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5. Risk management

The identification, analysis and response to the risk elements integral to the business’s operations are all part of risk management. Effective risk management involves acting proactive rather than reactively in order to influence the future of circumstances as much as is feasible. Therefore, effective risk management can be used to decrease the probability of a disaster occurring and the potential negative consequences. Risk management frameworks are designed to go beyond determine the current risk. The uncertainty should be calculated and their effect on the firm must be predicted using a sound framework for risk management. The final result is a decision whether to accept risks avoiding them. The thresholds for risk tolerance that the company has established to determine whether risks are taken or not. The risk management frameworks can help other risk mitigation methods in the event that a business creates the process of risk-management as a systematic and continuous procedure with the purpose of detecting and addressing problems. Cont…