Meaning and Importance of Risk Management | GRM Institute
Risk Management is a common term in the corporate and non-corporate world currently. You must have heard about it numerous times or have read multiple news, articles on how is it becoming so important and why every other organization is focusing on this particular aspect to run their company. Let’s find out all about it in the following article.
Purnima Singh, who recently finished the Global Risk Management Institute’s (GRMI) post-graduate diploma in risk management (PGDRM) course, shines some light on the topic ‘what is risk management and why is it important’. Before pursuing a risk management career, Purnima completed her B.Com from the SPB college of commerce, she worked as a Junior Accountant at Shailees Export, before pursuing a risk management course and is currently placed in EY Business consulting Risk. According to Shubham PGDRM is one of India’s best job-oriented courses.
Meaning of Risk Management
Importance of Risk Management
No individual can predict risks accurately in this dynamic environment, but organizations need to prepare for an uncertain and volatile future. Organizations are becoming ever so cautious about learning from past mistakes. The scope of legality is increasing owing to business practices such as globalization. Consumers are becoming aware and learned posing threat for businesses not adapting accordingly.
- Implementation of a robust risk management plan will help an organization build policies and procedures around avoiding potential threats and measures to minimize their impact if it occurs.
- It is crucial for any business to know the nature and extent of risk it is prepared to take the level of risk it can tolerate and communicate the same to its employees at all levels of management. This enables limited control all over the organization.
- The ability to understand risks enables the organization to make confident business decisions.
- It protects the organization from the risk of unexpected events that can cause it a financial and reputational loss.
- Planning and developing structures to address potential threats improves the odds of becoming a successful organization.
Thus the practice of risk intelligence and risk management is seen increasing in many industries.
The Global Risks Report 2021 by World Economic Forum
