Phases of Risk Management

ABCD.

Risk management provides an approach for individuals and groups to make a decision on how to deal with potentially harmful situations.

Following are the four phases involved in risk management: 1

Risk identification: The first thing we must do in risk management is to identify the areas of the project where the risks can occur.

This is termed as risk identification.

Listing all the possible risks is proved to be very productive for the enterprise as we can cure them before it can occur.

In risk identification both threats and opportunities are considered, as both carry some level of risk with them.

2

Risk Assessment and Evaluation: Risk assessment use quantitative and qualitative analysis approaches to evaluate each significant risk identified.

3

Risk Prioritization and Response: As many risks are being identified in an enterprise, it is best to give each risk a score based on its likelihood and significance in form of ranking.

This concludes whether the risk with high likelihood and high significance must be given greater attention as compared to similar risk with low likelihood and low significance.

Hence, risks can be prioritized and appropriate responses to those risks are created.

4

Risk Monitoring: Risk monitoring is an activity which oversees the changes in risk assessment.

Over time, the likelihood or significance originally attributed to a risk may change.

This is especially true when certain responses, such as mitigation, have been made.

The correct answer is: A. Assessing risk, B. Prioritization of risk, C. Identify risk, and D. Monitoring risk.

Explanation: Risk management is a continuous process that involves various phases to identify, assess, prioritize, mitigate, and monitor risks in an organization. The following are the phases of risk management:

A. Assessing risk: This phase involves identifying potential risks and their impact on the organization. It includes identifying the likelihood of risks occurring, assessing the impact of risks on the organization, and evaluating the effectiveness of current controls to manage the risks.

B. Prioritization of risk: Once the risks are identified and assessed, they need to be prioritized based on their severity and likelihood of occurrence. Prioritization helps organizations to focus on the most critical risks that require immediate attention and resources.

C. Identify risk: This phase involves identifying potential risks that could impact the organization's objectives. This includes understanding the internal and external factors that could cause risks and their impact on the organization's goals.

D. Monitoring risk: After the risks are identified and prioritized, organizations need to monitor them continuously to identify any changes in the risk landscape. This helps organizations to take timely actions to mitigate risks and ensure that the risks are managed effectively.

E. Developing risk: The option "Developing risk" is not a valid phase of risk management. It is unclear what this option is trying to convey.

In conclusion, the phases of risk management involve assessing risk, prioritizing risk, identifying risk, and monitoring risk. These phases are critical in ensuring that organizations can manage risks effectively and achieve their objectives.