Pnted out that there are seven components of the risk management plan that includes roles and responsibilities, budgeting, timing, scoring and interpretation, thresholds, communication, tracking and auditing. The roles and responsibilities describe the supporting role of the risk management team. The main role of the head is observed and the way he manages the entire team to perceive the potential risk and take quick actions to overcome them. For instance, in an airline industry, if the potential threat arises in the finance department and the section runs through losses, the team comes to the forefront to minimize the hazards. The team must identify the factor that is causing the risk in the financial department. Once the risk is identified, it will help the team to incorporate certain strategies that will reduce the risk. The strategies will analyse the problems and will evaluate effective results by prioritizing the risk based actions. Qiu and Steiger (2011, p.195) observed that budgeting is another way to reduce the risk of the business. The budget determines the price set for the purchase of the raw materials, maintain the administration structure and employee fees structure in the industry. For instance, if the airlines industry does not prepare their budget sheet, it becomes hard for the management to purchase more litres of fuel that do not meet their budget cost. The revenue of the airline industry comes from the cost to meet with the customer demands.
In addition to this, MacKenzie (2014, p.101) described that timing is one of the main components that describes the initial stage which prompts the team to develop the risk management actions. Timings should be maintained throughout the project so that the completion can be matched with the deadline. Moreover, the scoring and the interpretation helps to analyse the vulnerability of the risk and what sort of interpretation required to reduce the risk. The vulnerability decides the scoring of the risk and the interpretation expects the consequences that will lead to with it’s impact. The threshold level determines which risk are important and how the risk need to be calculated. Every risk is linked with different outcomes and is acted upon differently. On the other hand, communication serves it function as the way to inform each team member about the risk and the plan evaluated to use the resources to minimize the danger.