Risk Management

In a Nutshell

Activity 1. Based on the discussions of the types, benefits, and components of risk
management, please feel free to write your arguments or lessons learned below. I have
indicated my arguments or lessons learned.

1. There are different types or risks. Organizations need to address these risks not just
to avoid financial losses but also to secure the organization’s assets. In doing this,
organizations need to have a risk management structure that would be used as a
bedrock in risk assessment and responses.

Your Turn

2. Risk refers to the uncertainty of outcome within a range of exposures arising from a
combination of the impact and probability of potential events. Further, it can be
defined as the chance of loss or the perils to the subject matter and something or
someone that creates or suggests hazard. Simply stated, risk is the main cause of
uncertainty in an organization.

3. The ability of organization to manage risk will help them to act more confidently on
future business decisions and endeavors. Their knowledge of the risks they are
facing and about to face will give them various options on how to deal with potential
problems. Thus, this is when risk management takes in. Risk management is a
dynamic process for taking all reasonable steps to find out and deal with risks that
impact objectives. Such exists to let organizations forecast and evaluate financial
risks together with identifying procedures to avoid or minimize their impact.

4. Risk management is significant in every organization because without it, the latter
cannot possibly define its objectives for the future. Organizations will probably lose
direction once risks take over if they will define objectives without taking risks into
consideration. Moreover, poor risk management will result to certain problems such
as having difficulty in getting team members to follow a process, benefits unrealized,
overspent projects and unsatisfied clients.

5. Overall, organizations should maintain risk management within their borders. Risks
are inevitable and every organizations face it. If these risks remain not taken cared
of then it will certainly hinder success. The process brings more benefits to the
organization as it makes job safer, projects success, reduces unexpected events
and even create financial benefits. To achieve these, working with risk managers is
a plus as the latter make smart risk decisions that will later on help the organization
in minimizing the potential negative consequences of risks.