Risk means any event or action which may occur in an uncertain situation and affect, damage, fail, or reduce the chance to achieve target and objective. The example of risk includes the high risk, high return situation in investment. Therefore, risk is uncertainty.

Risk management is a process to analyze, evaluate, take care of, examine, and control the risk relating to working activity and process with an aim to mitigate damage from such risk as much as possible since some risks such as an accident is very hard to predict.

In general management, one must proceed according to the objective and target, and also control the work to achieve the target. There are things that should be emphasized which are internal audit, internal control, and risk management.

Risk might affect to an organization in the following ways.

1. Risk from business loss: the loss of business which occurs from a wrong decision of executives or from an unpredicted natural disaster may lead to the downfall of organization. Even in a non-profit organization such as educational institute, a wrong decision from executives may result in the stagnation or failure of organization as well

2. Risk from the failure of policy or project. A failure in policy implementation will affect the direction of development while a failure of project will result in a loss of such project. Such failure may occur from a lack of feasibility study, a consideration on breakeven point, or a corruption, particularly in a failed government project.

3. Risk from the loss of trust. The success or failure of executive will affect public popularity and trust.

Everyone generally realizes an importance to prevent and mitigate risk. Car, life, and health insurances are all the examples of individual risk prevention. The objectives of risk prevention for organization can be summarized as follows.

1. To let overall result meet the target performance and determined objective

2. To improve business security and to reduce income fluctuation which will let the business grow steadily

3. To reduce the loss of opportunity from working

4. To add value to individual and related parties.

5. To better integrate with other work systems