"Business Risk Management – Why Do You Need It?Every business and organization, whether big or small, experiences one risk or the other. Itaffects their normal day to day operations and impacts the output and profits. Risks alwayshave negative impact such as robbery or employee absenteeism. It differs from organizationto organization. Risk causes uncertainty and huge losses in terms of money. Through riskmanagement, businesses can identify, analyse, and control the factors that can leavenegative impacts on them. It can save the business from loss and lessen the damage tosome extent. Risk management involves proper investigation, evaluation andcommunication. Many organizations have risk management teams to look into the issueswhich can leave disastrous impact. There are a whole lot of sources that cause risk, internaland external. Internal sources are made up of negligence and slackness. The employeesdon’t take the rules and regulations seriously. They leak the company’s vital information. Itarises from within the company or organization and is manageable.On the other hand,external sources are something which the company has no control over such as the nation’seconomic status, political issues and exchange rates etc. Apart from the stated, risks fall intothe following categories:i. Financial – fiscal dealings and accountsii. Calculated – organization’s objectives, strategic plans and decisionsiii. Environmental –this falls under external source but every business and organizationneeds to be aware even though they have no control over it. It includes unforeseenclimatic conditions and forest fires etc.iv. Compliance –laws, rules and regulations. Every organization has a policy andstandard procedure v. Operational –day to day workings and functionsvi. Reputational –goodwill and image The risk management team monitors and reviews all risks. It helps the organization growand develop. Moreover, the team provides some sort of a security, that things can becontrolled. It is in the organization to tackle whatever risk may come. Role of Risk Management TeamRisks make every business and organization insecure over the uncertainty. They are not ableto function fully, thus, they are not confident. This is the main reason they should have a riskmanagement team. It will oversee all the uncertainties and risks. The risk managementteam:- Investigates and identifies the potential risks- Works to develop a plan or strategy - Shares the risks with the senior members of the organization/makes the boardaware- Comes up with ways to minimize the effect of the risk or comes up with solutions- Must understand the business or organization- Work with the employees- Make the employees aware of the situation- Provide training- Implement policies to help and restructure the organization The organization should make available resources and funds for the risk management teamto function well. The team sees into a lot of things such as policy making, strategic planning,extenuating risks and putting in place counter-plans. Risk management is not somethingthat can be achieved over a period of months. It’s an on-going process. Organizations mustbe ready to look for extra funds or resources because it’s for their own good. They cannotrisk it. Research has revealed that organizations that do not have a risk management teamare in danger of collapsing. Most of the risks are avoidable and preventable. It has beenseen that negligence and laziness have often led companies into great loss. Employees arenot taken care of. They are not respected. The seniors have communication problems withthe juniors. They are not able to reach out. Risk management teams handles internal andexternal matters. It takes everything into consideration then finds a lasting solution. Theemployers can sit back and relax as their work will be done. But they have to keep in mindthat it’s a continuous process. A company needs the risk management team throughout itslife. This is because every day something new comes up. This is the same for risks; every daya new risk surfaces; organizations should be ready to tackle it. Overall, the role of the riskmanagement team is to assess and manage risks. It has to identify, analyse and help theorganization get through it. Sometimes, risks cannot be completely wiped out, but its effectcan be reduced to some extent. It will provide relief to the organization. All members oremployees of the organization should work hand in hand with the risk management team. Itis for everyone’s wellbeing and the organization as a whole. If everyone does their part, riskscan be handled effectively. Reference "