Risk Management Essay Example | Topics and Well Written Essays - 250 words

Risk Management - Essay Example on the definition of an organization’s objectives, specification of possible risks to the business, identifying specific risks to each objective and specification of a tool to be used for risk management. One such tool that is used for managing risk in the global business environment is the risk level matrix. The risk level matrix is a matrix that identifies each possible risk to the organization’s objectives and classifies it in terms of consequences and likelihood of occurrence (Hopkin, 2010). The risk level matrix helps the organization determine the level of concern for each risk, where common levels of concern include catastrophic, major, moderate, minor and insignificant. Once the levels of concern have been identified, the organization can then implement preventive or mitigation strategies for the identified risks. This risk management tool is an effective tool in the face of uncertainty in the global economic environment. The risk level matrix helps the organization analyze all possible risk types and prepare an advance plan in case the risk comes to pass (Hopkin, 2010). Other risk management tools do not give the organization the ability to plan ahead for the risks that they might