How to Show Internal and External Risk Management Techniques

Save

One way to express risk is to divide it into internal and external groups. Internal risk is risk to your company's bottom line from forces that come from within -- disgruntled employees, money lost due to poor communication and other risks that come from employees interacting with one another. External risk, on the other hand, is risk that comes from outside your company -- negative public relations, a recession or anything else that comes from external forces.


One of the key parts of running a company is establishing precisely how you are going to manage these risks.

  • Establish precisely what risks your company faces, both internally and externally. This is not a single list of risks. Rather, it should be dynamic -- you should constantly be looking for risks that you need to manage, and documenting what these risks are.

  • Document risk management techniques in a clear, logical way. The technique should follow from the individual risk, and be clear. So, if you have identified the internal risk of employees printing emails instead of reading them on their screens, you should manage this risk with a policy that discourages printing. Cause and effect should be explicit.

  • Track what you are doing to manage risk, and whether these techniques are working. In addition, track what the effects of those risks are --- do they create new risks? Risk management is about understanding the consequences of your actions, and the best way to do this is with clear, applied data.

  • Identify employees with clear responsibilities for different areas of risk. Ensure that these employees' responsibility is documented to create a clear path for accountability. If a risk is not adequately managed, you will be able to quickly talk to the responsible party.

  • Make the risk management documents accessible to everyone who needs that information. Employees who make risky decisions should be able to quickly access the data that shows how that risk is being managed.

References

Promoted By Zergnet

Comments

You May Also Like

  • What are Risk Management Techniques?

    Risk is the ultimate four-letter word of business, investment and government. Entrepreneurs and political leaders understand as well as anyone that if...

  • External Risks Concerning Hotels

    Every business, including a hotel, is exposed to a number of internal risks that careful management and planning help to mitigate. Hotels...

  • Risks of Internal Control in eCommerce

    Technology has greatly changed the way companies operate in today’s business world. Many companies have started eCommerce websites via the Internet to...

  • External Threat Examples

    Businesses have two types of environments: internal and external. Internal environments are controlled by the company, and may include elements such as...

  • Types of Risks in Internal Control

    Internal control is a process that provides reliable financial reporting, effectiveness of operations and compliance with laws. It is a process companies...

  • What Are External Financial Risk Factors in Business?

    Your company’s team might manage inventory and the supply chain better than any in the industry, but controlling internal financial factors is...

  • External & Internal Factors of Financial Risk

    Financial risk refers to the risks that businesses run when making investments, planning for the future and conducting day-to-day operations. All businesses...

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!