RISK MANAGEMENT

Risk Management

Risk Management

Introduction

Risk management encompasses the activities dealing with risks after they are identified and evaluated. Risk management, as well as risk assessment and risk communication, are part of the comprehensive term of risk governance, which is a systematic approach toward coping with risks under participation of all relevant actors (government, companies, the scientific community, nongovernmental organizations, and the general public). Risk management starts as soon as there is sufficient evidence for hazards identified and evaluated by risk assessment. (Robert, 2009, 104)

Risk management is also dealing with identified concerns that were analyzed by concern assessment based on risk perception studies, economy impact assessment, and the scientific characterization of social responses to risk source. At present, the production and use of engineered synthetic nanoparticles show high evidence of risks in this field. There are particular concerns about the use of nanoparticles in feed and cosmetics. However, different nanotechnologies and specific applications require different risk management strategies. (Fisher, 2010, 40)

Risk Management Steps

The first step of risk management is the identification and generation of risk management options. For example, these are measures to control or to reduce the release of nondeterministic polynomially (NP) problems, foster technological developments (filter technologies, etc.), implement economic incentives (taxation, duties, certification schemes), develop compensation schemes, generate knowledge, collect data (epidemiological studies, studies on work safety), and develop guidelines and best practice manuals. The dissemination of information about risks or the implementation of educational programs is also options for risk management. (Hutton, 2009, 33)

The second step is the assessment and evaluation of the risk management options. The criteria of this assessment are effectiveness, efficiency, and minimization of external side effects, sustainability, fairness, political and legal implementability, and ethical and public acceptability. (Fisher, 2010, 40)

The third step is the selection and implementation of risk management options. Due to the fact that it is not known how society and the relevant actors will react toward the risk management measures, the fourth step of risk management is monitoring their performance by observation of the effects of the options once they are implemented.

Risk management should not be visualized as a linear progression, but as a circular process, forming an interactive process with reassessment phases. Unexpected side effects of the measures could become evident and overrule the intended aims. New technologies (measurement techniques, filter techniques) may offer new options. Societal, economic, or political changes could demand a new orientation of the risk management process. Therefore, the differentiation between risk assessment and risk management is only analytical. In practice, both activities are interconnected.

Risk management is the process of making choices about risks. Before describing risk management, it is important to note that risk assessment, while intended to be an entirely scientific endeavor, does contain embedded management decisions. As noted above, in the absence of credible information, agencies typically require conservative protective assumptions. Risk managers also take other nonhazard factors into account—most notably, economics, ethics, public reaction, and politics. (Fisher, 2010, 40)

Does risk management add to the success of a project

Risk management plays an important ...