Introduction
Risk is a concept that denotes the potential negative impactsto some characteristic of value (present value of cash flow expected to begenerated into perpetuity) that may arise from a future event. In other words "Risksare events or conditions that may occur, and whose occurrence, if it does takeplace, has a harmful or negative effect". In general risk is probabilityof risk occurrence multiplied by impact of risk occurrence. Fig. 1 showsvarious sources associated with the risks.
Essence of risk management
Risk management is a scientific approach to the problem ofdealing with the pure risks faced by individuals and businesses whichis defined as "the identification and assessment of the collective risksthat affect firms value, and the implementation of a firm wide strategy tomanage those risks".
Risk management is also a central part of any organisation'sstrategic management. It is the process whereby the organisations methodicallyaddress risks attaching to their activities with the goal of achievingsustained benefit within each activity and across the portfolio of allactivities.
About the Authors:
The authorsare associated with the Department of Textile Technology, Bannari AmmanInstitute of Technology Sathyamanglam
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