Risk Management

Risk

It is the possibility of something (usually something bad) that occurs due to something else (Besthealth.bmj.com, 2013). It is also a combination of events and outcome.

Risk Management

It is a process of identifying, analyzing the risks of various kinds (whatisriskmanagement.net, 2013). As stated by the (Ibc.ca, 2013)  “Risk management ensures that an organization identifies and understands the risks to which it is exposed”

Types of risks a projects face

There are two common types of risk a project faces, they are:

1.      Strategic Risk

This is due to:-

Ø  Abandoning the project

Ø  Cost is spend more than the required rate

Ø  Client satisfaction or confidence is lost

2.      Operational Risk

Ø  No one fixed plan

Ø  Cost is over spend

Ø  low morale/unacceptable working conditions

Risk Continuum

The Figure 1 below show a risk continuum diagram, risk continuum could be basically explained as the inversely proportionality between the information and the risk. When the amount of information that is available of a certain project is less there is a greater chance of risk in the certain project.

Figure 1. Risk Continuum, Source ( (Twi.co.uk, 2013))

Reference

Besthealth.bmj.com (2013) What is a risk?, [Online], Available: http://besthealth.bmj.com/x/static/514521/decision-support.html [15 Jan 2013].

Ibc.ca (2013) Controlling Costs with Risk Management, [Online], Available: http://www.ibc.ca/en/Business_insurance/risk_management/ [14 Jan 2013].

Twi.co.uk (2013) A risk based approach to maintenance optimisation of business critical railway structures/equipment, [Online], Available: http://www.twi.co.uk/technical-knowledge/published-papers/a-risk-based-approach-to-maintenance-optimisation-of-business-critical-railway-structures-equipment-november-2007/ [14 Jan 2013].

whatisriskmanagement.net (2013) The Importance of Risk Management to Business Success, [Online], Available: http://www.whatisriskmanagement.net/ [14 Jan 2013].