Risk control is defined as the process of identifying the technical, financial and environmental risks an organization faces with the help of risk assessment measures and to develop strategies to counter the risks. Risk control is a part of risk management which only deals with controlling the different types of risks an organization faces. Through various risk control policies, an organization makes itself capable of countering the risks or absorbing the risks with lesser hazardous situations. Although the main purpose of risk control strategies is to keep the organization as much safe from the hazards possible, certain risks cannot be avoided at times, which is why they are absorbed.
Risk control is a part of risk management. There are different methods which organizations employ to keep away from the risks. Here are some of the most common ones:
Contingency is a method or strategy in which the organization needs to have a well developed plan for handling the various types of risks it can face in the future. In this method, the risk control plan must be made before the risky situation arrives.
Avoidance is the method in which an organization chooses to move to an alternative process to avoid the risks. In this method, the organization can completely change its course of functioning when the risk situation occurs.
Reduction is the method of reducing the impact a risky situation can have on the business processes of an organization. In other words, the organization will make a reduction risk control strategy to either minimize the effects of the risky situation or to completely eliminate it.
Prevention is the method of impeding the likelihood of a situation to occur. An organization makes a strategy after detecting a negative outcome that might occur in the future. The organization then takes necessary measures in order to avoid this situation from occurring.
In this section we will discuss: