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risk managemnet notes

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22 views4 pages

THC SUB - CATH - docxAA

risk managemnet notes

Uploaded by

Cathleenjoy billacura Arucallib123
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© © All Rights Reserved
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UNIT 1 – RISK MANAGEMENT

# The principles of risk management, risk analysis, and risk evaluation.

RISK- is the effect of a community of an object.

EFFECT - Outcomes

Objectives- ex. To increase the sales of different aspects of businesses

A. Risk Management Principles

RISK MANAGEMENT- The creation and protection of value across an organization for performance improvement,
innovation promotion, and goal achievement are the very purpose of risk management

a. Integrated -Risk Management is an integral part of all organizational activities

b. Structured and Comprehensive- A structured and comprehensive approach to risk management contributes to
consistent and comparable results.

c. Customized- The risk management framework and process are customized and proportionate to the
organization’s external and internal context related to its objectives.

d. Inclusive- Appropriate and timely involvement of stakeholder enables their knowledge, views, and perceptions to
be considered, resulting in improved awareness and informed risk management.

e. Dynamic- Risk can emerge, change, or disappear, as an organization’s external and internal context changes. Risk
management anticipates, detects, acknowledges, and responds to those changes and events in an appropriate and
timely manner.

f. Best Available Information- The inputs to risk management are based on historical and current information and
future expectations. Risk management explicitly considers any limitations and uncertainties associated with such
information and expectations. Information should be timely, clear, and available, to relevant stakeholders,

g. Human and Cultural Factors- Human behavior and culture significantly influence all aspects of risk management at
each level and stage.

h. Continual Improvement - Risk management continually improves through learning and experience.

B. Risk Assessment and Risk Identification

Risk assessment, which is the


overall process of risk
identification, risk analysis, and
risk
evaluation , should be
conducted systematically,
iteratively, and collaboratively,
drawing on
the knowledge and views of
stakeholders . It should use
the best available information
,
supplemented by further
inquiry as necessary.
Risk assessment, which is the overall process of risk identification, risk analysis, and risk evaluation, should
be conducted systematically, iteratively, and collaboratively, drawing on the knowledge and views of stakeholders. It
should use the best available information, supplemented by further inquiry as necessary.

Risk management starts primarily with risk identification. The very purpose of risk identification is to find,
recognize, and describe the risks that might help or prevent an organization from achieving its objectives. Relevant,
appropriate, and up-to-date information is important in identifying risks.

The organization can use a range of techniques for identifying uncertainties that may affect one or more
objectives. In risk identification, the following factors and the relationship between these factors should be
considered.

# FACTORS TO CONSIDER IN RISK MANAGEMENT

-tangible and intangible sources of risks


-causes and events
-threats and opportunities
-vulnerabilities and capabilities
-changes in external and internal context
-indicators of emerging risks
-the nature and value of assets and resources
-consequences and their impact on objectives
-limitation of knowledge and reliability of information
-time-related factors
-Biases
-Assumptions
-beliefs of those involved

C. Types of Risks

1. Compliance (Mandatory) Risks- As the name suggests, compliance risks involve government-mandated
licenses and business permits and requirements. It may constitute business clearance from a barangay
level, municipal level, or city level, internal revenue offices, security exchange, license to operate,
compliance with fire and building codes, and insurance among others.
2. Hazard (or pure) Risks- These are the risks that can prevent and deter the achievement of a company’s
goals, missions, and objectives. Typical examples include insurable-type risks including fire, typhoon, flood,
earthquake, and injury among others,
People-
4ps- Premises-
Processes-
Products-
3. Controlling Risks- These are risks that can cause uncertainty or doubt about the ability to achieve the
company’s goals, missions, and objectives. One classical example of control risks is internal financial control
protocols. If control protocols are removed, there might be uncertainty Hazard Risks Compliance Risks
Control Risks Opportunity
4. Risks Opportunity Risks- These are risks that are usually deliberately sought or embraced by the
organization specifically for the future long-term success of any organization. These risks arise because the
organization is seeking to enhance the achievement of goals, missions, and objectives. Some organizations
are willing to invest in high-risk business strategies and anticipate of high return on investment.

RISK IDENTIFICATION- finding, recognizing, and describing the risks that might help or prevent an organization to
achieve its own objectives.

RISK ANALYSIS- Analytical process to provide information regarding undesirable events in which it estimates
probabilities and expected consequences for identified risk.

PURPOSE OF RISK ANALYSIS- To comprehend the nature of risk and its characteristics, where appropriate, the level
of risk.

-Involves a detailed consideration of uncertainties, risk sources, consequences, likelihood, events, scenarios,
controls, and effectiveness.

FACTORS TO CONSIDER IN RISK ANALYSIS

-Likelihood of events and consequences


- The nature and Magnitude of consequences
- Complexity and connectivity
-Time-Related Factors and Volatility
-Effectiveness of existing Controls

Threat Assessment- Consideration for full spectrum of threats for a given facility/location.
-It involves examining of supporting information to evaluate likelihood of occurrence for each threat.
Impact of Loss- The degree to which the facility or event is compromised by a successful attack from the given
threat.

IMPACT OF LOSS CATEGORY


-Devastating (strong impact)
-Severe (partial impact)
-Noticeable
-Minor (no effect)
Vulnerability – A combination of the attractiveness of a facility as a target and the level of Defense provided by the
existing countermeasures.

RISK EVALUATION-risk analysis with risk criteria to determine whether the risk and/or its magnitude is acceptable.

Risk evaluation matrix- a tool that considers value and risk to help you determine the level of complexity associated
with: a contract or group of contracts.

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