Question

Why risk management are important in a household ?

Answer 1

Household risk management,i.e. households' Insurance against adverse shocks to income, assets and financing needs is limited and often completely absent in particular for poor households.

Risk management is important because risk plays a crucial role in the way we manage our economy, organization or our family.

Risk can be rather complex when household money is involved such as for individuals or families.

When faced with risks, the challenge is how well prepared are we to overcome risks.

Successful businesses make constant efforts to change not updatr their in house administrative policies and framework to allow bfor possible risks in their business.

- Risk management not only prevents organization from entering a dangerous and uncertain territory, which could lead to a catastrophic failure but also ensure the development and growth of the business.

- Proper planning for avoiding risk earns public/ customers' confidence in the organisation.

- Organization's credibility, reputation and status when implementing risk management.

-Important for health and safety of employees, customers, volunteers and participants.

-A systematic approach to managing risk is regarded as best management practice.

- The approach taken almost always benefits the organisation irrespective of type of risk involved. Once the risk is identified, it is documented in detail subsequently the concerned stakeholders undertake possible risk management and mitigation processes.

- Business such as Microsoft , Google and Walmart appear have been successful global players mainly because they are able to manage risk in timely manner.