MSG Team's other articles

11137 Role of Management in Managing Organizational Diversity

Organizational diversity enables individuals from diverse backgrounds, religions, communities, age groups, experiences, educational qualifications and so on to work on a common platform, striving hard towards achieving the goals and objectives of the organization within the shortest possible time frame. Management plays an essential role in managing organizational diversity: All individuals need to be treated […]

9403 Functioning of Human Memory

The study of human memory since ages has been a topic of interest for the school of cognitive psychology. Human memories of all individuals can never be same. Human memory refers to a process of acquisition, storage, retention and retrieval of information. Human memory has the ability to store and recall the previously learnt information, […]

9078 Effect of Communication Barriers in Business Communication

An organization is an individual’s first home as one spends the maximum time here only. No organization runs for charity, it is really important that the organization achieve its goals. How does an organization become successful? How will an organization achieve its goals?. The employees are the assets for any organization and the profitability of […]

10099 Key Factors in Effective Change Management

Successful organizations evolve at lightning speed for remaining competitive and gaining a winning edge across the industry. This can be fulfilled by building the adaptive mechanisms and proactively dealing with the environmental pressures and responding to the changing needs of the present times. By adopting a holistic approach, visionary leadership as well as support from […]

8738 What is Interpersonal Relationship ? – Meaning and Important Concepts

A strong bond between two or more people refers to interpersonal relationship. Attraction between individuals brings them close to each other and eventually results in a strong interpersonal relationship. Forms of Interpersonal relationship An interpersonal relationship can develop between any of the following: Individuals working together in the same organization. People working in the same […]

Search with tags

  • No tags available.

A risk treatment is mandatorily a part of an effective risk management plan. The plan here means how you respond to the reported potential risks. It details on strategies on how to deal with the various risks - low or high, acceptable or unacceptable. The plan also outlines the role and responsibilities of the team members.

Literally speaking, risk treatment also known as risk control, is that part of the risk management where decisions are made about how to deal with risks either in the external or internal environment. Various options like risk reduction, risk avoidance, risk acceptance and risk transfer.

Before you embark on risk treatment there is something called as risk response planning that needs to be taken care of. It is explained in detail below:

Risk Response Planning

Risk response planning no doubt is an integral aspect of risk treatment. The planning covers discusses and evaluates inputs like risk register, risk profiles and cause control matrix. Strategies are formulated and documented in this stage. The following four different strategies are discussed upon.

  • Avoiding Risk - Risk avoidance requires identification of the risks first and foremost. This can be achieved through previous project experiences and histories. An analysis is then made upon those that have a tendency to arise upfront at project initiation. Then finally a course of action is arrived upon after assessing the relative impact of the risks.

  • Transferring Risk - Risk transfer is one of the better means to dilute the impact of the risk. In project management as in finance a risk is often transferred to a third party. It only means the impact of risk is diluted to an extent that event or activity or project for that matter does not suffer a body blow. It also means that a special team outside of the project that bears the impact of the risk.

  • Mitigating Risk - Risk mitigation is a control process that essentially stops a risk before it starts making an impact and bringing it to an acceptable level. Often a contingency plan is put in place to prevent the risk.

  • Accepting Risk - Finally, there are certain risks that are unavoidable. This strategy is the best when the risk is low. But there has to be a due plan for the same such as determining when the project will be exposed to the risk and making small adjustments accordingly. A risk that is acceptable can be considered passive since no action at all is taken upon the same.

By the end of risk response planning various risks and the corresponding strategies are documented. A risk register is ready that contains all details vis-a-vis the time of occurrence, priority and the people involved in handling the risk. The risks have already classified as either internal or external. Relevant risks are assigned to relevant stakeholders accordingly.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

The COSO Framework for Internal Control

MSG Team

The Cost Structure in the Insurance Industry

MSG Team

Credit Derivatives: An Introduction

MSG Team