Michael Saltzstein Sheds Light On the Distinguished Aspects Of Risk Management

1,014 Views

Even though risk management has emerged as an indispensable element of the commercial landscape, not many people are well-versed with its specific elements. According to Michael Saltzstein most people think that risk management simply deals with identifying, assessing and controlling any kind of economic, social or physical threat faced by an organization. However, so is not the case. Risk management goes way beyond simply transferring the risks or minimizing its overall negative effects. It also involves the elements of risk avoiding, risk taking and structured planning for any contingencies.

Developing a comprehensive risk management program can significantly aid in protecting the reputation of a firm, and provide it with the needed competitive edge in the marketplace. As per Michael Saltzstein much like any other important business activity, risk management also includes a process involving well-designed activities, reliable inputs, as well as value added outputs. The core notion behind formulating a risk management program would be to ensure the maximum development and progress of a company, while avoiding any kind of contingencies.

There generally are not many hard and fast rules when it comes to risk management. Moreover, simply crafting a well defined risk management program is not going to help either. The risk management treatment required by a firm would depend on a magnitude of factors, such as the internal and external environment of a company, the industry they are operating in, its overall size, and so on.

As per Michael Saltzstein, the four key elements of risk management would be process, integration, culture and infrastructure, taking into consideration which any plan would be put in place. However, it also is important to note that these elements tend to be quite flexible, as the risk profiles, operating philosophies and organizational structures across diverse industries and firms tend to differ quite a bit.

Before a person gets started with creating a risk management solution for a business, it is crucial that they note whether the firm even requires a full-fledged solution or not. The requirements of any company shall be deeply examined, before creating any strategy. At times, the company may simply require an avoidance plan, and not a management plan for risks. Here are some of the questions one must ask themselves before carrying out a risk management strategy:

Is the plan actually feasible?
What are the core weaknesses and strengths of the plan, and can the flaws present in it be removed in some way?

Does the plan align with the vital business objectives of a firm?
How much the outcomes of the plan actually help a business?
Has the plan been clearly defined by events and activities?

Having the answers to the questions mentioned above would give people a thorough perspective on the risk management process, according to Michael Saltzstein. These answers would help them to get the best results out of the process and enhance their profit prospects.