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Role of Risk Management

This will be a short article about risk manegement role. Will try to point out few important things that risk management department has to do so with other words what is their role in the company management.[ad#ad-4]

Many would say that risk management is connected with investments. That is actually correct, but I would rather say that risk management is connected with business decisions. Everything a company does (ussually it does investments), risk management department should be involved. The main role of risk management is to manage risk of course. They need to calculate the risks that come with this decision and they decide or present the information to top management to decide if this is a good business choice or not.

Every time when we are making a business decision, we have risk on other hand and profits on other. Risk management is all about making a decision whether profits of this “investment” will be bigger than the risks we have to take when making the investment. Of course when the risk is higher, we will want bigger profit. Otherwise we would take smaller risk (if it would give us even bigger profit).

Risk management is a very important part of every decision and we should do risk management in our every day decisions as well. No matter what we do, this will eventually bring us some “good” but there is always some risk that it won’t and that it will bring us something else instead. So do the risk management and make smart decisisons.

Written by: Matt

We also suggest this relevant article if you have time: Ten Management Roles by Henry Mintzberg

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