RISK MANAGEMENT

Risk Management

Risk Management

Introduction

In organisations, planning is very important to have a knowhow of the business and the environment in which it is operating. UK obtains the understanding of the business and the environment in which it is operating. It also finds out the material misstatement risk so it is a good guideline relating to these issues. The managers need to have a good understanding of the business together with its environment, so that they can better evaluate risk, choose the best managerial strategy and at the same time introduce effective risk management (RM) procedure (Andersen, et.al. 2010). Risk management is about taking right decisions in order to facilitate the organisation from the major threats that can affect adversely, this can be achieved by considering transferring risk, controlling risk, and retaining the risk that has been identified. Insurance is not the solution or an aspect to avoid the risk management process because the major risks that are faced by the organisations are insurable. Thus, risk transferring, controlling and retaining is the part of risk management process.

The primary goal of risk management is to establish a fine balance between the working environment and performance of an organisation. Performance implies to the high or low level of potential that an organisation has. Organisation needs to focus on maintaining the safe working environment in order to accomplish a balance. Compliance with local and state government or codes of federal regulations have been more often discussed and considered, but they are quite costly to implement them in all running organisations (Leitch, 2008). Compliance with the standards can lead an organisation to save millions of dollars. This ensures the availability of adequate resources for an effective safety program.

Organisations can perform well if they consider the factors that enhance the working environment, safety, and value their human resource. Systematic procedures and well decision making can reduce the mishaps, and decision making is one of the highly acceptable and successful methods of reducing the risk within the organisations. Effective assessment results in effective decision making and decisions. For example, the Smithsonian's cost exceeds $3 million for “Office of Workers Compensation Program” and now department of defence and NASA are using the potential tools to reduce the injuries and measure the intended risk to the Smithsonian's visitors and employees.

The uncontrollable hazard that create a risk of injury, are the assets or environmental damages that illustrate the non-compliance with the SI safety policy or agreement standardisation. The hazard is the situation that apparently contains greater potential to cause the damages, illness, and death of personnel, damage of collections, damages of equipment and limitation of operations.

Risk can be defined as the probability that a potential hazard will really cause the damages or injuries. Majority of the hazards are generally intrinsic to the organisations and the processes, equipment and piece of functions that direct towards the organisation's mission. Risk can be measured and then can be reduced through the deciding the preventive measures using safer material, processing the work ...