What is Risk Management? Human Activity which integrates:1. Recognition of Risks2. Risk Assessment3. Developing strategies to manage it4. Mitigation of risk using managerial resources.
Strategies Transfering the risk to another party. Avoiding the risk. Reducing the negative effect of the risk. Accepting some or all of the consequences of a particular risk.
Traditional Risk Managements Stemming from physical or legal causes such as:1. Natural disasters2. Fires3. Accidents4. Death5. Lawsuits
Ideal Risk Management A priorization process. Risks with the greatest loss and the greatest profitability are handled first. Risks with lower probability of occurence and lower loss are handled in descending order.
Objective of risk Management Reduce different risks related to a preselected domain to the level accepted by society. It may refer to numerous types of threaths caused by the environment, technology, humans, organizations and politics.
Intangible and Relationship Risks Risk that has a 100% probability of occuring but is ignored by the organization due to a lack of identification ability. Appears when ineffective collaboration occurs.
Steps in the Risk ManagementProcess1. Identification of risk in a selected domain of interest.2. Planning the remainder of the process.3. Mapping out.4. Defining a framework for the activity and an agenda for identification5. Developing an analysis of risk involved in the process6. Mitigation of risks using different resources.