Risk Management : The Changing Landscape

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.

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).

Because of rapid economic growth in XXX over the past years has increased the fear of major business failure, risk has become an overwhelmingly dominant business topic. As a result, top managers are now focusing on risk management in their companies. As each business entity struggles with its own set of needs and circumstances, the need and flexibility to address this continuously changing and volatile economic environment, would be extremely challenging and fulfilling to me.

Collier (2009) claims that the fundamental role of the Board of the directors in a company is to apply risk management and to review the performance of the organisations’ internal control procedures; these two principal processes will support the Board in the setting of the strategic targets, the transformation of the targets into real products and services, the effective business overseeing, and the realistic reporting to the external stakeholders. Apart from the Board, the author suggests that an effective risk management framework must be facilitated by a risk management group, a chief risk officer, external and internal audits, and a mature organisational culture disseminated to the line managers and employees. Under the same concept, Hampton (2009) presented a flow gram that suggests the path towards the establishment of enterprise risk management, starting from the risk recognition and ending to the standardization of a risk evaluation process, having prior involved the Board, the risk owners and the accountable staff.

The impact of the risks on global business it is dramatic in our days, changing the entire look of the industries and financial services. Some risks could be anticipated and identified but some could not. Companies now are using more and more key steps and principles to better manage the risks by;

For any company, risk management is an important strategy to have in place. There are a number of factors that need to be reviewed in order to decrease the risk of failure. A presence of a Risk management program would not only set the framework into place to save time, money, and rework but also increases the chance of success for that particular company.

We want our Risk functions not only to ensure compliance with existing rules but also review the entire operation of the company through a broad, principle-based lens. CariJam generally believes that the risk function will play a vital role in collaborating with other functions to reduce risk. We hope that the risk function’s tasks will ensure that compliance considerations are always top of mind and not addressed perfunctorily by businesses after they have formulated their strategies or designed a new product.

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.

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)

There is no organisation that is not faced with risks because every company has its own unexpected negative outcomes. According to Hopkin (2012, xviii) risk is everywhere and derives directly from unpredictability. The process of identifying, assessing and managing risk brings any business full circle back to its strategic objective for it will be clear that not everything can be controlled. Risk management involves a healthy dose of both common sense and strategic awareness coupled with an intimate knowledge of

Risk management is a management activity, purposing to facilitate a consistent imple-mentation of risks and operational policies (Bessis J., 1999). In the banking sector, cred-it risk is one of the concerns of risk management.

Risk management provides organisations with common tools to deal with uncertainty. (Hillson, 2006) Risk management aims to build a communication between internal parts of organisation. This language of communication is given name by many risk management authors as “risk language”. Failure of communication between internal departments results in failure of success, as well as rises the risks the organisation may face in future due to lack of communication. The one of the most important principles in risk management is being the integral part of whole organisation. The organisations failing to integrate its risk management to entire organisation, fails to establish an effective risk management policy. The risk management implemented separate from organisation tends to be ineffective, as a result of less engagement into the processes within organisation, poor communication with other departments (Beaumier, 2012). Risk management should involve all staff and everything within organisation. Human

Managing risk is central to many corporate strategies. Reputations that take decades to build can be ruined in a matter of hours through incidents such as environmental accidents. “The definition of risk management for organizations has broadened, expanding beyond the tangible and quantifiable issues to the less tangible and more qualitative forms of risk. The bounded definition blinds executives to considerable opportunities that come

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

The phrase “risk management” consists of two words “risk” and “management”. According to Hubbard (2009), risk is the probability that a loss or disaster could happen. Risks possess two characteristics. One is uncertainty that an undesirable event may occur. And the other one is loss or disaster due to this unwanted event (Wallmüller, 2002). For an organization, an undesirable event could be anything including but not limited to a natural disaster, default of a major borrower, hacking of sensitive customer data, political unrest around a foreign office, workplace