Risk Assessment and Risk Management

insecurity Assessment and essay ManagementAssessment 4 fortune ManagementIn the world of business, run a bump of exposure of exposure is always associated disregarding of how small or big your business is. It is requisite to draw an excellent management figure to shelter the entities reputation and assets. To realize a severe management device a luck management process, is a process that aides risk passenger vehicles to set up priorities and assists in ensuring comprehensive management efforts, is being utilized.Risk management process is imperturbable of six move namelyDetermine the preys of the organisationIdentifying image to liberationMeasure those same exposureSelect alternativesImplement a solutionMonitor and review the outcomesThese steps be essential in drafting a good management plan to further recognize these steps this paper allow expound its application and its advantages to the enterprise.Determine the objectives of the organisationEach organizati on has its stimulate and unique objectives. These objectives be the reason a fellowship is being established and also guides them for future development. To be able to identify a risk in an enterprise a thorough understanding of the entities objective should be done by the risk managers. If risk managers completely understood the organisations objectives it will enable them to single out threats and opportunities the enterprise will face in the future and lot create solutions or pr event risk associated with an organisations future actions. An example will be a companys objective is to be globally competitive the risk managers will create a plan that will help the organisation chance upon its objectives exclusively hold back the risk associated with it like policies and laws of new(prenominal) country or the consumer needs for the product and service.Identifying exposure to acquittanceLoss exposures include want of financial assets, physical property, human loss and loss of good will. These are the risk that a risk manager might identify when assessing thinkable risk of the company. These losses send packing be prevented if proper risk identification is done before any untoward event occurs. Loss of financial assets is usually due to liability judgement, non-compliance and lawsuits. Loss of physical property can be because of bad investment, land protestership problems and natural disasters that may damage the property. Human loss is related to death, soil or resignation of employees that can affect the operations of the company. Reputation is very important for a company to function if consumers trust an organisations services and products this will increase their reputation but otherwise it can course to loss of good will.Measure those same exposuresAn organisation not only needs to identify the risk or loss but as advantageously as measure the impact of those risks to the organisation. These can be achieve by using different tools is asse ssing risk for example a client complain and contentment survey reports. This survey will help risk managers identify the areas where in they need modifications and improvement let as say in the survey patients complained that the nurses are rude therefore the managers should assess the employees in that incision and try to do necessary ad fairishments to increase client satisfaction at the same time prevent human loss. Another one is incident reports these are usually a common tool utilise to identify risk it is a report made by employees that includes events that occur beyond the normal perfunctory operations. Others are genetic occurrence screening, employee compensation claims data, contact leases and agreements and informal discussion with managers and staff these can be used to discover the risk and its effect on the organisations operation.Select alternativesAs stated earlier risk is inevitable in handling these risk a risk manager uses risk treatment strategies categor ise into two which is risk control and risk financing. Risk control is preventing losses and justifying the effects of losses. It is composed of triplet techniques which are exposure avoidance, loss prevention and segregation of loss exposure. Exposure avoidance is the reduction of loss to zero if focuses on the eradication of the possibility of loss to occur. It is used when a strength risk can be critical threat to the organization and there is no way to reduce or carry those risks. Loss prevention gives emphasis on the possibility of an occurrence of an event and reduction of loss by educating staff and reviewing of policies and procedures. Loss reduction reducing the severity of loss an example is having fire drills, alarm remains and immediate incident investigation to an event. Segregation of loss exposure this is distribution of assets like supplies to different subdivision to prevent loss for example in the first floor of the facility the flood damaged the supplies of m edicines but on the second floor where other supplies are placed these can be used and distributed to the other department reducing the loss and continues the operations of the facility.Risk financing is paying losses that have happened it is composed of two techniques which are risk retention and risk transfer. Risk retention is taking responsibility of the effectiveness losses which is related to the given risk and creating plans to cover the monetary consequences of that certain loss. Risk retention are usually used for loss that cant be transferred like efficacious laws as hale as small risk like paying for personal property damages like loss of a mobile phone, broken chair and others. Risk transfer is transferring of the financial responsibilities of the organisation to a tertiary party like insurance companies.In selecting a solution to those losses the risk manager should determine which technique will be suited for the current risk. The risk manager should impinge on to it that before choosing a solution he should determine which alternative has a lesser effect on the organisations normal operations and which one is cost effective for the organisation.Implement a solutionImplementation of the solution is putting the plan into action. This will involve the use of the technique identified by the risk management professional which is the beat out to prevent further organisational loss. This technique will be assumed by other department managers inwardly the organisation. For example if the risk manager professional identified that the best technique risk financing and risk transfer the risk manager may include selecting an insurer and creating a good insurance indemnity for the organisation.Monitor and review the outcomesThe last step in risk management process this is to check the persuasiveness of the risk management program. It is an approach done by risk managers, higher management, different department managers, and legal counsel and claim managers to evaluate the risk and its impact to various areas of the organisation. This will enable the organisation to see the flaws and further improve the risk management plan of the organisation. The evaluation is done by comparing the yearly report made by the risk manager against the bench mark they have created as well as the previous annual reports in the past years.Risk assessment process is defines as an unionized process for identifying and evaluating events that effects the accomplishment of objectives in a positive or negative way. These events can be related to political, legal, environmental, social and competition. It can also be an internal factor like human resource, organisational processes and infrastructure. Risk assessment like any process is made up off different steps which areIdentification of relevant business objectivesIdentifying events that could affect the achievement of objectivesDetermining risk toleranceAssessing the inherent likeliness and impact o f risksEvaluating the portfolio of risk and determining risk receptionsAssessing relief likelihood and impacts of risksIdentification of relevant business objectivesObjectives are the goals that an organisation wants to achieve in order to prosper in the business world. Each organisation has its own set of objectives that may be the same or different from other organisations. Through these objectives a risk manager will be able to extract different risk that could threaten the organisation. Objectives can be constructed by using the SWOT analysis wherein it determines the strength, weakness, opportunities and threats. After the objective identification and finding out the possible risk a risk management plan can be started.Identifying events that could affect the achievement of objectives harmonise to an organisation objective the risk managers should create an initial inventory of undertakings that may affect the accomplishment of the organisations objective. These events can be from within the organisation or from the external environment. The internal factors are organisations policies and processes, the human resource, technology and instruction that are taken from internal sources. Meanwhile, external factors are related to politics, economics, legal, sociological and environmental. After assessing these factors the risk manager can then categorise them as either a threat or an opportunity for the organisation. scripted annual reports of internal and external factors will provide the risk manager of accurate numbers and circumstances to pinpoint which threats needs immediate action.Determining risk toleranceThe acceptable direct of deviation comparative to the accomplishment of a specific objective of an organisation is called risk tolerance. It is a percentage or level in which a risk can be accepted by the organisation but have a certain range of limitation that could still enable an organisation to operate.Assess inherent likelihood and impact of riskIn risk assessment it is part of the process to identify the events that has a potential impact on the accomplishment of the organisational objective. These events should be considered to be risk and has to be evaluated based on the chances of it to occur. It is essential that this event should be assessed on natural basis without bearing in mind the risk response that already exists. An inherent risk map should be assess by a risk manager, it is a portfolio view of risk that aides analysis and action, to determine the which risk has more effect and should be a prioritized for an immediate response.Evaluating the portfolio of risk and determining risk responsesAs we all know risk is inevitable it cannot be fully eliminated if an organisation wanted to have a return of investment they should take on well-nigh risk associated for their actions. Evaluating the risk portfolio will enable the risk manager and the organisation to see the impacts of the risk to the organisations obje ctives and goals. It will also evaluate the effectiveness of the risk response they have made and further improve if such(prenominal) risk arises in the future. Risk tolerance varies depending on the risk type as well as the responses to those risks so it is essential to assist the risk response and the action given and its effectiveness.Assessing residual likelihood and impacts of risksAssessing residual risk will help evaluate the effectiveness and appropriateness of the risk response if it is in within the acceptable level or within the risk tolerance of the organisation. It is assessing the internal checks and balances are still in place within the organisation.Therefore, we could see how essential risk management is to an organisations progress. Risk management is not just a simple work just to identify and provide a solution but it is a systematic and scientific way of identifying, implementing and evaluating the effects of risk to the organisation. The organisation will alway s face risk to be able to move and not stagnate on the current status they are in. It is a must that a risk management professional understand the organisations objective for him or her to extract and create an excellent risk management plan. It is also important to evaluate the effectiveness of the risk management plan and see to it that flaws are modified for better result in the future.Bibliography Southern Cross University (09 October, 2014). http//scu.edu.au/risk_management/index.php/8/ integrated compliance insight. (09 October, 2014). http//www.corporatecomplianceinsights.com/key-elements-of-the-risk-management-process/ Internal Auditor (10,October, 2014). https//iaonline.theiia.org/understanding-the-risk-management-process Health and Safety Executive (10 October, 2014). http//www.hse.gov.uk/risk/controlling-risks.htm Work and safety blogs (10 October, 2014). http//rospaworkplacesafety.com/2013/01/21/what-is-a-risk-assessment/ Southern Cross Healthcare. (10 October, 2014). h ttps//www.southerncross.co.nz/Portals/0/Group/Insurance%20Prudential%20Supervision%20Bill%20220609.pdf