The stages of the risk management process
Risk management is the making of decisions regarding risks and their subsequent
implementation, and flows from risk estimation and risk evaluation (The Royal
Society, 1992, p. 3). The risk management process is focused on understanding the
risks, and minimizing their impact by addressing, e.g. probability and direct impact.
The stages of the risk management process discussed can vary from risk
identification/analysis (or estimation) via risk assessment (or evaluation) to different
ways of risk management (labels differ among authors although the steps are similar).
Parallel to risk management is the issue of how to mitigate the consequences of an
accident if it does happen: to deal with the situation in a way that minimizes business
impact. This is normally referred to as business continuity management (BCM) and
relates to those management disciplines, processes and techniques, which seek to
provide the means for continuous operations of essential functions under all
circumstances (Hiles and Barnes, 2001, p. 379). BCM aims at getting interrupted
Figure 1.
Risk map/matrix
Ericsson’s
proactive
approach
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businesses restarted. In many ways, risk management and BCM are overlapping, and
some argue that business continuity plans development is the risk management action
to take for risks of low probability (such as fires and floods), but whose potential
impact is a business failure