Risk management in an ethical way

"Never take a look at the depth of a watercourse with each feet" - Warren Buffet on taking risks.

Risk management is an essential part of modern business environment. We should take analyze risks before starting a business as well as when our business is in a stable mode.

Proper care should be taken care of business ethics while preparing a risk management plan. Because loss of morality and ethics is one of the biggest risks while running a corporation in this cut throat era, where all are running to maximize profits.

Definition: In business, risk management is defined as the process of identifying, monitoring and managing potential risks in order to minimize the negative impact they may have on an organization. Examples of potential risks embody security breaches, data loss, cyber attacks, system failures and natural disasters.

If we have a smooth flowing business and going to take any major event then we should proceed by taking following steps.

Step 1: Identify the Risk.

Step 2: Analyze the risk.

Step 3: Evaluate or Rank the Risk.

Step 4: Treat the Risk.

Step 5: Monitor and Review the risk.

It's not always possible to follow these steps successfully while taking care of business ethics, so we need to keep following terms in mind.

*Risk Avoidance

Avoid those components and activities that might carry a risk.

*Risk Retention

Accept some or all the implications related to a specific risk.

*Risk Transfer

Transfer the risk to a third party. For e.g. transferring the event security responsibility to a security agency.

*Risk Reduction

Reduce the chance related to a specific component or activity by developing a good contingency action set up.