Risk Management and Its Criteria

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 or threat is common and found in various fields of daily life and business. This concept of risk is found in various stages of development and execution of a project. Risks in a project can mean there is a chance that the project will result in total failure, increase of project costs, and an extension in project duration which means a great deal of setbacks for the company. The process of risk management is composed of identifying, assessing, mitigating, and managing the risks of the project. It

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.

According to IRM-AIRMIC-ALARM (2002), risk management actually defines every organisational strategic management; it comprises the process which identifies and treats the internal and external risks and adds sustainable value to the organisation and its stakeholders by decreasing the probability of not achieving the organisation’s overall objectives. The specific institutes suggest that risk management lies in the strategic, tactical and operational levels, and its embodiment in all tasks and roles is required; it is a consistent manner for an organisations’ operation, which leads to effective decision making, efficient allocation and protection of the organisational assets, and enrichment of the organisational

The metrics that best work to measure Xemba Translations performance on this project is project diagnostic metrics. While not all risks of a project can be mitigated, using this objective data based on these metrics will make a huge difference to mitigate risk. Using diagnostic project metrics is like using a thermometer to assess the projects current status. This can help eliminate or mitigate the issue before it becomes unmanageable at the close of the project. This can help avoid the, should have, could have, would have moments that may happen once the project closes and gets reviewed from a retrospective project metric. With the diagnostic project metric when an issue does arise a contingency plan can be created if there is a trend

Today’s society has become a world of disconnected, unpredictable happenings and challenging events. (Yoder, With this plan in hand, a Risk Plan can help foster a firm understanding of and methodology to risk, and how it affects the entire organization which can lead to more successful projects and business models when put into place. A Risk Management Plan will help provide a structure for identifying risks and can stop complications from occurring that can impend the accomplishments of the project.

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)

Risks are the potential events that may occur in the course of a project, and if they occur would adversely affect the project scope, schedule, quality and/or resources. Further, when risks occur they bring with them consequences. Conversely, risk management is the process with which risk management planning, identification, analysis, response and control is done on a project to mitigate its effects. The goal and objective of risk management is to reduce the chances and effects of adverse events to the project objectives.

Risk is a threat of destruction, injury, liability loss or any other negative incident caused by external or internal environments. Risk is unpredicted and nobody can guess it might happen in the near future. All of the projects exist risk and the project manager is responsible to identify those risk, which is a part of risk management planning process. Risk management is the procedure of distinguishing risk and reduce risk level. The risk management methodology decides the actions, strategies, instruments, and group parts and obligations regarding a particular task. A good risk management suggests control of possible future destruction and precautions for that risk. The risk management plan represents how administration will be organized and performed on the venture. As a management procedure, risk management is utilized to identify and preserve a strategic distance from the potential cost, timetable, and implementation or specialized dangers to a framework, take a proactive and organized way to deal with negative results. The risk management approach and arrangement operationalize these administration objectives.

Risk management is the demonstration or routine of managing risk. It incorporates getting ready for risk, recognizing risks, examining risks, creating Risk reaction techniques, and observing and controlling risks to decide how they have changed.

All projects are subject to the effects of uncertainty. The uncertainty creates the need for organizations to be aware of the many different types of risk they will be challenged with for the duration of the project. To understand the level of risk the organization must have a defined process for project risk management to include their risk appetite, risk tolerance and risk thresholds. Project Risk Management is the processes of conducting risk management planning, identification, analysis, response planning, and controlling risk on a project. (PMI, 2013, p. 555). The PMBOK Guide lists six processes of Project Risk Management as “Plan Risk Management, Identify Risks, Perform Qualitative Risk Analysis, Perform Quantitative Risk Analysis, Plan Risk Responses, and Control Risks” (PMI, 2013, p. 309). Risk management planning has been identified as an important management approach to dealing with uncertainty in projects, aiming to minimize threats and increase opportunities. Understanding each of these processes will give you a clear picture of the importance that risk management plays within a project.

This plan is to identify risk issues and the options for controlling them. The management of risk is to assess and prioritize what has been identified in an unforeseen event. To lower the probability of occurrence and loss are controlled in descending order, where the greatest risk with grander loss are handled first. In the ISO 31000 “Risk Management – Principles and guidelines on implementation” the process of risk management consists of several steps in evaluation. These risks can have significances that effect financial performance and character of the company. The use of the ISO 31000 standards in assessing risk can serve as a benchmark for providing principles in effective administration and company control. (ISO 31000 - Risk Management, 2009) By providing generic guidelines can improve the effectiveness and standards of managing risk. Defining what needs to be done and by whom is summarized into key concepts of the organization in complying with the legal and regulatory requirements in arising threats.

There are five steps of the risk management process: identifying the risk, analyzing the risk, evaluate the risk, treat the risk, and monitor or review the risk (“What Are the 5 Risk Management Process Steps?”). Step one would be to identify the risk. This step involves finding all the possible potential losses. There are some major issues that can cause a risk in risk management, such as, worker compensation, climate change, and increasing cost. A risk manager can use a variety of information to identify the loss exposures, such as, physical inspection, financial statements, and questionnaires. There are a number of important loss exposures that can be identified using a variety of information including: property, liability, business income, human resources, crime, employee benefit, foreign, and intangible loss exposures. (Rejda and McNamara, 46) All of these important loss exposures can help a risk manager to identify and avoid a risk.

There are all types of risks involved if one is small business manager or a manager of a larger corporation. The responsibilities on a day-to-day basis can be vital towards the success of the organization. The company facilities can be associated with working capital, production, and sales. The manager would need to reflect a common awareness of the potential risks that can be involved. Although, there can always be a risk involved in an organization, the manager would and should have the capability to identify the type of risks that the company can surface. In this paper, one will provide a further explanation on the various risks and along with presenting a way for financial managers on a moderate approach towards these risks.

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