What are the internal and external techniques of risk management?
Answers
Internal risks are faced by a company from within its organization and arise during the normal operations of the company. These risks can be forecasted with some reliability, and therefore, a company has a good chance of reducing internal business risk.
External Risk Factors
External risks come up due to economic events that arise from outside the corporate structure. External events that lead to external risk cannot be controlled by any one company or cannot be forecasted with a high-level of reliability. Therefore, it is hard to reduce the associated risks.
Answer:
RISK MANAGEMENT - Its a department of the business group which works as the backbone of the firm to assist in the time of caution for better decision making to prevent further losses.
Risk management generally categorized as Internal and External risk management.
INTERNAL RISK MANAGEMENT - When the risk/problem takes place within the firm in general working days and can be controlled by the working parties ( Employers and Employees ).
For Example - In the Production sector, machinery gets obsolete and stops working problem due to which the production process gets hampered and bears losses than this is stated as Internal risk management.
EXTERNAL RISK MANAGEMENT - Situation where the risk has to be managed in the outside world in regard to maintain the betterment of firm.
FOR EXAMPLE - The government brought some changes in the trading process of the economy but the company is facing issues in maintaining them. Here, the next step by the government cannot be controlled by the firm.
Explanation: