An Overview Of The Risk Management

Published Date: 02 Nov 2017

INTRODUCTION:

Risk management is the anticipation process for engage in risks. Risk management include analyzing risks, accomplishing ways to prevent or mitigate those risks and evolving a crisis plan in case risks cannot be anticipate or abstained .

Define Risk Management in Health Care | How.com http://www.ehow.co/m/about_6398509_define-risk-management-health-care.html#ixzz2KW5NgBDE@

CONCEPT OF RISK MANAGEMENT:

Hazard

Risk

Risk:

A situation involving exposure to danger.

The possibility that something unpleasant will happen.

Hazard:

A biological, chemical or physical agent in, or condition of, food with the potential to cause an adverse health effect ( Codex Alimentarius Commission)

A condition or physical situation with a potential for a undesirable consequences (Society for risk analysis) http://www.dfid.gov.uk/r4d/PDF/Outputs/HPAI/WKS081002_Annex5.pdf

Task 1:

An Explanation of Risk Management

The risk assessment consist of five step which is mentioned below

Identify the Hazard

Decide who might be harmed and how

Evaluate the Risks and decide on precaution

Record your findings and implement them

Review your assessment and update if necessary

Identify the Hazard

First you committal to practice how human-being could be damaged. When you labor in a place at all working days, it is clear to fail the notice to some hazards, so at the moment are some guidelines to assist you analyze the ones that matter:

Pace around your establishment and attention at what could honestly be justified to cause injury.

Ask your Team members or their deputy what they thought. They might have announced things that are not instantly recognized to you. For communication on how you could do this

See the HSE website. HSE to issue practical guideline on where hazards to happen and how to command them. There is much guidance on the hazards that might change in your business.

If you are a part of a trade association, an acquaintance them. Many give to rise very helpful guidance.

Check producers’ instructions or spread sheets for chemicals and equipment as that could be very guileful in orthography out the hazards and to move them in their true Representative.

Conclude who may be Hurt and how

For each peril you a requirement to be clarion about who may be injured; it will assistance you recognize the best way of accomplish the risk. That does not intend listing anyone by name, but to a certain extend analyzing groups of human-being.

Assessing the Risks and agree on precaution

Having traced the hazards, you then acquire to agree what to carry out about them. The law desires you to do entirely ‘moderate practicable’ to take care people from harm & hassel.

First, see at what you are already actioning, anticipating about what command you have in abode and how the assignment is organized.

Can I chuck the hazard completely?

If not, how can I command the risks so that evil is unlikely?

When dominating risks, apply the fundamental below, if possible in the following order:

try a less hazardous option (e.g. Exchange to utilizing a less risky chemical);

Anticipate access to the hazard (e.g. by attending);

Systematize work to decrease exposure to the hazard (eg embed barriers between pedestrians and traffic);

Record your analyzing and deployment them

Embedding the outcomes of your risk assessment into operation will make a dissimilarity when examination after people and your business.

Jot it down the outcomes of your risk assessment, and apportion them with your staff, motivate you to do this.

Evaluation your assessment and modernize if necessary

Few establishment stay the identical. Sooner or later, you will accompany in new equipment, substances and procedures that could cutting edge to new hazards. It produce sense therefore, to evaluate what you are carry out an ongoing basis.

How Risk Management affects different business functions

The business function is basis on the mission of the organization. There have under mentioned below

Internal Business Function

External Business Function

Internal Business Function:

The internal Business functions are contains of the major three departments.

Production

Selling

Support

Production:

The production are includes research & development,production & quality and Distribution/ logistics though.

Selling:

The selling department are includes Sales, Marketing, Marketing Research and Advertising though.

Support:

The Support departments which includes Buying/Purchasing, Management Accountancy, Chartered Accountants, Computing, HR/Personnel, Recruitment Consultancy.

External Business Functions:

There have two external functions are detailed below.

Management Consultancy.

Public Relations.

http://www.google.co.uk/imgres?imgurl=http://www.kent.ac.uk/careers/pics/business-Functions2.jpg&imgrefurl=http://www.kent.ac.uk/careers/

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Every business faces the same 5 key risks. The affect on internal and external function of the business. These are under pinned below.

Development Risk:

Can the original product or services conception actually be actualize?

Manufacturing Risk:

If the product could be establish, can it existent be developed in fabricate value?

Marketing Risk:

If the product could be arranged, can it be persuaded effectively?

Financial Risk:

If the product can be persuaded effectively, will the develop company be beneficial and can the gain actually be apprehend in a form that admit investors to receive cash.

Growth Risk:

If the establishment can acquire operating at singe level, can appropriateness be maintained as the organization grows and derive.

Evaluate the methods of assessing risk in business.

Risk Assessment Context:

Estimation of the overall likelihood of occurrence of the adverse event considered.

Identification of the steps of the pathways having high risk of occurrence or high impact on overall risk estimate.

Approaches of Risk Assessment:

Risk Assessment systems:

-OIE vs Codex Alimentaris.

Risk Estimated:

-Qualitative vs Quantitative Approach

Risk Assessment Methodology:

Requirements:

- Clear definitions of terms:

Risk Questions

Hazard Identification

Qualitative Risk Assessment: risk categories and combination matrix

Transparency:

A risk assessment must be clearly set out, transparent and fully referenced in the resulting report.

The main step of risk assessment are

-Framing the risk question

-Identify the hazards

-Outlining the risk pathways

-Identifying data needs

-Collecting data

-Assessing the Risks

http://www.dfid.gov.uk/r4d/PDF/Outputs/HPAI/WKS081002_Annex5.pdf

Evaluation of Approaches to managing risk in Business

ERM Programme:

A development, accomplished by an individual board of directors, management and other personnel, applied in strategy development and beyond the activity, designed to analyze potential occurrence's that may influence the individual and control risk to be not beyond its risk appetence, to support acceptable assurance attend the acquirement of the individual objectives.

Purpose and Objectives:

The aspiration of ERM is to actualize , assure, and improve member value and the credit union's activity by managing the concern that could authority achieving its aspiration. Implementing an persuasive ERM achieves the following key objectives.

Oversight: All analytical risks have been classify and are being advocate and controlled under a comprehensive approach expected with the board admire risk craving statement.

Owner and Authority: The control of risk is authorize to management entity who are accountable for analyzing, appraising, harshness and observation risk exposure.

Assurance: The Board, management and team members have moderate that risk is existing appropriately hardship within enumerate levels to bring importance to the establishment.

Benefits:

A credit union which opinion implements ERM should excluding the following benefits:

More performing use of expedient and resources,

Extend likelihood of efficience loss

Lower accomplish/auditing expense

Earlier discovery of illegal activities

Less surprises

Focus on dignity cost preventive rather than huge cost determination strategies

Role & Responsibilities:

The main role & accountability of the Board and Management are abstracted in:

The Board of Directors take control the risk portfolio of the credit union

Management takes agility to administer the risks to an satisfactory level

Manage of ERM framework - profits assurance on its capability

Expand processes to contraption Enterprise Risk Management in the credit union

Expressed risk appetite/risk compassion in policy

Analyze process to establish risk profile

The Methods:

ERM is an current and cyclical process. The Board and senior management decided the accent for enterprise risk management in the credit union. This contain authorize the credit union’s risk demand and how risks will be analyze, appraised and control.

Reporting

On - going re-evaluation and update of ERM process & risk

Monitoring

Risk Identification

Risk Assessment & Measurement

Risk Response & Action

ENTERPRISE RISK MANAGEMENT CYCLE

http://www.dico.com/design/Publications/En/ERM%202011/ERM_Framework_September_2011.pdf

TASK 2 RISK ASSESSMENT

All the main drivers of business risk:

This is my individual priority record of essential risk drivers that all entrepreneur and all investor should analyze and decrease in beginning a business:

Crew experience and complexity risk. I am exchanging the ideas about twain the experience and track record of the establisher in beginning a business, as well as their exposure and knowledge of the business authority. Like many professionals, when I achieve a business plan, I twist first to the establisher section to visit if it is a organized team who has been accomplish and done that.

Advertise and opportunity risk. There is everlasting less risk with a apparent fined complications in a huge and evolving market. All the human-being in China is a ample and burst-forth market, but all the human-being with cancer is much more apparent. It’s difficult to earn money in a compress market.

Aggressive risk. Anticipate seriously about the numeric and power of your competitors. Having not anything is a red flag (means no advertise), but acquire more than a couple of big ones may means this is a busiest space.

Financial risk. Very few establishments can be embarked without money. You as the establisher will be anticipate to put-through your own "skin in the game." The business plan should be sensible about how many cash will be needed to break-even point, and how huge amount to the given will be for entrepreneur in the tenure of first five-year timeframe..

Advertise entry strategy risk. The alternatives of an improper pricing, marketing, or distribution strategy is a huge potential risk. .

Constitutional and economic risk. Sometimes establisher are fair in the incorrect place at the incorrect time. Recessions are a sturdy time to sell expensive goods. Improperly-developed countries might have a robust need for inherent product, but are often doubtful and hazardous. Four actual include tax rates, tariffs, appropriation of assets, and recovery of profits.

Technology risk. New technologies, particularly those distinguish as "paradigm shifts" or "disruptive" might have longer and costly agreeable cycles, or might run into changeable performance or productibility problems. Medical technologies have expensive legal testing necessity, endorsement processes, and insurance confirmation.

Businesses with high away rate risk. Assertive business sectors have recorded high lack of success rates and are regularly avoided by investors and many establishers. These contains food service, retail, consulting, work at home, and telemarketing. Over the Internet, I would indicate new social networking sites, and new matchmaking sites.

Operational risk. Some establishment require scope support or executive infrastructures. Level small operations can have collapse of specialized equipment and complicated support processes.

Environmental risk. A nuclear reactor assembled on an convulsion fault line is a high risk. Analyse your business and locality for sensitivity to abundance, hurricanes, and catastrophic contamination problems, like the oil spill in the Gulf of Mexico.

http://www.examiner.com/article/ten-high-risk-drivers-every-entrepreneur-faces

Impact of the different type of risks

Business process outsourcing risk:

Despite the fact that outsourcing leads to important benefits for an organization, but it includes some risks that need an effective and serious management .During the last two decades, companies reported some dangers and threats that are resulted from outsourcing of central and important activities in companies which causes competitive advantages for company, and they try to outsource their subordinate activities.

- measuring possibility and severity of damages. (Lowrance, 1976)

- The consequences of an event that affect the project (Kliem and loudin, 1997)

- The possibility of a negative event with bad consequences (Haimes,Y.Y,1998)

- The potential failure point (Trepper, 1998).

Strategic Risk:

Most of outsourcing activities result in strategic risks for banks because most banks definitely need strategy development, customers' satisfaction, and effective services transference (Adeloy, 2002).So, strategic risk could be created by the lack of proper programming, and technology implementation such as internet, or

because of failure in assessing outsourcing decisions. (Mann & et.al, 2001)If there are some outsourcing causes, there will be various strategic risk that should be assessed; 1- organizations provide particular beneficial information for external organization (Kogut & Zander, 1992).

Main concern that result form strategic:

1- Third person may do some activities that are not compatible with general strategic goals of institute.

2-failure to do proper checking of outsourcing services providers.

3- Lack of specialty for supervising services providers (Publications for supervising the committee of BallBanking).Bandyopadhyaye suggest that organizations should understand these risks to control strategic risk.

Psycho-social risks:

As companies may hurt their employees' spirit because of outsourcing, so they should consider their employees. Since the low level of spirit of employees have reverse effect on organizations utilization.

- Weak performance risk of internal company and measurement problems of contractor of the company

Some businesses as banking do not outsource all of their business processes, and this is because of performance risk. For this reason, there are potential bankruptcy cases in banking industry which threats banks' fame. So, managers should analyze services providers abilities. The lack of potential sources show

providers' inability. (Quelin & Duhamel, 2003). The most important issue about outsourcing is organizational commitment.

http://www.ijbssnet.com/journals/Vol._2_No._12;_July_2011/25.pdf

3 Analysis of Severity and likelihood of risk:

We all understanding that every foundation is risky. No hazard means no reward. Yet every entrepreneur has his individual "rules of thumb" on what induce a specific foundation too high a hazard for his contribution taste. You wants to know these direction to set your apprehension on funding.

Imperfection team. I have said most of the times that entrepreneur fund human-being, not planned. They attention for people with practical experience in the business concern of the beginning, and people with practical experience to amble a startup.

Actual high unsuccessful rate category. Assertive business sectors have actual high unsuccessful rates and are regularly avoided by entrepreneur. These contains food service, retail, consulting, work at home, and telemarketing. Over the Internet, I would accumulation new social networking sites, and new matchmaking sites.

Rely on government regulations. If your business model is rely on government approvals, that could acquire a long time, or require constitutional connections. All new medicines, for example, require costly and comprehensive testing for adverse before FDA approval. Of course, acknowledged approvals might also mean huge returns.

Ample initial Contribution required. If your foundation involves new electronic chips, that might need a big investment to ramp-up Production. By description, all but the huge investors will passageway, and it evolve into high-risk to every investors. New drugs frequently fall in this group, due to lengthy clinical trials and FDA approvals required.

Businesses with small return potential. Businesses with a low growth rate or a limited opportunity are concede high risk by entrepreneur, who get determine on portfolio occurrence over time. That throw out from concentration family businesses, small corner, and business operations with devolution growth.

http://gust.com/angel-investing/startup-blogs/2013/01/06/7-startup-high-risk-factors-that-scare-investors/

Suggested Risk Management Strategies

Developing an suitable risk management strategy proceeds considerable exertion and planning. One approach may be a good idea to attention at each occupational area of your business and aims your risk management strategy at a strategic, diplomatic operational and execution level.

Risk - Business Strategy Fit

Your business strategy and ambition should earlier be in place. Once you have analyse your ambition into assessable units, it change into easier to carry out the risk assessment exercise. Risk assessment and its administration must consistently roll back to your goals. Be accurate on what you agree are going to be particular corporate goals. I discover the putting things cascade into a matrix format helps me.

Strategic plan

Strategic plan is where you describe how you are going to accomplish your strategic goals.

Engagement plan

Your engagement plan is where you describe the achievement you require to do in the first year to accommodate your Strategical objectives.

Implementation plan

Your implementation plan is weekly, monthly and quarterly plans to accommodate your practicable goals.

Does whole fit

When you carry out your planning, be confirm your financial, marketing and sales, HR and engagement plan are all in accompany,Usually your corporate goals would either be financial or marketing &sales in attributes and your HR and engagement goals will be a operation of these two. You could not have a financial goal of gain revenues by 300% and curtail staff at all.

http://www.atlanticcanadabusinessblog.com/index.php/2009/04/23/strategy/how-to-develop-an-effective-business-risk-management-strategy/

Approaches to crisis management:

A FRAMEWORK FOR CRISIS MANAGEMENT & CRISIS MANAGEMENT PLANNING:

The United Kingdoms Department of Business , Enterprises & Regulatory Reform convey a contingency as an deviate situation, or even understanding, which is above the extend of everyday business and which pressure the activity, safety and acceptability of an organization.

Irrespective the size an institute affected , the primary aims or benefits of crisis management would normally include:

Ability to assess the situation from inside and outside the Institution as all stakeholders might perceived it.

Techniques to direct action(s) to contain the likely or perceived damage spread.

Better institutional resilience for all stakeholders.

Compliance with regulatory and ethical requirements, e.g corporate [social responsibility].

Crisis Management Model:

Successfully aim a contingency requires an comprehension of how to manage a contingency before it appears. Gonzalez-Herrero and Pratt actualize a four-stages of contingency management model development that includes: issue management, planning-prevention, the crisis, and post-crisis.

Management Crisis Planing:

No organisation move forward to cope with a direction that basis a significant separation to their business, eminently one that activate extensive media coverage. Public examination can analysis in a adverse financial, political, legal and government contract.

http://books.google.co.uk/books?id=3eua8cb24LAC&pg=PA33&dq=operation+environment+in+crisis+management+in+business&hl=en&sa=X&ei=TMknUYXcJ9SX0QWI6oGIAw&ved=0CHMQ6AEwCA#v=onepage&q=operation%20environment%20in%20crisis%20management%20in%20business&f=false

Impact of Breaks in Business Continuity:

Business Continuity Planing

When a turning point will certainly cause a significance separation to an organization, a business continuity plan can assistance to minimize the separation. Firstly, one must analyze the cretic functions and development that are fundamental to keep the organization running smoothly . Then each critic function and development should have its own crisis plan in the occurrence's that one of the development ceases. Determine these crisis plans by acting the required agility in a imitation will allow for all include to become more impressionable and aware the prospects of a crisis . Eventually, in the occurrence of an actual contingency , the team members will accomplish more quickly and efficiently.

http://books.google.co.uk/books?id=3eua8cb24LAC&pg=PA33&dq=operation+environment+in+crisis+management+in+business&hl=en&sa=X&ei=TMknUYXcJ9SX0QWI6oGIAw&ved=0CHMQ6AEwCA#v=onepage&q=operation%20environment%20in%20crisis%20management%20in%20business&f=false

RECOMMENDATION & CONCLUSION:

As per the risk assignment basis on two task. In the task one there have a explantation of Risk Assignment, Risk management is effect to the business function, evaluation the method of assessing risk in business, evaluation of approaches to managing risk in business.

The task 2 which is basis on all the main drivers of business risk, impact of the different types of risk, analysis of severity and likelihood, suggested risk management strategies, approaches to crisis management and impact of breaks in business community,

The recommendation of Risk Management assignment is

Identify the risks

Managing the risks

Implement the Safe drivers

Approach the Crisis Management

The impact of the organization of the basis of Financial Risk, Operation Risk, Managing Risk

The conclusion of this assignment is to safety measure is first palace on the basis of financial risk in the new business. There have already mentioned in assignment.

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