Risk Management PDF

UNIT I. WITHIN THE FRAMEWORK OF RISK IDENTIFICATION, ANALYSIS AND EVALUATION.  RISK ASSESSMENT Risk Risk Risk Identification Analysis Evaluation...

UNIT I. WITHIN THE FRAMEWORK OF RISK IDENTIFICATION, ANALYSIS AND EVALUATION.  RISK ASSESSMENT Risk Risk Risk Identification Analysis Evaluation Comprehend the nature of Find the risk. risk and its: Support fact- Recognize the - Characteristics based and risk. - Sources science-based Describe the - Consequences decision. risk. - Likelihood - Scenarios RISK MANAGEMENT Figure 1.1. Framework of the Book for Risk Management It is the possibility of something bad happening. According to PNS (Philippine National Standard) Risk is usually expressed in terms of sources, events, consequences, and likelihood, is the effect of uncertainty on objectives. It is the process of planning and organizing the resources and activities of a business to achieve specific goals in the most effective and efficient manner possible. Are coordinated activities to direct and control an organization with regard to risk.  A. Risk Management Principles Creation and protection of value across an organization for performance improvement, innovation promotion, and global achievement are the very purpose of risk management with its principles stated in Figure 1.2. It is then the proactive management tool in preventing occurrence of possible risk and hazards in the company value chain. The principles of effective risk management as stipulated in Philippine National Standards management 31000:2018 are as follow: The following principles are stipulated in Philippine National Standards. ▪ Integrated- integral part of all the organizational activities ▪ Structured and Comprehensive - contributes to consistent and comparable results. ▪ Customized - proportionate to the external and internal context related to its objectives. ▪ Inclusive - appropriate and timely involvement of stakeholders enables their knowledge, views and perceptions to be considered. ▪ Dynamic - be able to responds to different changes in appropriate and timely manner ▪ Best Available Information - always based on historical, relevant, and current information ▪ Human and Cultural Factors - human behavior and culture significantly influence all aspects ▪ Continual improvement - continually improved through learning and experience.  B. Risk Assessment and Risk Identification Risk Assessment is the overall process of RI, RA and RE. It should be conducted systematically, iteratively, and collaboratively, drawing on the knowledge and views of the stakeholders. Risk assessment starts primarily with risk identification. The very purpose of risk identification is to: ✓ Find ✓ Recognize ✓ Describe In risk identification, the following factors and the relationship between these factors should be considered: ▪ Tangible and intangible sources of risk ▪ Time-related factors ▪ Causes and events ▪ Biases ▪ Assumptions ▪ Threats and opportunities ▪ Beliefs of those involves ▪ Vulnerabilities and capabilities ▪ Changes in the internal and external content ▪ Indicators of emerging risks ▪ The nature and value of assets and resources ▪ Consequences and their impact on objectives ▪ Limitations of knowledge and reliability of information  C. Types of Risks As the name suggests, These are the risk that it involves government- can prevent and deter mandated licenses and Compliance the achievement of business permits and Hazard Risk company’s goals, requirements. Risk missions, objective. These are risks that are These are risks that can usually deliberately cause uncertainty or Opportunity sought or embraced by doubt about the ability Control Risk the organization to achieve company’s goals, missions and Risk specifically for the future long-term success of any objectives. organization.  Categories of Operational Disruptions Hopkin (2018) also Category Examples of Disruption provided operational- disruption examples Lack of people skills and limited caused by 4Ps. resources People Improper behavior by a manager [Table 1.1] Unexpected absence of key associates Sickness, illness, or injury to associates Not enough prohibition Premises Damage or contamination to premises Damage of physical assets Theft of physical assets Processes Failure of IT hardware or software Interference due to computer virus or hacker Mismanagement of information Communication or transport failures Products Poor Product or service quality Supplier failure Delivery of defective goods or its pasts Logistics failure