RISK MANAGEMENT

Risk Management

Risk Management

The increasing pace of change, customer demands and market globalization all put risk management high on the agenda for forward thinking companies. Risks cause cost overrun and schedule delay in many projects. The effectiveness of risk management becomes an important issue in project management. To make risk management more efficient and effective, all parties must understand risk responsibilities, risk event conditions, risk preference, and risk management capabilities. No organisation or person can survive without risk. A risk is a decision we make either consciously or subconsciously to achieve our goals. Organizations has developed swiftly over the last decade and grown with advances in technology and the constantly changing social network of our world.

(Rescher 1983) explains that 'Risk is the chancing of a negative outcome. To measure risk we must accordingly measure both of its defining components, the chance and the negativity'. For an organization the chance of this particular risk occurring was high as was the negative impact on the organisation, the employee and the customer's family.

In an organization most decisions and hence the perception of risk are measured by upper management. To support them with these decisions they employ contractors to analyse risks and advise them on a course of action. an organization transfers their risk by engaging insurance. Some may say that self insurance guarantees the company and its employees will be more diligent with risk. In my opinion removing the responsibility for the risk from an organization and placing it with an insurance company is the best method. However with the responsibility taken away management become complacent and do not monitor risk as efficiently as they should. To a large degree it is the responsibility of management to ensure that employees also take action to avoid risk. As Bradbery, P (p.19) states “management have ...