We faced various risks in the business world. Risk can be regarded as uncertainty that affects the achievement of business goals. This uncertainty arises from changes in the environment surrounding business operations and sudden events. Therefore, risk management is; manage to respond appropriately to uncertainties, effectively handle unexpected damages caused by risks at the lowest cost, and achieve business goals as planned.

For instance, suppose you are driving a car now. Predict various changes and sudden events such as jumping out if children, movement of bicycles and motorcycles, right/left turns of oncoming vehicles, sudden breaks of vehicles in front, changes in traffic lights. Those are risks while driving, and adjust speed and handle operation, etc. are taken appropriately.
At that time, most of the measures will be taken unknowingly. Although various risks can be predicted in business, the difference from driving a car is that risk management is carried out accurately in the correct process, rather than unknowingly predicting and responding to risk.

Risk Management Requirements:

What if you run into risks and don’t respond relevantly during work? As a result of not being able to respond appropriately to risks, there was a major hindrance to our business. Specifically, let’s assume that the product was not manufactured as planned. Delivery to customers is delayed and the company loses credibility. It may affect the customer’s own business and claim damages.

If we had to add a lot of resources as a countermeasure to prevent the impact of risk, it would be costly and could hinder our business as well as our company’s profit plan. In some cases, you will incur significant losses. In this way, the improper initial response to risks can have a significant impact not only on one’s own business but also on company management. Due to technological advances, diversification of customer needs, and complex business environment, the risks faced by a business trend to rapidly diversify, become more complex and become more serious.

Depending on the nature of the risk, there are increasing cases where it develops into a problem that shakes the foundation of the company. More accurate risk management is required more than ever.