Once the risk manager has identified and analyzed the risk, the next main step is to manage the identified risk. The risk identified can be managed in the following ways:-
- Accept the risk or retain it.
- Transfer the risk to third party.
- Reduce the risk by some techniques.
- Eliminate the risk.
The risk manager may decide to accept the risk, might be because cost associated with eliminating that risk completely is more then the consequences of the risk. Risk Manager may decide to transfer the risk, which is most probably done by the procedure of insurance. Risk manager can also be able to reduce the risk by changing the way organization produce the products or by introducing some new safety measures.
Risk can be managed in number of ways. To counter risks existing assets and resources can be used for example improving the existing methods and systems, improvements in accountability and internal controls etc. Risk manager may decide to accept a risk but they decide to make a plan which would minimize risk’s worse effects, this planning is known as Contingency Planning. A good contingency planning will allow the risk manager to take actions immediately when ever any unforeseen event occurs, with a minimum adverse effect on the project at work.
Risk Management is not an activity which has to be done once. Continuous monitoring and reviewing the strategies and scenarios are very much important for the success of risk management program. Such reviews ensure that correct risk has been identified and appropriate controls are put into use. As the experience of risk manager increases changes in the risk management strategies, requires review, to be perfect.