Paper Topic:

Manage a Risk Management System

Manage a Risk Management System 2007

Introduction

In the fast-ever growing business , corporations face serious challenge as how to cope with the risk management in to prevent company from performing mistakes that would result in the shut down of operation

The condition suggests that performing business activities means coping personally with the conditions of the markets in which the company operates . Furthermore , as an organization , companies are also faced by the challenge of managing internal problems and issues . In an environment where changes happen faster that they use to be

, companies are forced to generate new ways of coping with the business environment (Hamel , 1999

Managing uncertainty is name of the game in today 's economy . All organization is involved within risk management activities whether they deliberately plan it or not . Facing uncertainty is the only way to product profit and growth . On the contrary , stakeholders of companies demands increasing amount of certainty from their investments . At the least , they demand risk management programs that will reduce investment risks to a minimum

Concerning risk management , this will review the current practice of risk management at Worley Parsons Pty Ltd , a company that focuses on providing energy services and complex process industries . The issues include recommendation for improvements to managing information resource allocation , risk audits

Risk Management

By definition , risk management refers to the process of measuring risk assessing risk and managing risk with the use of corporate strategy There are various strategies that constitute risk management , like transferring risk to other parties , reducing the negative effects of the risk , accepting the result of some or all the risks or simply avoid risks . There are two types of risks that become the attention of risk management activities : physical risk management (natural disasters fires , accidents , etc ) and financial risk management

At any type of risk , corporation needs to perform risk management that composes of following factors

Risk assessment

The first steps of risks management is risk assessment . Corporations usually start their risk management sequences by identifying risks assessing the potential severity of loss and assessing the probability of occurrences . The process of risk assessment could include statistical operations and the use of risks assessment formula

Risk avoidance

Risk avoidance is the decision to eliminate risk by not performing activities that carry the risks . Logically , risk avoidance could be the answer of all risks problems , but avoiding risks also means that the company is missing the potential benefits that might arise from accepting risks

Risk reduction

Risk reduction is the effort performed to reduce the severity of loss caused by the risks . This means undertaking the activity that contains the risks , but placing a set of precautions and preparations to face existing risk of problems . Modern risk reduction activities apply advanced computer software to support the effort

Risk retention

Risk retention is the activity of accepting risks when they occur There are various activities and corporate projects that must be performed despite of the abundant risks . Analysts decided that the benefits...

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