Final answer:
The 6 basic measures that apply to risk management are identification, assessment, analysis, treatment, monitoring, and communication.
Step-by-step explanation:
Risk Identification: This involves identifying and understanding potential risks that could affect the objectives of an organization. It includes recognizing both internal and external risks.
Risk Assessment: Once risks are identified, the next step is to assess and evaluate them. This involves analyzing the likelihood and potential impact of each risk on the organization.
Risk Mitigation or Control: After assessing risks, strategies are developed to mitigate or control them. This could involve implementing preventive measures to reduce the likelihood of a risk occurring or taking corrective actions to minimize its impact.
Risk Financing: This involves determining how to pay for the consequences of risks. It includes strategies such as purchasing insurance, setting aside financial reserves, or using other financial instruments to handle potential losses.
Monitoring and Review: Risk management is an ongoing process. Regular monitoring and review are essential to ensure that the risk management strategies are effective and to identify any new risks that may have emerged.
Communication and Reporting: Effective communication is crucial in risk management. This includes sharing information about risks, their potential impact, and the strategies in place to manage them. Reporting mechanisms help stakeholders stay informed about the organization's risk exposure and management efforts.