Risk Management is a separate discipline that looks into all the possible aspects and reasons which could count as a risk in a particular background. The aim of risk management is to preempt any incident that might take place, and it focuses on the principle of prevention rather than correction. Risks are of different types, there could be risks towards the financial side of an organization, or the data contained by the department, or the risk of loss of experts and personnel due to various reasons (Hopkin,2012).
Risk management techniques focus on a couple of simple and basic questions which pertain to the identification of source of risk. Once the source is determined, their impacts are evaluated, in case of extremely busy lines as is the case in few industries, prioritization is performed, and after that the probable solutions are devised.
Various techniques are being used in the field of risk management, however the first and foremost step towards risks mitigation is its identification. it is a normally being said that solution to the problem lies in identifying the problem first.( Ziegler, pg 255, 2005) The same mechanism follows in the case of risk. A proper risk management approach should be adopted. Internationally and professionally there are a large number of measurement techniques for risk. After the step of identification, analysis is conducted which mainly includes understanding the nature and level of severity of a particular risk. All possible impacts and dimensions of the risk are studied and their possible impacts are studied as well.
It is a bottom up approach that performs the evaluation keeping in mind all the possible factors that could create any risk. It looks into the processes, products and individuals which could generate any risk.