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

Risk Management Process Essay

1985 words - 8 pages

The purpose of risk management is to identify potential problems before they occur so that risk-handling activities may be planned and invoked as needed across the life of the product or project to mitigate adverse impacts on achieving objectives.

Risk management is a continuous, forward-looking process that is an important part of business and technical management processes. Risk management should address issues that could endanger achievement of critical objectives. A continuous risk management approach is applied to effectively anticipate and mitigate the risks that have critical impact on the project.

Effective risk management includes early and aggressive risk identification ...view middle of the document...

Establishing categories for risks provides a mechanism for collecting and organizing risks as well as ensuring appropriate scrutiny and management attention for those risks that can have more serious consequences on meeting project objectives.

Typical work products would include: (1) risk source lists (external and internal) and (2) risk categories lists.

2. Demonstrate that you have a process to define the parameters used to analyze and categorize risks, and the parameters used to control the risk management effort. Parameters for evaluating, categorizing, and prioritizing risks typically include risk likelihood (i.e., the probability of risk occurrence), risk consequence (i.e., the impact and severity of risk occurrence), and thresholds to trigger management activities.

Risk parameters are used to provide common and consistent criteria for comparing the various risks to be managed. Without these parameters, it would be very difficult to gauge the severity of the unwanted change caused by the risk and to prioritize the necessary actions required for risk mitigation planning.

Typical work products would include: (1) risk evaluation, categorization, and prioritization criteria and (2) risk management requirements (control and approval levels, reassessment intervals, etc.).

3. Demonstrate that you have a process to establish and maintain the strategy to be used for risk management. A comprehensive risk management strategy addresses items such as: (1) The scope of the risk management effort, (2) Methods and tools to be used for risk identification, risk analysis, risk mitigation, risk monitoring, and communication, (3) Project-specific sources of risks, (4) How these risks are to be organized, categorized, compared, and consolidated, (5) Parameters, including likelihood, consequence, and thresholds, for taking action on identified risks, (6) Risk mitigation techniques to be used, such as prototyping, simulation, alternative designs, or evolutionary development, (7) Definition of risk measures to monitor the status of the risks, and (8) Time intervals for risk monitoring or reassessment.

The risk management strategy should be guided by a common vision of success that describes the desired future project outcomes in terms of the product that is delivered, its cost, and its fitness for the task. The risk management strategy is often documented in an organizational or a project risk management plan. The risk management strategy is reviewed with relevant stakeholders to promote commitment and understanding.

A typical work product would be the project risk management strategy.

4. Demonstrate that you have a process to identify and document the risks. The identification of potential issues, hazards, threats, and vulnerabilities that could negatively affect work efforts or plans is the basis for sound and successful risk management. Risks must be identified and described in an understandable way before they can be analyzed and...

Other Papers Like Risk Management Process

Enterprise Wide Risk Management Essay

3548 words - 15 pages organizations gain in complexity it is important to provide the critical oversight that can come only from an enterprise-wide risk-management approach. According to the Casualty Actuarial Society (CAS), enterprise risk management defined as “ the process by which organizations in all industries assess, control, exploit, finance and monitor risks from all sources for the purpose of increasing the organization’s short and long term value to its

Erm Concepts Essay

882 words - 4 pages Maturity Model. – to determine where its organization is in terms of risk management development. 1. Nonexistent-Limited risk management activity and no ERM program. 2. Level 1: Ad hoc-Uses ERM process for singular events. 3. Level 2: Initial-Early stages of ERM implementation. 4. Level 3: Repeatable-ERM being processed regularly by various units in the organization. 5. Level 4: Managed-Skillful use ERM process is decisions on

Credit Risk

587 words - 3 pages impact the repayment ability of mass obligor during any possible economic downturn. To ensure the portfolio health, the bank has distributed the overall credit concentration among different segments/industry/trading. For example, branches are primarily responsible for sourcing of potential clients and initiate limit (credit) approval process for review of Credit Risk Management Division (CRMD), this division (CRMD) ensure the quality of credit

Risk Management

1244 words - 5 pages (D’Arcy and Brogan, 2001). Risk management is a integrated process and risk manger need to assist the company’s business process are constant with its strategies, and the what is the relation between risk management and the investment and performance choices (Nocco and Stulz, 2006). Organisations should develop a risk management long term strategies depending on the business environment and shareholders and executive management risk tolerance

Risk Response Planning

1479 words - 6 pages preparation in response part, the subsequent risk management process (monitoring & controlling) would generate mistakes and the previous effort (planning, identification and analysis) would be wasted. This paper uses PMBOK (main reference) and several scholarly articles (secondary references) to elaborate the definition of risk response planning, find necessary tools & techniques, emphasize the importance of risk trigger and contingency plan, and

Project Management

613 words - 3 pages confirm termination before energizing | 3 | 2 | 4 | | | | | | | | | | | BENEFIT AND LIMITATION OF USING THE RISK REGISTER The Risk Register tool is used for recording and documenting the information generated through the use of Project Risk Management. “The risk register can be said to provide a formal mechanism to document the identified risk, their associated probability of occurrence and impact value as well as

Manage Finance

2420 words - 10 pages Contents 1. INTRODUCTION 2 2. SCOPE 2 3. OBJECTIVES 2 4. RESPONSIBILITIES 3 4.1 Board of Management 3 4.2 Chief Executive Officer 4 4.3 Staff & SMC Members 4 4.4 Everyone 5 5. RISK MANAGEMENT PROCESS 5 5.1 Context 5 5.2 Identifying Risks 5 5.3 Analyzing Risks 7 5.4 Evaluating Risks 10 5.5 Treating Risks 11 6. MONITORING AND REVIEW 13 6.1 Procedure 13 6.2 Risk Closure 13 7. COMMUNICATION AND CONSULTATION 13

Credit Risk Analysis in Standard Charter Bank

562 words - 3 pages process. • Aggregating exposure limits by customer, sector and correlated credits. • Credit mitigation techniques: collateral; termination clauses, re-set clauses, cash settlement, netting agreements. • Documentation: covenant packages, ISDA and CSA and other collateral agreements. • Portfolio techniques • Portfolio management objectives: balancing the risk appetite and diversification to maximise risk adjusted returns. • Diversification

Information Technology

1710 words - 7 pages Environmental Risk Management”, of Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements. Read Ch. 24, “Conclusions”, of Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements. Read Ch. 25, “Risk Management Process Checklist”, of Project Risk Management Guidelines: Managing Risk in Large Projects and Complex Procurements. Read the Week Three Read Me First. Review this

Risk Management

2511 words - 11 pages define activities that should be performed for successful risk management, the one that will enable software development projects to perceive risks as soon as possible and to solve problems connected with risk materialization. We also propose a risk-based approach to software development planning and risk management as attempts to address and retire the highest impact risks as early as possible in the development process. Proposed strategies should


655 words - 3 pages and advises senior management on the risks associated with particularly large and complex transactions. Corporate Risk is responsible for calculating, monitoring and reporting our market risk capital to regulators. By attributing risk capital to individual trading businesses, the group also plays a direct role in the strategic risk/reward decision-making process. There are various other Controllers Groups which include but are not

Related Essays

Risk Management Process Essay

1206 words - 5 pages Risk Management process- Comparison with Individuals and Corporate Entities:Literally speaking, risk management is the process of minimizing or mitigating the risk. It starts with the identification and evaluation of risk followed by optimal use of resources to monitor and minimize the same.Risk generally results from uncertainty. In organizations this risk can come from uncertainty in the market place (demand, supply and Stock market), failure

The Process And Preventing The Risk Of A Tax Audit

2590 words - 11 pages Running Head: THE PROCESS AND PREVENTING THE RISK OF A TAX AUDIT 1 The Process and Preventing the Risk of a Tax Audit By Marivic Engquist National American University August 12, 2012 THE PROCESS AND PREVENTING THE RISK OF A TAX AUDIT 2 Abstract This paper illustrates how an Internal Revenue Service (IRS) audit strikes fears in

Management Essay

302 words - 2 pages risk management process Case study Advantages: It will be holistic. Disadvantages: It will require extensive resources to conduct it properly,   especially if the scope of the risk management is large and covers a wide range of activities across the divisions; very large number of policies and procedures; and is taking into account differences in each state, territory, country. The scope of a risk management strategy is entirely reflective of the organisation, its activities and risk profile. It can also be indicative of the following: past history, knowledge and experience of risk management held by senior management,...

Risk Management Essay

2497 words - 10 pages or minimized with a good risk management process. However, for those unexpected events that are unforeseen by the project team or organization, an effective and appropriate risk management process will be essential. An experienced and proactive risk management team can help to react and solve the problem effectively. The impact of the unexpected event can be reduced by developing plans to minimize its effect. Risk management is a concern of