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Risk. - Coggle Diagram
Risk.
Risk management process
Is the identification and analysis of risks to which the organisation is exposed to.
Measurement of the likelihood of risks occuring,
Assessment of potentioal impacts on a business,
Deciding what action can be taken to eliminate the risk.
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Contingency planning:
Expecting the unexpected - control damage; preparing for predictable and quantifiable risks.
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Risk:
Is the possiblity of losses or damage to a business. A threat that may prevent or hinder the ability to achieve business objectives. Chance that a hoped for outcome will not occur.
Eg;
Negative response to new launch,
Pandemics.
Businesses can deal with risks in multiple ways:
Ignore it - wait and see what happens,
Reduce the probability of it happening - eg; installing sprinklers,
Share/deflect the risk - insurnace,
Make contingency plans - prepare and plan response,
Treat as an opportunity - eg; if effects competitiors use pricing strategies to grow revenues.
Quantifiable risk:
are reasonable predictablility and the likelihood of these risks occuring along with the impact of these risks on the business. Can be measured and are based on previous data.
Eg;
Financial - major customer becomes bankrupt,
Operational - breakdown of equipment,
Startegic - new competition,
Compliance - responding to new legislation,
Insurance - taking out insurance.
Preventative actions:
Training staff appropriately,
Regular back up/upgrade of systems,
Robust quality control systems in place,
Installing sprinkler systems and flood barriers.