Question

Which of the following statements defines risk management?

a. it is the process of managing an organization's workforce.
b. it is the process of increasing productivity by strategically managing the workflow.
c. it is the process of conserving earning power and assets by minimizing the shock from losses.
d. it is the process of measuring employee performance in organizations.

Answer 1

Risk management is defined as the process of conserving earning power and assets by minimizing the potential adverse effects of losses through various strategies (c).

Step-by-step explanation:

The statement that defines risk management is 'c. it is the process of conserving earning power and assets by minimizing the shock from losses.' Risk management involves identifying, assessing, and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents, and natural disasters.

Risk management is a comprehensive discipline that preemptively addresses potential setbacks. It involves formulating strategies that include transferring the risk to another party, avoiding the risk, reducing the negative effect of the risk, and accepting some or all of the consequences of a particular risk.