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Title: Enterprise Risk Management.
Description: Understanding what is risk and how to mitigate the risk.

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RISK MANAGEMENT
1
...
In every
business from the small corner store to the large manufacturer there are common challenges
with insurance claims and risk in general
...

A good sense of risk in its different forms can help investors to better figure out the
opportunities, trade-offs and costs associated with different investment approaches in the
financial world
...
Essentially risk management occurs when
an investor or fund manager analyses and attempts to quantify the potential for losses in an
investment and then takes the appropriate action given the fund’s investment targets and risk
tolerance
...
Risk Management Process
There are five necessary steps that are taken to manage risk
...
It begins with identifying risks, evaluates risks then the risk is
prioritized, a solution is implemented and finally the risk is controlled
...
There are many types of risks including legal, environmental,
marketing, regulatory risks and much more
...
If the organization has employed a risk management solution, all this
information is included directly in the system
...

ii)

Risk Analysis

Once your team identifies potential problems, it's time to go a little deeper how likely are
these risks to take place and if they take place what will the consequences be
...
to choose where to focus first

factors such as possible financial loss to the organization, time lost and severity of impact of
all play a part in precisely analysing each risk
...
Rank each risk by factoring in both its
possibility of happening and its potential impact on the project
...
It
will help you identify useful solutions for each
...

iv)

Implementation/Treatment

After prioritizing the risk develop your treatment plan
...

Starting with the highest priority risk first, task your team with either solving or at least
reducing the risk so that it's no longer a risk to the project
...

As time goes on and you develop a larger database of past projects, and their risk logs you
can expect potential risks for a more proactive rather than reactive approach for more
efficient treatment
...
Risks need to be continuously monitored to make sure that
risk mitigation plans are working or to keep you aware if a risk becomes a greater threat
...
Risk Management Approaches
After the company's exact risks are found and the risk management process has been applied,
there are several strategies companies can take to treating different risk
...


Risk reduction: - risk reduction is focused on actions that will reduce the probability
of a risk occurring or the impact of a risk
...

Risk sharing: - risk sharing is when an organization will transfer or share part of the
risk with another organization
...
No action is taken to decrease the risk, but a contingency
plan may still be put in place
...
Types of Risk Management
Risks can be classified into three types: business risk, non-business risk and financial risk
...
For example, companies offer high-cost risks
in marketing to introduce a new product, in order to gain higher sales
...
We can
term risks that arise out of political and economic imbalances as non-business risk
...
Financial
risk arises because of instability and losses in the financial market caused by
movements in stock prices, currencies, interest rates and more
...
Importance of Risk Management
To highlight the importance of risk here are some reasons all employees should care about
risk management:
Everyone should manage risk- sometimes the risk is necessary in order to achieve
success
...
By working with risk managers,
employees can make smart decisions to prevent risks and improve their chance of
rewards

Makes jobs safer - health and safety are integral parts of a risk manager's role
...
This benefits employees in physical work
environments e
...
, construction sites
...
It can also apply to individual projects
...

Reduces unexpected events - most people don't like surprises specifically when it has
an organizational impact
...
It's impossible to figure out every risk scenario and
address them all but a risk manager makes unpleasant surprises less likely and serious
...
Risk
management data and analytics can guide employees in making wise strategic
decisions that will help to fulfil organizational objectives

6
...




Risk models can provide organizations with the false belief that they can assess
and regulate every possible risk
...
Risk measures focus on the past instead of the
future making the downturn more likely
Title: Enterprise Risk Management.
Description: Understanding what is risk and how to mitigate the risk.