The four basic flow charts of risk management are as follows:
The four steps of risk management are: risk identification, risk analysis, risk response and risk monitoring.
1. Risk identification
The important characteristic of risk is its uncertainty and potential risks, which are not easy for people to feel or understand. Therefore, the first thing in smart risk management is to identify risks, that is, to identify and distinguish risks according to certain scientific methods. These scientific methods usually include: questionnaire survey, financial statement analysis, organization-related data and document review, equipment and facility self-inspection, expert consultation inside and outside the enterprise, etc. One of these methods can be used for identification, or several methods can be used simultaneously.
2. Risk assessment
Risk assessment is the use of various probability and mathematical statistics methods to calculate the frequency of occurrence of a certain risk and estimate the degree of damage, including the degree of direct damage, for prevention and The amount of people and property expended in dealing with the risk and the extent of indirect losses relative to direct losses. The purpose is to adopt different countermeasures against risks that bring different levels of losses.
3. Risk control
In order to control and reduce risks cost-effectively, it is necessary to adopt different means or measures for different risks.
4. Risk adjustment
This is to examine and evaluate the results of different risk control measures, so as to make appropriate adjustments to the original risk management system. This is an essential step in risk management. Through regular or irregular inspections and evaluations, the entire risk management system is continuously improved to obtain the best cost-effectiveness.