# risk management

> management to identification, evaluation, and prioritization of risks

**Wikidata**: [Q189447](https://www.wikidata.org/wiki/Q189447)  
**Wikipedia**: [English](https://en.wikipedia.org/wiki/Risk_management)  
**Source**: https://4ort.xyz/entity/risk-management

## Summary  
Risk management is the process of identifying, evaluating, and prioritizing risks to enable informed decision-making and minimize negative impacts on organizations. It is a critical component of broader management practices, integrating with fields like quality management, finance, and crisis mitigation. Effective risk management ensures organizational resilience and aligns with strategic objectives across industries.

## Key Facts  
- **Definition**: Process focused on risk identification, evaluation, prioritization, and mitigation.  
- **Aliases**: "Managing risk."  
- **Parent Disciplines**: Quality management, general management, control, industrial engineering and management.  
- **Subsidiary Practices**: Risk analysis, risk assessment, risk communication.  
- **Related Fields**: Academic discipline, field of study, climate change mitigation, environmental health and safety.  
- **Connected Organizations**: Mercer, Lloyd’s Register, BlackRock, Deloitte, Willis Towers Watson.  
- **Key Methodologies**: Enterprise risk management, financial risk management, IT risk management.  
- **Applications**: Business continuity planning, disaster recovery, regulatory compliance, insurance.  
- **Wikipedia Title**: "Risk management" (55 sitelinks).  
- **Notable Tools/Strategies**: Hierarchy of hazard controls, ostrich algorithm, self-insurance, warning systems.  

## FAQs  
- **What are the core components of risk management?**  
  Risk management involves identification, evaluation, prioritization, and mitigation of risks through practices like risk analysis, assessment, and communication.  

- **How does risk management relate to other disciplines?**  
  It intersects with quality management, crisis management, and regulatory compliance, serving as a foundational practice across industries like finance, healthcare, and engineering.  

- **Which organizations utilize risk management?**  
  Global firms such as BlackRock, Deloitte, and Lloyd’s Register employ risk management strategies, as do specialized entities like the Piton de la Fournaise Volcano Observatory.  

- **What are common risk mitigation strategies?**  
  Tactics include insurance, self-insurance, backup sites, fault tolerance systems, and regulatory compliance protocols to address operational, financial, and environmental risks.  

## Why It Matters  
Risk management is essential for organizational survival and growth, enabling entities to anticipate threats, capitalize on opportunities, and ensure regulatory adherence. It reduces vulnerabilities to financial losses, operational disruptions, and reputational damage, playing a pivotal role in sectors like banking, healthcare, and climate adaptation. By systematically addressing risks, organizations enhance decision-making, protect assets, and build stakeholder trust, driving long-term sustainability in volatile environments.

## Notable For  
- **Cross-Disciplinary Integration**: Combines principles from quality management, engineering, and finance.  
- **Global Adoption**: Implemented by multinational firms (e.g., BlackRock, Deloitte) and specialized institutions (e.g., Willis Towers Watson).  
- **Adaptive Frameworks**: Includes methodologies like enterprise risk management (ERM) and climate risk management.  
- **Regulatory Alignment**: Ensures compliance with laws and standards, reducing legal and financial exposure.  
- **Innovative Strategies**: Employs tools such as risk-based inspection, IT risk management, and hierarchy of hazard controls.  

## Body  

### Parent Disciplines & Core Principles  
Risk management is rooted in **quality management**, which focuses on product/service reliability, and **general management**, which oversees organizational strategy and coordination. It also draws from **control** (supervision of systems/processes) and **industrial engineering and management**, applying technical expertise to operational risks. These foundations emphasize proactive governance and resource optimization.  

### Subsidiary Practices  
- **Risk Analysis**: Systematic identification and evaluation of risks.  
- **Risk Assessment**: Evaluation of risks against predefined criteria (e.g., likelihood, impact).  
- **Risk Communication**: Facilitating informed decisions through transparent risk information sharing.  

### Related Fields & Applications  
Risk management intersects with **academic disciplines** and **fields of study**, serving as a teachable framework in business and engineering. It supports **climate change mitigation** by addressing environmental hazards and **environmental health and safety** (EHS) protocols. Practical applications include:  
- **Financial Risk Management**: Mitigating market, credit, and operational risks (e.g., asset-liability management).  
- **Crisis Management**: Addressing disruptions through evacuation plans, backup sites, and recovery protocols.  
- **Regulatory Compliance**: Ensuring adherence to laws and standards (e.g., postmarketing surveillance in pharmaceuticals).  

### Organizational Use Cases  
Global entities integrate risk management into core operations:  
- **BlackRock**: Employs financial risk management to navigate market volatility.  
- **Deloitte**: Provides consulting services on enterprise risk management (ERM) and internal audit systems.  
- **Lloyd’s Register**: Applies risk-based inspection in industrial settings (e.g., pressure vessels, piping systems).  
- **Willis Towers Watson**: Specializes in insurance broking and risk mitigation for businesses.  

### Methodologies & Tools  
- **Enterprise Risk Management (ERM)**: Holistic approach aligning risk strategies with organizational goals.  
- **IT Risk Management**: Securing digital infrastructure against cyber threats and data breaches.  
- **Hierarchy of Hazard Controls**: Prioritizing elimination, substitution, and engineering controls to reduce exposure.  
- **Ostrich Algorithm**: A controversial strategy of ignoring low-probability risks.  

### Challenges & Evolution  
Emerging risks, such as climate change and cyberattacks, drive innovation in risk management. For example, **climate risk management** bridges adaptation, disaster response, and sustainable development. The field also addresses societal issues, such as **suicide prevention**, by reducing risk factors through targeted interventions.  

### Historical & Regulatory Context  
While not explicitly dated in the source material, risk management’s evolution is reflected in institutional practices:  
- **Reserve Requirements**: Regulatory tools used by banks to manage liquidity risks.  
- **Internal Audit**: Independent evaluations ensuring compliance and operational integrity.  
- **Self-Insurance**: Strategies where entities retain risk rather than transfer it to third parties.  

### Global Impact  
Risk management underpins international standards and initiatives, from **flood control** systems to **warning systems** for natural disasters. Its principles are applied universally, from volcanic observatories monitoring geological risks to corporate boards assessing financial liabilities. By fostering resilience, it enables organizations to thrive amid uncertainty, making it indispensable in modern governance and strategic planning.

## References

1. [Source](https://onlinelibrary.wiley.com/doi/10.1111/rmir.12016)
2. [Source](http://rdbk1.ynlib.cn:6251/qw/Paper/362578)
3. [Source](https://www.econbiz.de/Record/risk-management-new-phase-of-cost-control-gallagher-russell/10002178905)
4. Library of Congress Authorities
5. Freebase Data Dumps. 2013
6. [Source](https://baike.baidu.com/item/%E9%A3%8E%E9%99%A9%E7%AE%A1%E7%90%86/3419129)
7. BBC Things
8. YSO-Wikidata mapping project
9. BabelNet
10. Quora
11. KBpedia
12. [Source](https://eric.ed.gov/?ti=Risk+Management)
13. [OpenAlex](https://docs.openalex.org/download-snapshot/snapshot-data-format)