Risk Management Overview

Risk Management Overview

Margaret Soyster

August 27, 2012

FIN/415

FRANK MASI

Risk management is a process used to systematically manage exposure to risk.  Most frequently the term risk management is referring to businesses only and the management of pure risks.  Traditional risk management seeks to minimize the cost of pure risk to an organization.  Currently organizations are broadening the ways they view and manage different types of risk.  The intent of now managing all forms of risk is reflected in the terms enterprise risk management and integrated risk management (Trieschmann, Hoyt, & Sommer, 2005). Risk management has become an important success within companies in a competitive market. Being able to identify the threats and opportunities within a business is a crucial part of risk management. This allows the company to create the procedures and processes that will help them maximize their opportunities and minimize their threats. Different companies treat risk management differently. Many companies have separate department that solely deals with risk management, where other companies add it to their everyday practices. AutoZone incorporated a risk management department to help structure all their departments. In doing this it has allowed AutoZone to maximize their opportunities and minimize their threats.

Organizational risks are related to the information systems, organizational governance, and the operations. Risk management needs to be part of all business areas and processes. Organizational risk management is related to the organization entirely. Within AutoZone the audit internally is important in identifying the risks within every department. Performing an internal audit helps reduce the risk of safety, fraud, workforce issues, and security breach. This shows AutoZone approaches risks from an organizational standpoint.

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