Risk Identification, Assessment, and Handling Report

Exclusively available on Available only on IvyPanda® Made by Human No AI

Introduction

Risk is imminent in any industry that a business organization may be operating. As a result, it is incumbent upon the management to put in place measures that will ensure adequate prevention of any possible risk. Risk management process has been defined as a process through which an organization plans and executes organizational activities with the aim of reducing or even avoiding effects of risks.

It is important, however, to note that it is capital and income of organizations that are shielded against risk. It should also be noted that for a typical risk management program to be effective, various vital components must be taken into consideration.

Risk identification

To begin with, it is important to note that one will be fight a futile war if the enemy is not known. Consequently, it is paramount that any risk management program begins by identifying which risks are most likely to occur and therefore affect the business. It is only after identification of the risk that it can be feasible to investigate causes of the risk.

The risk identification step should also include the identification of events or activities of the organization that are most likely to trigger risks. The manner in which management may chose to carry out the risk identification process usually depends on the business environment, culture as well as the regulations in place.

Risk Assessment

Risk identification enumerates the risks that can occur, but does not say anything about the most prevalent or the most severe risk. However, for proper risk management it is important for the firm to know which risks can easily occur and which ones have the highest effects on the company assets or income. Consequently, risk assessment to categorize the possible risks according to their probability of occurrence and severity of impact is crucial.

It is imperative to note that risk assessment also involves determination of the assets that are vulnerable incase a given risk occurs. However, risk assessment has one draw back which is its inability to precisely determine the pace at which various risks can occur. This is due to the unavailability of reliable statistics hence a higher degree of inaccuracy. Nevertheless, this component of risk management program is vital in assisting management to prioritize its actions.

Risk Handling

Risk handling involves the process by which strategies to tackle each risk are formulated and implemented. In addition, it includes the prioritization of the strategies in order to cater for the most crucial assets. The ultimate goal of any risk management program is to avoid any risk to the organization. However, it is practically impossible that risks can be completely avoided by any organization no matter how perfect the risk management program may be.

As a result, the programs aim to avoid the risk if possible or transfer the risk whenever necessary to institutions or people well placed to take the risk. Nevertheless, there comes a time when the firm cannot avoid some risks. In such a scenario, the management may choose to mitigate the effects of the risk or accept the risk either partially or in full. Whichever the strategy that a firm may choose, its priority should be to safeguard the organization’s capital, assets and income.

Conclusion

Risk management is not an easy or direct process as many may have wished it to be. Besides being influenced by uncontrollable conditions, it is clouded by a lot of uncertainties which leads to inaccuracies in decision making. Nonetheless, it is a crucial part of organization procedures and has to be undertaken. Therefore, it is upon the management of any organization to ensure that efforts are made to get the most appropriate risk management program implemented.

More related papers Related Essay Examples
Cite This paper
You're welcome to use this sample in your assignment. Be sure to cite it correctly

Reference

IvyPanda. (2019, June 10). Risk Identification, Assessment, and Handling. https://ivypanda.com/essays/risk-management-process/

Work Cited

"Risk Identification, Assessment, and Handling." IvyPanda, 10 June 2019, ivypanda.com/essays/risk-management-process/.

References

IvyPanda. (2019) 'Risk Identification, Assessment, and Handling'. 10 June.

References

IvyPanda. 2019. "Risk Identification, Assessment, and Handling." June 10, 2019. https://ivypanda.com/essays/risk-management-process/.

1. IvyPanda. "Risk Identification, Assessment, and Handling." June 10, 2019. https://ivypanda.com/essays/risk-management-process/.


Bibliography


IvyPanda. "Risk Identification, Assessment, and Handling." June 10, 2019. https://ivypanda.com/essays/risk-management-process/.

If, for any reason, you believe that this content should not be published on our website, please request its removal.
Updated:
This academic paper example has been carefully picked, checked and refined by our editorial team.
No AI was involved: only quilified experts contributed.
You are free to use it for the following purposes:
  • To find inspiration for your paper and overcome writer’s block
  • As a source of information (ensure proper referencing)
  • As a template for you assignment
Privacy Settings

IvyPanda uses cookies and similar technologies to enhance your experience, enabling functionalities such as:

  • Basic site functions
  • Ensuring secure, safe transactions
  • Secure account login
  • Remembering account, browser, and regional preferences
  • Remembering privacy and security settings
  • Analyzing site traffic and usage
  • Personalized search, content, and recommendations
  • Displaying relevant, targeted ads on and off IvyPanda

Please refer to IvyPanda's Cookies Policy and Privacy Policy for detailed information.

Required Cookies & Technologies
Always active

Certain technologies we use are essential for critical functions such as security and site integrity, account authentication, security and privacy preferences, internal site usage and maintenance data, and ensuring the site operates correctly for browsing and transactions.

Site Customization

Cookies and similar technologies are used to enhance your experience by:

  • Remembering general and regional preferences
  • Personalizing content, search, recommendations, and offers

Some functions, such as personalized recommendations, account preferences, or localization, may not work correctly without these technologies. For more details, please refer to IvyPanda's Cookies Policy.

Personalized Advertising

To enable personalized advertising (such as interest-based ads), we may share your data with our marketing and advertising partners using cookies and other technologies. These partners may have their own information collected about you. Turning off the personalized advertising setting won't stop you from seeing IvyPanda ads, but it may make the ads you see less relevant or more repetitive.

Personalized advertising may be considered a "sale" or "sharing" of the information under California and other state privacy laws, and you may have the right to opt out. Turning off personalized advertising allows you to exercise your right to opt out. Learn more in IvyPanda's Cookies Policy and Privacy Policy.

1 / 1