Overview of risk management · Risk management in a new one. In the risk management process, risks are identified in the first phase, which is the identification of risk. Risk identification refers to the risk management process in which specific risk factors are identified. Risks are uncertain future events that could influence the achievement of a company's strategic, operational, financial and compliance objectives.
Risk management is not a linear process, but rather consists of balancing a series of intertwined elements that interact with each other and that must be in balance with each other. Risk control, on the other hand, uses information in the identification and evaluation of risks to mitigate them. Project management must control and contain risks for a project to have a chance of succeeding. From the above risk analysis, it is evident that the order in which risk factors are classified is the quality of the equipment, followed by the infrastructure of the facilities, then the organizational systems and, finally, depreciation.
One method of obtaining financial protection against the impact of risks is through risk financing, which includes insurance. The risk management process should be developed within the framework of the project life cycle, focusing on the specific challenges that arise at the specific stage of the project life cycle. In essence, risk management involves identifying the risks involved in a project, analyzing the risks, planning the implementation of a project and managing the risks involved. In general, the operational risk control plan will be established in such a way as to adequately cover all the risk factors that present operational risks and identify all possible control strategies (Matthew 1).
The list of possible risks may be shorter or longer, but the goal is to succinctly identify risks and allocate resources appropriately. The rating helps you compare each risk with the others and allows you to make quick decisions about the risks. As defined in the ISO 31000 standard, risk management is the process of identifying, evaluating and prioritizing risks. The identification, evaluation and analysis of risks help the project team to develop the risk mitigation plan.
The risk analysis process helps the effective and efficient operation of the organization by identifying risks that require management attention. The researchers (Royse, Thyer, Padgett, &, Logan, 200) insist that avoiding risks can lead the project team to refuse to undertake daring and potentially very beneficial projects due to certain risks associated with their implementation and to focus on mediocre projects that are safer, but are also less profitable compared to the most daring ones. In general, the level of technical risk is generally low and, therefore, the best control action is the transfer of risk in addition to the mitigation of the risk.
