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Risk management isn't just a checklist you complete once and file away—it's a dynamic, cyclical process that organizations use to protect their objectives and make informed decisions under uncertainty. You're being tested on your ability to understand how each step in this process connects to the others, and why the sequence matters. Examiners want to see that you grasp concepts like risk appetite, treatment hierarchies, stakeholder engagement, and continuous improvement as living principles, not isolated definitions.
The risk management process follows a logical flow: you can't treat risks you haven't identified, and you can't prioritize risks you haven't analyzed. But here's what separates strong answers from weak ones—understanding that communication, documentation, and context-setting aren't "extra" steps but rather continuous activities that run throughout the entire process. Don't just memorize the steps; know what principle each step demonstrates and how skipping or mishandling one step compromises the entire framework.
Before any risk can be identified or analyzed, organizations must establish the boundaries and conditions under which risk management will operate. This foundational work ensures that all subsequent activities are relevant, focused, and aligned with what the organization actually cares about.
Compare: Establishing the Context vs. Communication and Consultation—both are foundational activities, but context-setting happens primarily at the start to define boundaries, while communication is ongoing throughout every stage. If an exam question asks about "continuous" activities in risk management, communication and monitoring are your best examples.
Once context is established, the process moves into active discovery. These steps transform uncertainty into structured information that can be acted upon.
Compare: Risk Analysis vs. Risk Prioritization—analysis determines what a risk looks like (likelihood, impact, root causes), while prioritization determines where it ranks relative to other risks and organizational capacity. FRQs often test whether you understand this distinction by asking you to explain why two risks with similar impact scores might be prioritized differently.
With risks identified, analyzed, and prioritized, the process shifts to decision-making. This is where organizations commit resources and choose their response strategies.
Compare: Risk Evaluation vs. Risk Treatment—evaluation is the decision point (does this risk need action?), while treatment is the action itself (what specifically will we do?). Exam questions may present scenarios where an organization skips evaluation and jumps straight to treatment, asking you to identify what went wrong.
Risk management fails when treated as a one-time project. These activities ensure the process remains current, accountable, and continuously improving.
Compare: Risk Monitoring vs. Risk Documentation—monitoring is active surveillance of changing conditions, while documentation is passive recording that supports accountability and learning. Both are continuous, but monitoring focuses on the present and future while documentation preserves the past.
| Concept | Best Examples |
|---|---|
| Foundational/Continuous Activities | Communication and Consultation, Establishing the Context |
| Discovery Phase | Risk Identification, Risk Analysis, Risk Prioritization |
| Decision Phase | Risk Evaluation, Risk Treatment, Developing Strategies |
| Sustainability Phase | Risk Monitoring and Review, Risk Documentation |
| Requires Stakeholder Input | Establishing Context, Communication, Risk Identification |
| Uses Quantitative Methods | Risk Analysis, Risk Prioritization |
| Determines Resource Allocation | Risk Prioritization, Risk Treatment |
| Supports Accountability | Risk Documentation, Communication and Consultation |
Which two steps are considered continuous activities that run throughout the entire risk management process rather than occurring at a single point?
Compare and contrast Risk Analysis and Risk Evaluation—what is the primary purpose of each, and why must analysis precede evaluation?
An organization identifies a significant risk but immediately implements a treatment strategy without comparing the risk against established criteria. Which step did they skip, and what problems might this cause?
Name the four risk treatment strategies and provide an example of when each would be most appropriate.
If an FRQ asks you to explain how an organization can ensure its risk management process improves over time, which three steps would you emphasize and why?