Defining and managing risk: What is risk management?

Risk management is part of managing a company. In addition to its usefulness and importance, risk management helps to improve a company’s performance and efficiency.

In risk management, security requirements are implemented and unforeseeable events are better assessed or even avoided, which helps to protect a company’s objectives and systems.

The objective of risk management is to enable companies to:

  • identify and find
  • evaluate
  • overcome
  • monitor

The main risks

If the company is able to keep risk under control, there will be markedly fewer residual risks to handle. Moreover, a company can concentrate on its priorities rather than emergencies, as it will gain more room for maneuver.

What is a risk? How can it be managed?

Risks are the result of human actions and are not linked to chance. If risks are understood, they can be reduced or even avoided.

A risk is considered to be any event or action that might prevent fixed objectives from being reached or the company’s strategy from being implemented. Positive deviations are generally viewed as an opportunity, while negative deviations are viewed as a risk. Opportunities are often taken into account in the strategic process. Negative deviations (risks) are handled in the risk management process.

Top tip: nearly all risks are the result of human actions and, therefore, can be influenced. Risks are not linked to chance. Even natural disasters cause damage, but there are ways and means to help you protect your business from them and, above all, prepare for the consequences.

Last modification 07.05.2021

Top of page