Effective Risk Management planning assignment: Identifying, Evaluating, and Controlling Business Risks
Question
Task: How can businesses effectively manage and mitigate risks to their assets?
Answer
Introduction
Risks surround every decision an individual or business makes but it is possible to reduce the level and effects a risk has on an asset or business through proper management. This makes Risk Management planning assignment a basic and important requirement that every individual, business or organization must learn to implement and manage so as to avoid encountering major losses caused by the risk (Christoffersen 2012). To effectively manage risk and reduce losses and exposure to the assets, the business must be able to identify elements associated with the risks which would help with better management. There are five basic elements that require proper analyses so as to manage risk effectively and reduce the threat posed by the risks as discussed below.
Identification of Assets That Need Risk Protection
The first step linked to developing an effective Risk Management planning assignment plan is to first identify the assets which are under threat of risk. Risk Management planning assignment and evolution cannot be performed when the asset under risk has not been identified. Aspects such as its value, venerability, and security can be audited and information collected.
It’s also important to collect information from different sources and stakeholders related to the risk to the assets (Zervos et al. 2013). Customers, employee, and suppliers are all important sources of information which can be consulted to assist the business secure important information and date which can be used to identify all impending risk to an asset. This makes it important for them to be involved in the risk identification process which would allow the identification of all possible assets at risk which can then be listed as per their severity level.
Identify the Risks Threatening the Assets
The next step is linked to identifying all possible risks which threaten an asset and this should not be limited to one since in many situations the asset will face threats from different sources (Walls, Revie & Bedford 2016). Once again the identification of risks threatening an asset is best identified by involving all stakeholders who will be able to provide valuable input towards asset risk identification thus allowing for a clearer Risk Management planning assignment plan to be developed. It’s important to identify the risk threats and also answer the following points at this stage.
What Could Happen To the Assets Identified
Once the risks threatening an asset have been identified each of the risks requires being evaluated carefully to determine how they would affect and what would happen to the asset once affected. This would allow the business develop a projected risk evaluation plan by anticipating what would happen to the asset once the risk affects it. Each risk will have a different effect on the asset and to effectively develop an asset protection plan it’s important to understand how each of the identified risks affects the assets (Walter & Haslett 2010).
Once again this information will have to be identified and listed on the risk assessment and evaluation list after which the information can be evaluated on the threat level and affect the risk has one the asset. Certain risks may pose low levels of threat to the asset thus but understanding their effect on the asset is very important so as to develop an effect Risk Management planning assignment plan which addresses all risk to assets.
Ranking Of the Threats by both Impact and Probability
With the type and nature of risk identified and how they affect the asset understood. The next step involves evaluating the risk according to their level of danger of the asset. As mentioned earlier some risk poses the low threat to the assets functioning but in other situations, the risk threatens to destroy the asset altogether. To develop an effective Risk Management planning assignment plan the asset threats must be ranked according to their impact and probability level and effect on the asset (Heng 2009).
This allows for the risk elements to be organized according to their danger level to the business which allows for the business to tackle each risk appropriately starting from the risk which poses the highest risk to a business to those which pose a lower risk level. Risk level ranking is critical as it helps with effectively developing a Risk Management planning assignment plan which is likely to prevent the business from experiencing major unexpected losses due to lack of preparedness.
Understating the risk, type risk and how they the risk level to an asset are critical element linked to business Risk Management planning assignment thus stage require adequate time and dedication to developing a clear understanding of the risk. Risk Management planning assignment success is mainly determined by one's understanding of the risk threatening an asset which allows the business owner and management develop effective strategies to counter and avert the risk.
Identifications and Application of Controls to Reduce Risks and Threats
Once identified it’s time to develop Risk Management planning assignment controls which target eliminating or reducing the level of risk posed on an asset. It’s not possible to eliminate a risk altogether but the risks level or rate can be reduced considerably. This can be achieved by overlapping the identified risk with countermeasures or simply avoiding the risk through design or policy development and strict implementation.
The use of safety equipment is one such measure which can be utilized to control risks or threats of accidents occurring at a business (UcedaVelez & Morana 2015). But to achieve this management must develop an effective policy and provide the safety equipment to its employees. It’s also important that follow-ups are made with regard to implementation and use where there must not be any relaxation and flexibility with regard to the use of safety equipment and clothing. The same applied for each risk countermeasure or control which must be properly implemented to reduce the threat.
Risk Control Measures and Controls Testing
Once the controls for each of the threats have been identified the business would then need to turn its attentions to testing the effectiveness of the controls. This will require for risk and threat simulations to be simulated and even triggered so as to allow for the control measures to be tested and their effectiveness measured and recorded (Hopkin 2017). It’s very important that risk control measures are not limited to theory or paper calculations and the control must be tested practically to ensure they are effective.
This is especially important while dealing with certain risks such as fire since many businesses will have a hydrant system installed to the building but fail to evaluate the flammable materials and how water may affect the fire. In certain situations, you find that water is not effective towards dousing a petroleum product fire flames and with many businesses and homes having lots of plastic projects the risk is considerably high with no effective extinguishing measure.
When ignited and on fire, the fire actually intensifies when water is introduced as it creates more flammable fumes which escalate the fire. This is just an example or the relations between evolution and identification of hazards and risk threat which must all be correlated and measures to help reduce the threat of risk. Failing to test the control system could result in having ineffective equipment or control measures which do not and this will result in a major failure when tested.
In addition to testing the control measures, one must also be prepared to evaluate and counter check the control measures at regular intervals to ensure all the equipment is functioning (Morana & UcedaVelez 2015). Simply ignoring safety and countermeasure equipment for long periods of time can result in experiencing serious and unexpected failure when required resulting in major losses. This makes Risk Management planning assignment counter and controls measure testing also very important for the proper managements any threat.
Risk Management planning assignment Program Monitoring and Reporting
Once again it’s important to take the evaluation and report the risk as part of the risk measurement program after regular intervals. This helps with identification of important development which can be collected to help the business improve the control measures and prevent the risk from affecting the business in a negative manner (Marchetti 2011). In some situations, the risks cannot be prevented but simply understanding the risk will help reduce the risk exposure to an asset which also helps limit the loss a business may experience when the business encounters the risks.
Conclusion
Risk Management planning assignment is an important part of every business long term success and it helps the business develop more stable growth and development plans. This is because the business Risk Management planning assignment plans create awareness related to the risks facing a business which allows the business be better prepared to handle the risk when it is encountered.
References
Christoffersen, F 2012, Elements of Financial Risk Management planning assignment, Academic Pres, Oxford.
Heng, G 2009, Analyzing & Reviewing the Risks for Business Continuity Planning, GMH Continuity Architects, Singerpore.
Hopkin, P 2017, Fundamentals of Risk Management planning assignment: Understanding, evaluating and implementing effective Risk Management planning assignment, 4th edn, Kogan Page Publishers, new York.
Marchetti, A 2011, Enterprise Risk Management planning assignment Best Practices: From Assessment to Ongoing Compliance, John Wiley & Sons.
Morana, M & UcedaVelez, T 2015, Risk Centric Threat Modeling: Process for Attack Simulation and Threat Analysis, John Wiley & Sons, Hoboken.
UcedaVelez, T & Morana, M 2015, Risk Centric Threat Modeling: Process for Attack Simulation and Threat Analysis, John Wiley & Sons, New Jersey.
Walls, L, Revie, M & Bedford, T 2016, Risk, Reliability and Safety: Innovating Theory and Practice, CRC Press, London.
Walter, V & Haslett, B 2010, Risk Management planning assignment: Foundations For a Changing Financial World, John Wiley & Sons, Hoboken.
Zervos, C, Knox, K, Abramson, L & Coppock, R 2013, Risk Analysis: Prospects and Opportunities, Springer Science & Business Media, New York.
