Risk Management involves active engagement to Measure, Monitor and Control risk.
Risk is most often defined as the range of measured deviations from an expected outcome due to uncertainty; usually measured in dollars and cents, but other measurements are also appropriate. Reducing Risk is nothing more than reducing the range of possible outcomes for a given system or process.
Risk Management can take many forms: Forward contracting to hedge price spikes, or material shortages; zero based budgeting to establish clear operational guidelines; limiting subordinate transaction authority; defining credit thresholds for third party transactions, are all examples of Risk Management actions.
Risk Management is the structured pursuit of identifying, quantifying and then mitigating the risks faced by you or your organization.
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