This website uses cookies to ensure you have the best experience. Learn more

Risk Management Essay

1244 words - 5 pages

Risk is a commonly used term and its usually liked with bad impacts on our objectives. The Oxford English Dictionary define risk as “ a chance or possibility of danger, loss, injury or other adverse consequences”. There is no agreeable technical definition of risk as it went through many developments. The first stage was the management of threats only then the term is extended to cover the threats and the opportunities which face the organisations. The latest stage which is the management of the threats, opportunities, uncertainties and its sources. Of uncertainty (Ward and Chapmen, 2003). Therefore, Dowie argues to banned use the term “risk” in the risk management because of its misleading. ...view middle of the document...

Risk management policy can be centralized or decentralized which based on their philosophy (Clarke and Varma, 1999).
Risk management is developing field and there are many opinions about what does Risk management includes and how it should be done. Many terminologies introduce to describe the organisations wide use of risk management such as ‘Total Risk Management’, ‘ Holistic Risk Management’, ‘Integration Risk Management’ and ‘Enterprise Risk Management’. All these terms mean almost the same things which reflect the helicopter view for the all risks faces by the firms (Ward, 2005). Association of Insurance and Risk Managers in Commerce used the term “Integrated Risk Management” and they define it as “ when risk management integrated (or embedded) into all of the functions and processes within the organisation” (AIRMIC, 1999). While Mottershead and Godfrey used the term ‘Enterprise Wide Risk Management’ as a technique “that looks at risk across the whole organisation rather than through the traditional functions and aligns risk management activities to shareholder value level”. Hodgkinson used the same term with wider meaning as “ a risk management philosophy that is: positive and proactive; value based and broadly focused ; embedded in processes; integrated into strategy and total operations; and continuous”. (Hodgkinson, 2001). In September 2004, the Committee of Sponsoring Organization of the Treadway Commission (COSO) produce their framework for the Enterprise Risk Mnagement which define the ERM as “process, effected by an entity’s board of directors, management and other personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the entity, and manage risk to be within its risk appetite, to provide reasonable assurance regarding the achievement of entity objectives” (COSO,2004).

In the late 1980s organisations and managers start to discuss enterprise risk with an overall view of the risks that companies face (Hampton, 2009). With a managerial emphasize Enterprise Risk management introduced in the middle 1990s in industry. ERM is a procedure to quantify risks on a common base, evaluate the interrelationship among these risks, and examine their expected company – wide effects. In addition, looking at a company’s risk on a holistic basis enables the top management to observe how risks act together and supplies management with a enhanced view on how the financial statements will be changed if unexpected scenarios happen ( Aon, 1999).
Under the ERM framework, firms accepted required risks to achieve their strategic goals, in the limit of their “risk tolerance”. The most important of the ERM process is efficient risk integration, which highlight the relations between risks and their priorities. Certain risk KPI’s, integrated techniques, or other statistical modelling ways are generally used in its implementation. Successful reporting and communications of risks in a...

Other Papers Like Risk Management

Risk Management Essay

4553 words - 19 pages IMT 4762 Risk Management 1 Report Police Group: Sumanth Ramanujapuram Vinay Krishna Vemuri Deming Yin 27.9.2013 1 0. Executive Summary As  we  have  been reviewing the current situation of Skyri police,  the duties and tasks of Skyri police fall into the following categories: ● Develop effective collaborative solutions with other operators and service providers. ● Coordination  of  the  goals,  plans  and  work  of   the  regional

Risk Management Essay

1055 words - 5 pages Risk Management Student Name Institution Risk Management for a Satellite Development Project When a project manager talks about a project risk management plan, what comes in the participant mind? The list and document that have a number of foreseeable risk, estimated level of impacts as well as the established responses to issues. This establish the risk assessment matrix which help to assess the level of impact as it occur. The risk

Risk Management

1428 words - 6 pages  Risk Management Dattatreya Shodhan SU200173813 Strayer University CIS527 Dr.  Glenn Hines 10/14/15 Abstract Risk Management is one of the major components for a company to be successful as if it

Risk Management - 1257 words

1257 words - 6 pages Running Head: RISK MANAGEMENT Risk Management Jennifer Sprague HCS 451- Health Care Quality Management and Outcomes Analysis May 16, 2011 Isamel Caicedo When looking at organizations and the risks that they have to manage on a daily basis, we see where policies, procedures, and outcomes come into play. Though risks are different and challenge organizations in different ways, there are steps that every organization

Risk Management - 1482 words

1482 words - 6 pages Risk Management /562 December 8, Risk Management Risk management is the practice that identifies the potential risk before the risk becomes a problem. Risk management will allow an organization to take the necessary steps to reduce or prevent the risk from becoming a major problem for an organization (The Economic Times, 2012). Risk management will also include identifying the various risk of an organization within a risk assessment, to

Risk Management - 3866 words

3866 words - 16 pages CHAPTER ONE 1.0 INTRODUCTION Project management is the application of knowledge, skills, tools, and techniques to project activities in order to meet or exceed stakeholder needs and expectations from a project. Project risk management includes the processes concerned with identifying, analyzing, and responding to project risk. It includes maximizing the results of positive events and minimizing the consequences of adverse events

Risk Management - 4934 words

4934 words - 20 pages Discuss the principles and objectives of Risk Management from the perspectives of both company directors and Auditors, explaining how you consider the appropriate assessment and prioritisation of recognised and documented risks could have possibly have prevents or minimised the impact of any of the recent prominent corporate failures worldwide. Table of Content

Risk Management - 675 words

675 words - 3 pages Using the information asset valuation/impact evaluation method presented in chapter 8, conduct a preliminary risk assessment of the organization’s critical information. Answer each of the questions covered in the chapter. What would it cost if the organization lost all of their data? [Insert Answers Here] The cost would honestly be potential loss of human life, therefore Billions. 1. What is risk management? A process that identifies

Risk Management - 748 words

748 words - 3 pages Risk  Management     1-­‐A     Likelihood     Banking  Risk:   The  Likelihood  of  a  break  in  at  Macville  café  I  think  is  in  the  possible   category.  It’s  not  extremely  high  but  with  the  banking  not  been  done   regularly  enough  because  of  the  distance  to  the  bank  from

Risk Management - 4636 words

4636 words - 19 pages Risk Management in Islamic and Conventional Banks: A Differential Analysis Salman Ahmed Shaikh* Dr. Amanat Ali Jalbani Abstract Islamic banking is interest-free banking which makes it necessary for Islamic banks to take active part in the operations of the business, i.e. share profits as well as losses. Banks including Islamic banks prefer to take minimum risk. On the surface, it may seem that Islamic banks face more risk and hence, will

risk management

3766 words - 16 pages  Introduction of the purpose and importance of risk management Risk management planning is a critical and often overlooked process on every project.  Allowing for the proper amount of risk planning in your project schedule can mean the difference between project success and project failure when those potential risks become real issues. The plan is only the output of the process. It details how the process will be implemented

Related Essays

Risk Management Essay 2497 Words

2497 words - 10 pages Introduction of Risk Management Risk management is a culture which involved of the cooperation of all individual in the organization or group. The main achievement of risk management is not to discuss how the risk can be managed or prepare, but, more important, is to understand why the risks need to be managed and why it is so important. There are many techniques, tools, guidelines or processes to assist risk managers to manage risks. However

Risk Management Essay 2511 Words

2511 words - 11 pages Impact of Risk Management in Application Development Abstract: Nowadays, software is becoming a major part of enterprise business. Software development is activity connected with advanced technology and high level of knowledge. Risks on software development projects must be successfully mitigated to produce successful software systems. Lack of a defined approach to risk management is one of the common causes for project

Risk Management Essay 1196 Words

1196 words - 5 pages RISK MANAGEMENT Background The future of an organization can be affected by my many things. The negative things are called risks while the positive ones are called opportunities. Risk Management is needed in any organization today than ever before. In the past, many organization were either not aware or ignored risks or worse all lived through the unfortunate consequences caused by them. In many cases, there were no designated persons

Management Risk Essay

2188 words - 9 pages of risk. Risk Management Before a risk management strategy can be decided upon, the risk event must first be identified. An organisation should conduct three steps before deciding on the best risk management strategy to use. As risk management can use a substantial amount of resources, clarification and direction should be decided upon before conducting risk management. The three factors are (Stanleigh, 2015); * Identification of the risk