Fundamental Concepts of Risk Management

Abstract

Risk management may be defined as the systematic process of managing the risks threatening an organization in order to accomplish its goals in a way consistent with common interest, human protection, environmental factors and the law. It consists of the planning, organizing, directing, the safety operations or equivalently the risk management operations with the aim of developing an efficient plan that decreases the negative results of risks threatening that organization. The first chapter consists of three parts. The first part concentrates on the definition, historical consideration, components, consequences, and cost of risk. Moreover, the second part concentrates on the operations, goals, structural disciplines, essence, ascendancy, systemic approach, cindynic consideration, philosophy, and the fundamental factors of the evolution of risk management. The third part presents the theoretical and practical possibilities of stochastic modeling and stochastic models for shaping risk management as a particular discipline of general management.