Introduction:The method of recognising, evaluating, and managing risks to an organization'sresources and profits is known as risk management. These challenges or hazards mayarise from a range of causes, such as financial volatility, legal obligations, strategicmanagement mistakes, incidents, and natural disasters. IT security vulnerabilities anddata-related risks, as well as risk control techniques to reduce them, have risen to thetop of the priority list for digitized enterprises. As a result, businesses' mechanisms fordetecting and monitoring risks to their digital properties, such as confidential businessrecords, a customer's personally identifiable information (PII), and intellectual property,are gradually being used in risk management programs. Any corporation andorganisation faces the possibility of unanticipated, damaging incidents that might costthem revenue or force them to close permanently. Risk assessment enables businessesto brace for the unexpected by reducing risks and additional expenses before theyoccur.An company can save money and secure the prospects by adopting a risk managementstrategy and considering the multiple possible threats or incidents before they arise.This is because a solid risk control strategy would assist an organisation in establishingpolicies to prevent future risks, mitigate their effect if they do exist, and deal with theconsequences. Organizations will be more secure in their strategic choices if they canconsider and manage risk. Furthermore, sound corporate governance practices thatemphasise on risk control will assist an organisation in achieving its objectives.Literature review:The probability theory and decision-making under uncertainty are the foundations of riskassessment. The predicted utility principle, the theory of bounded rationality, andprospect theory, in particular, had a big impact. The concept of expected utility theorystates that people make decisions dependent on the expected utility of various options.The theory of bounded rationality notes that in the physical world, multiple outcomesand their probabilities are difficult to comprehend. Prospect theory aids in simulating theimpact of human experience on decision-making. (Misra, & Kumar, 2006).1

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Risk Management Plan for a Small Business

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