Final answer:
The five steps of risk management in the correct order are: Identify the risks, Analyze the risks, Assess the risks, Treat the risks, and Monitor and review.
Step-by-step explanation:
- Identify the risks: This is the first step in risk management where you identify and list out all the potential risks that could impact your project or organization. It involves gathering information and understanding the various risk factors.
- Analyze the risks: Once the risks are identified, you need to analyze and assess their potential impact and probability of occurrence. This step helps in prioritizing the risks and understanding their potential consequences.
- Assess the risks: In this step, you evaluate the significance of the risks based on their severity and prioritize them accordingly. It involves assigning a risk rating or score to each risk based on its potential impact and likelihood of occurrence.
- Treat the risks: After assessing the risks, you develop and implement risk mitigation strategies to minimize or eliminate the potential impact of the risks. This involves developing contingency plans, implementing risk controls, and monitoring the effectiveness of the strategies.
- Monitor and review: The final step in risk management is to regularly monitor and review the effectiveness of the risk management strategies. This involves tracking the risks, evaluating their outcomes, and making necessary adjustments or updates to the strategies.