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Risk Management

  • Living reference work entry
  • First Online:
Encyclopedia of Sustainable Management

  • 34 Accesses

Synonyms

Risk governance

Definition

Risk management (RM) is a process of identifying, evaluating, and prioritizing risks, followed by response actions and monitoring. Risk differs from uncertainty, because probabilities may be calculated for risks, but not for uncertainty, which refers to more fundamental unknowns. The RM goal is usually not to eliminate all risks, since this is typically either impossible or very costly. The point is managing risks at an acceptable level ensuring the best balance between threats and opportunities, in particular critical risks and those that are more likely to materialize. While everyone needs to manage risk, even if our job is not being a risk manager, taking risk is fundamental in business.

RM is an ongoing and iterative process, which must be repeated indefinitely, not only because risks cannot be fully and definitely eliminated but also because risks are permanently changing. The social, political, and business environment is constantly changing,...

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References

  • Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2009). Enterprise risk management – Understanding and communicating risk appetite. https://www.coso.org. Accessed 19 Aug 2019.

  • Committee of Sponsoring Organizations of the Treadway Commission (COSO). (2017). Enterprise risk management – Integrating with strategy and performance. New York: COSO.

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  • Ernst & Young. (2018). How can you turn digital risk into a source of competitive advantage. https://www.ey.com/en_gl/digital/how-can-you-turn-digital-risk-into-a-source-of-competitive-advan. Accessed 19 Aug 2019.

  • Kaplan, R. S., & Mikes, A. (2012). Managing risks: A new framework. Harvard Business Review, 90(6), 1–19.

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  • Taleb, N. N., Goldstein, D. G., & Spitznagel, M. W. (2009). The six mistakes executives make in risk management. Harvard Business Review, 87(10), 78–81.

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  • UNPRI. (2019). Principles of responsible investment. https://www.unpri.org/download?ac=6303. Accessed 19 Aug 2019.

  • World Economic Forum. (2019). The Global Risks report 2019 (14th ed.). Geneva: World Economic Forum.

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Author information

Authors and Affiliations

  1. FEP.UP – School of Economics and Management, University of Porto, Porto, Portugal

    João Oliveira

  2. ISCAP – School of Accounting and Administration of Porto, Porto, Portugal

    Maria do Céu Ribeiro

Authors
  1. João Oliveira
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  2. Maria do Céu Ribeiro
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Corresponding author

Correspondence to João Oliveira .

Editor information

Editors and Affiliations

  1. London Metropolitan University, Guildhall Faculty of Business and Law London Metropolitan University, London, UK

    Samuel Idowu

  2. Cologne Business School, Ingolstadt, Germany

    René Schmidpeter

  3. College of Business, Loyola University New Orleans, New Orleans, LA, USA

    Nicholas Capaldi

  4. International Training Centre of the IL, International Labor Organization, Turin, Italy

    Liangrong Zu

  5. Department of Economics, Society and Politics, University of Urbino Carlo Bo, Urbino, Italy

    Mara Del Baldo

  6. Instituto Politécnico da Guarda, Guarda, Portugal

    Rute Abreu

Section Editor information

  1. Yasar University, Izmir, Turkey

    Duygu Türker

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Oliveira, J., Ribeiro, M.d.C. (2021). Risk Management. In: Idowu, S., Schmidpeter, R., Capaldi, N., Zu, L., Del Baldo, M., Abreu, R. (eds) Encyclopedia of Sustainable Management. Springer, Cham. https://doi.org/10.1007/978-3-030-02006-4_574-1

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  • DOI: https://doi.org/10.1007/978-3-030-02006-4_574-1

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-02006-4

  • Online ISBN: 978-3-030-02006-4

  • eBook Packages: Springer Reference Business and ManagementReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences

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