Importance of Risk Management Plan in Organizations

Running Head: RISK MANAGEMENT 1
EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
A Risk management plan is a document that contains various approaches to be adopted by the
company to be ready for the speculated risks within the organization(Kendrick, 2015).The
process of risk management entails: identification of the potential business risks, a thorough
analysis of the identified risks, evaluation of the risks and plan efficient strategies for each risk
according to the likelihood of occurrence of each potential risk, manage the risks through various
strategies such as: risk avoidance where an activity is eliminated or a venture is stopped when the
risk is ought to be greater and a loss of greater consequences than the accrued benefits in relation
to the activity. Risk transfer is another strategy for risk management where an insurance
company is involved where the insured paid the required premium to enhance compensation by
the insurer during the occurrence of the risk. Risk retention is another strategy applied in risk
management where the organization decides to venture into an activity by the fact of being
corporate to the organization’s program despite of the risks involved as the organization seeks on
how to mitigate such risks in future. The last process of risk management is monitoring and
reviewing the results as a result of implementation of all the previous steps and the outlined
strategies.