexpected failure in a businesses day
to day operations
● Financial Risk - possibility of a sudden financial loss
● Reputational Risk - reputation is damaged, can lead to an
immediate loss of revenue
Risk Management
When risks are identified then a risk management plan needs to be
drawn up.
1. Risk identification - identify potential risks
2. Risk analysis - insight into the possibility of the risk
happening
3. Risk assessment and evaluation - determine if the risk
is likely to happen and if it's acceptable to take on the
risk for its potential reward
4. Risks mitigation - assess their highest ranking risks and
develops a plan to alleviate them
5. Risk monitoring - follow up and review risk process
Risk , Financial, Public Relations
and Human Resource
What is Risk Management
Risk management identifies, assesses and controls threats as well
as developing strategies, on how to deal with di erent risks.
● Loss or damage due to fire, floods, theft etc.
● Loss of customers due to changing trends
● Unforeseen circumstances such as the covid-19
Identify di erent risks in order to be well prepared to confront
them and manage with in a cost-e ective manner
Risk management
Identification Risk
To identify a risk a business owner must visualise what the future
may hold for the business.
, Description of risks
● Preventable Risks - arise from within the business,
controllable and can be avoided or managed by changing
structures
● Strategy Risks - takes a risk by implementing a specific
strategy with hope of increasing market share
● External Risks - has no control, aries out of the business, by
political decisions, economic downturns or change in trends
Risk Estimation
Management of a business looks at the probability of certain risks
occurring
Risks Profile
A profile is drawn up by management and it is a summary which
lists all the estimations of what could go wrong
Risk Culture
Part of risk management deals with the culture of a business,Risk
culture: “The norms of behaviour for individuals and groups
within an organisation that. determine the collective ability to
identify and understand, openly discuss and act on the.
organisation's current and future risks”
, Type of Risks
● Strategic Risk - the risk that a strategy becomes less e ective
● Compliance Risk - failing to comply with existing regulations
and laws
● Operational Risk -an unexpected failure in a businesses day
to day operations
● Financial Risk - possibility of a sudden financial loss
● Reputational Risk - reputation is damaged, can lead to an
immediate loss of revenue
Risk Management
When risks are identified then a risk management plan needs to be
drawn up.
1. Risk identification - identify potential risks
2. Risk analysis - insight into the possibility of the risk
happening
3. Risk assessment and evaluation - determine if the risk
is likely to happen and if it's acceptable to take on the
risk for its potential reward
4. Risks mitigation - assess their highest ranking risks and
develops a plan to alleviate them
5. Risk monitoring - follow up and review risk process
