Risk management theories

Risk management theories are frameworks used to identify, assess, and prioritize potential problems that could negatively impact an organization or project. They involve systematically analyzing possible risks, understanding their likelihood and impact, and then applying strategies to minimize, control, or transfer those risks. Common approaches include avoiding the risk, reducing its impact, sharing the risk with others (like insurance), or accepting it when necessary. These theories help organizations make informed decisions, allocate resources wisely, and increase resilience against uncertainties, ultimately supporting stable and successful operations.