Questions On Risk Management Culture Essay

Enterprise Risk Management (ERM) is a series of processes used to identify risk, implement strategies to address risk, and monitor impact on the organization. Indeed, an effective ERM will consist of a corporate profile, which is a record of key risks that would hinder the organization in achieving their key objectives (Fraser & Simkins, 2010). Ideally, the risk profile is created as a tool to communicate with the Board of Directors, but may be used as a means of communication with all levels of management (Bethel, 2016). Typically, there are variations of the risk profile based upon the level of management, such as duration, types of risk, and purpose (Fraser & Simkins, 2010).

Regardless of the type of project being initiated, planned and implemented, building a culture of risk management is indispensable for the successful completion of the project.

Risk management is a process for identifying, assessing and prioritizing risks of different kinds. Once the risks are identified, the risk manager will create a plan to minimize or eliminate the impact of negative events. A variety of strategies is available, depending on the type of risk and the type of business. There are a number of risk management standards including those developed by the Project Management Institute the International Organization for Standardization the National Institute of Science and Technology and actuarial societies. Organizations uses different strategies in proper management of future events such as risk assumption, risk avoidance,

Risk refers to a likelihood, probability, a chance that a loss may occur in a given organization. Most of the times, there is a high risk when there is vulnerability. In this case, vulnerability refers to a weakness that the organization has. Risk assessment refers to the process of identification of potential hazards and proper analysis of the expected losses if those hazards occur (Homeland Security, n.d.). Risk assessment as a way of profiling risk according to impact to the organization. Some organizations have business impact analysis exercises geared towards determination of potential hazards based risk assessment approaches. Organizations’ risk differ depending on the size and the type of business they are doing. The disparity in organizations’ risk call for different adaptation of risk assessment approaches. Even with the disparities of the businesses, proper risk management not only ranks the risks according to the seriousness but also identifies the best methods to control risks in an organization.

Risk Management issues are often handled at the facility where the problem(s) exist. One of the duties of Risk Manager’s is to communication and collaboration between departments within an organization in question. In addition, to sinking risks, and cutting costs in order to promote process efficiency .By analyzing incident reports is one way to correct current problems, and future problem areas. Risk managers are also responsible for certain criteria that must be met in order for full participation in certain government and state reimbursement programs ("World Health Organization," “n.d.”). Risk Management is a structured approach to managing improbability, related to a risk, through a structure of human interaction.

Background- In its most basic sense, risk management identifies, allows assessment, and prioritizes risks that are associated and central to an individual project or organization. Risk management allows the organization to be proactive in preventing or mitigating risks, for improving certain processes within the organization, and with the hope of preventing fiscal exposure. However, in almost every organization there are risks individuals are unique and do not always perform at a high level of safety; mechanical or design failures exist, construction projects have supply or labor issues, there are uncertainties in computer or data modification, of course natural disasters, and even deliberate attacks from competitors, etc. Because this is such a common occurrence, national and even international standards have been developed in conjunction with the insurance and regulatory institutions to at least provide basic guidelines to minimize risks risk (International Organization for Standardization, 2009).

Staffan Engstrom, the strategy director for a major UK company, explains what Risk Management is and why it is important in his video. Staffan does not have to use complex words and does not have to carry out a long elaborate speech. Staffan’s message is simple. This is what he said,

Each flowchart step is placed in the “Lane” for the group responsible for completing the task (Marketing, Sales, HR, etc.).

For Riordan to adopt COSO Enterprise Risk Management (ERM) practices in a new initiative, they are more likely to have a successful implementation if they have the full support of the board and chief executives. The ERM plan should not only be compatible with existing organizational goals, it must also be integrated into the culture so that risk management can become salient at all levels of the organization. Even though risk management should be spread throughout the culture, the aims of the program should be concise and focus on a small number of the top risks. Two of these risks that should definitely be among the top of the list are compliance and legal liability that might arise from the company's operations. This report will outline some of the key concepts that should be embodied in the new COSO strategy at Riordan.

All the decision that the business made is affected and has came into consideration of the key stakeholders and the risk associated with it. The process of risk identification, risk analysis and risk evaluation, or known as risk assessment (Garlick, 2007), in this context has applied the risk management process model AS/NZS 4360:2004. Tools like risk register and radar diagram are also utilized to facilitate the evaluation of business risk culture.

develop a methodology for quantifying risks, or should each situation be addressed individually? Can we have both a quantitative and qualitative risk evaluation system in place at the same time?

Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. (Lecture notes)Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001)

Enterprise risk management is a 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) This definition, provided by Committee of Sponsoring Organizations of the Treadway Commission (COSO), captures key concepts fundamental to how companies and other organizations manage risk, providing a basis for

It is important to know how to define risk management capability. (Hillson, 1997) developed a risk maturity model for organisation to assess their current maturity, identifying new ways of improvement of risk management capability. There are four levels of risk maturity which are Naïve (level 1), Novice (level 2), Normalised (level 3) and Natural (level 4). The description of risk management maturity level are as follow.

One well accepted description of risk management is the following: risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. In order to apply risk management effectively, it is vital that a risk management culture be developed. The risk management culture supports the overall vision, mission and objectives of an organization. Limits and boundaries are established and communicated concerning what are acceptable risk practices and outcomes. Since risk management is directed at uncertainty related to future events and outcomes, it is