RISK MANAGEMENT PROCESSES

Risk Management Processes



Risk Management Processes

Introduction

Risk, defined as the possibilities that technological activities or natural events lead to consequences that affect human values. Opportunities are circumstances in which an uncertainty leads to a benefit or positive effect on the project. Despite recent considerations for upside risks, most risk analysis and management process still focus on managing hazards and threats, and the area of opportunities needs more work. While the concept, of risk might bring negative issues to most people's mind, it includes all kinds of risk like opportunities; the risk management process, considered as a Risk/Opportunity Management analysis, called ROM in current research. It is quite clear that an effective use of risk management processes and frameworks, strongly promoted by suitable choices of fundamental terms and concepts. The failure in employing the basic terms and concepts related to risk management processes creates problems for organizations and individuals. Therefore, all issues regarding risk management processes will be discussed in detail, in the topic.

Main Body

Risk Factors, considered those factors that can occur at every possible event or issue that may cause harm to the project. Risk Analysis, conducted which is an approach to identify these factors and the methodology used to quantify them. Risk Analysis, defined as the process of identifying risk factors and using a qualitative or quantitative method to calculate the severity of those factors in order to manage them. The risk in projects is a direct result of uncertainty from different aspects, either because of the nature of the project or judgmental uncertainty. Therefore, it is important to state the approach adopted in the characterization of risk, and, assumed of the associated uncertainty, when the risk factors, communicated to the concerned parties or the decision makers. Risk Severity is an index for demonstrating the level of risk to be dealt with in the project (Kevin, 2008, 27).

It is obvious that the risk management approach differs from the old approach to managing the risks. It recognizes that there are alternative techniques to insurance for handling these risks. Although insurance spreads the risk, it is frequently the most expensive of all the available alternatives and it should be used only as a last resort. The concept of risk management, broadened into a completely defined risk management model. The model helps contractors to better manage risk by improving their awareness and understanding of project risks that they face. In addition, the model also provides contractors with alternative risk management strategies for treatment of such identified risks. However, there is confusion about the term risk management that needs to be explained. The term itself tends to be misleading because management implies control of events. On the contrary, risk management must be seen as managing responses rather than responding to risk events after they happen. Given sufficient time, it is possible to identify actions and select one, or a combination of more than one, which is most consistent with the project and organization ...