Risk Management Is Essential For Every Organization

Risk management is the discipline by which an organization identifies, assesses, controls, measures and monitors variety of risks and opportunities for the purpose of achieving maximum sustainable firm’s value (AIRMIC et al 2010). The concept of risk management has been embedded in corporate governance many years ago. Many organizations all over the world, particularly large or multinational organizations, which aware of the uncertainty have integrating risk management into their governance practices. Moreover, in the aftermath of global financial crisis 2008, the bankruptcy of large companies as well as the closure of small firms underline the importance of adequate risk management (AIRMIC et al 2010). In short, risk management is vital for every organization in order to survive in the uncertain environment. â€Å"Risk management starts with a review of all relevant information, particularly from combined risk assessment, consisting of both risk assessment and concern assessment where the latter is based on risk perception studies, economic impact assessments and the scientific characterization of social responses to the risk source† (Aven and Renn 2010, p. 121). Lots of benefits are recognized from effective risk management, including enhanced decision making, improved operational efficiency, competitive advantage, better reputation, and for public service organizations, political and community support will enhance (AIRMIC et al 2010). 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