Risk Identification, Assessment, Response, And Mitigation

The examples are-

Operational risks- Human error and quality risks

Strategic risks- Economic risks and risks from the other competitor

1. External Risks- political condition and technical risks
2. Risk management system is very crucial in case of any workplace in order to protect the workers of this workplace. There are many instances that allow the management to control the risks by only applying the risk management system in their workplace. The steps of the risk management are identification of the hazard, risk identification, risk assessment, risk control , documentation of the risks and monitoring and reviewing of all the process. The first step of the risk management is hazard identification that is the way of inspecting the work area and the tasks in order to detect any kind of hazards related to that work or workplace. In this process, the previous records of in any incidents can also be used. The next step is risk identification that is the identification of any risks that is related to the identified hazards and it is very crucial to check the likelihood of any injury and severity of injury related to that hazards. This process of assessing the likelihood of any risks is referred to as risk assessment. The 4^thstep of the risk management system is risk control that is the urgent action that is required to manage the identified risks and that may include isolation of the hazards till any permanent measures are not taken and cessation of that particular work process that are associated with the identified hazards. The next step is documentation of the identified hazards and related risks as it will help in ensuring the fact that control measures are taken in a proper way. The last step is to monitor and review the implemented process whether there is any impact of the changed process on the identified process (Pritchard and PMP 2014).
3. The two steps of risk management processes that must be controlled continually are risk assessment and hazard identification (Pritchard and PMP 2014).
4. The three sources of information that can depict the objectives of an organization are the official website of the organization, annual report of the organization and social media page of the organization.
5. A PESTL analysis is of the most important analysis tools for analyzing market. The PESTL stands for political, economic, social, technological and legal factors. By using a PESTL analysis an organization can detect the external forces that can affect the market their product and along with this, this also helps in to understand the process how the organization can impact in the market through their product. Political factors refers to the measures that are taken by the government of that country or area and those steps may directly related to that industry. This may include changes in labour law, tax policies, and governmental policies. Economic factors may are the causal factors behind the performance of any particular economy and such factors may changes in the interest rates, inflation rates, economic growth. These factors have a long term effects on the particular organization as economic factors have impact on the purchasing power of the company and also on the services of that certain organization. Social environment and emerging trends of the society can be counted as social factors. These help to identify the market needs and trends. The social factors include cultural trends, lifestyle changes, changing education level may have serious impact on the organization as all these factors will directly affect the organization. The ‘T’ in PESTL denotes the technological factor  that is advancement of technology and innovation day by day and it is affecting the market and industry as with the advancement of technology the competitors are also improving their products. As a result any organization may face difficulties in the market. The technological changes may include changes in automation process, research and developmental process of any products and in digital technology.  The last factor of PESTL analysis is the legal factor. It is very important for any organization to understand the legal framework and related legislation in that particular area in order to operate in a legal way. It is very crucial to be updated regarding any changes in the legislation that are related to the business of that organization as well.  The factors may include consumers’ law, health and safety related law, employment related law ( Thapa Chhetri 2018).
6. A stakeholder refers to a party who has interest in a company and the party either may affect the organization or may be affected by the business of the organization. The stakeholders can be classified into two types and that are external and internal stake holders. The example of an internal stake holders is investors as they can affect the organization directly. The external stakeholders are a person or organization who can be affected by the organization’s business as well. The identification of the external and internal stake holders is not so easy. Various researchers identified various ways. It is suggested that, the identification of internal and external stake holders can be done through brainstorming that is the persons from inside the organization can be asked to point out the stake holders. In addition, identification of the stakeholders can also be done simply by using generic lists of stake holders. However, the identification of stake holders by using the generic lists is not enough at all. Hence, the stake holder-commitment matrix can be used to identify the external and internal stake holders of the company and this method it is possible to categorize the stakeholders as well. In addition another method that is power/predictability matrix can also be used in classifying the external and internal stake holders (Cummings and Worley 2014).
7. The term risk criteria refers to the terms of references that are used to assess the significance of the risks in any organization. The criteria are used to specify the level of risks whether the risks are tolerable or not. The main purpose of this criteria is to set a parameter for assessing risks in an organization (Haimes 2015).
8. Communication is very crucial in case of management of risks as communication is one of the most important parts of the risk management system. A continual communication is critical to the risk management system as risk assessment and hazard identification are continuous process in the risk management system. In order to keep the process in a good flow. By using the continual communication, the organization can identify the various hazards and related risks in the organization. A continual communication can identify the internal risks, risks strategies of the organization, and responsibilities of the organization regarding any risks as well. The continual communication can help the organization to collect information from the workers of the company and their inputs are most important in case of risk management as they are only exposed to the actual conditions of risks. As  a result, it can be easily said that, the use of continual communication will be proved to be very fruitful for the organization as they will make required changes as per the requirements of the organization and those changes will be done as per the feedbacks of the organization’s staffs. Only a continual communication can only give the chance to rectify various errors to the company and that will reduce the chances of risks occurring in the organization (Hopkin 2018).
9. The tools for identifying risks are SWOT analysis technique, Risk register, Quantitative risk analysis, probability and impact matrix and brainstorming.
10. The components of risk analysis are hazard identification, hazard characterization, exposure assessment and risk characterization (Kendrick 2015).
11. A qualitative risk analysis refers to the technique in which the risk associated with thej hazards is quantified. This technique is used for the uncertain risks that may have various serious consequences. This technique includes the assessment of historical data, rating scale analysis, Delphi technique, SWOT analysis, interviewing and brainstorming as well. However, this qualitative analysis does not assess the risks in a mathematical perspective and as a result it is only associated with the probability and impact judgments as per the stakeholders input. Generally numeric rankings are used to assess the risks where 0 denotes the low and 1 denotes the high risk probability. Moreover, the qualitative technique is mostly used in various projects. One the other hand a quantitative risk analysis refers to the process in which risks are identified for future analysis and later qualitative risk analysis process is performed. These risks have high impact on the objectives of any projects. This techniques uses the process of probability distributors to characterize the probability of the risks and along with the impact of that risk is also assessed. By using this technique, the schedule, cost estimates can also be detected by using the mathematical and simulation tools in order to calculate the probability and impact of the risks. The combined effect of the risk outcomes in terms of time and money can also be assessed by busing this technique. However, this technique may not be applicable to many simple or slightly complex projects (McNeil,  Frey and Embrechts 2015).
12. A likelihood table has four stages and a consequences table has four type of consequences. Both the table are undetachable part of the risk assessment criteria in an organization. By using a likelihood table and consequences table together, occurrence and impact of a particular risks can be calculated in order to manage the risks level in a proper way (Modarres 2016).
13. The risk treatment refers to an action that is performed in order to manage any risk situation. There are five options for risk treatment such as avoidance that is not to take risks by avoiding a risky action, reduction of risks refers to the mitigation of risky actions. The third option is transferring of risks to a third party. The fourth option is acceptance that is to face any risk condition and the other option is sharing that is distribution of risks (McNeil, Frey and Embrechts 2015).
14. Cost benefit analysis refers to the systematic approach to identify the weakness and strengths of alternatives such as functional business requirements, transactions activities. It is used to determine best approach for achieving the benefits and simultaneously preserves the savings.
15. The factors that must be considered when cost benefit analysis is performed are inflation and interest rates as part of maintain the accuracy of the cost benefit analysis (Johansson and Kriström 2018).
16. The five components of risk management plan are as follows

Risk identification- This step consists of the determining the type of risks that may affect the organization and also the documentation of the risks.

Risk responsibilities- This step is shared among all the stakeholders of the organization.

Risk Assessment- In this step, the probability of risk occurrence and its impacts are assessed.

Risk Response- In this step, responses are documented for each of the identified risks

Risk Mitigation- In this step, identification of various activities and adverse events are recorded and then a contingency plan is developed (Pritchard and PMP 2014).

1. It is critical to review the risk management plan in regular intervals as without that incident and actions involving risk will not be identified in a company. New risk events can occur at any given time. If the risk management plan is reviewed that risk events will be registered and control measures can be taken after critical evaluation of the risk. The company should review their fixed plan on a consistent basis to identify the risk events that arrived for the firm and take instantaneous remedial measures to mitigate that. The action that is required to alleviate the risk will be far more precise. The management and the employees of the company develops superior risk awareness and the gap areas in identifying risks lessens due to better planning and execution of the plan (Aven 2016). During the review of the risk management plan the assessment criteria is also revised as a result remedial measures are more precise to tackle the risk event.
2. Monitoring, evaluation and review are the three mechanisms which can be applied to ensure continuous monitoring and upgradation of the risk management plan. Monitoring and evaluation increase the long term success of the plan while it aware all the stakeholders about their specific responsibility. Monitoring should consider short term and long term outputs. Evaluation of the plans gives an idea about the progress made while highlights the requirements of changes and revisions of the plan for a positive outcome. Subsequently a review of the risk management plan is done to apply the essential changes in the execution of the plan and integrate that into the system. Feedback from all the stakeholders should be considered during making any changes. These three mechanisms help the policymakers in decision making about risk management plan (Kolotzek et al. 2018).

19.

1. Risk management standards are necessary to implement risk management plans in the organisations and workplaces in a systematic way. The plan can be implemented more efficiently when they are implemented under a fixed framework and pathway. The regulations are set by International organisations and can be updated based on the industry requirements. IRM, Alarm and AIRMIC 2002 are some of the risk management standards commonly followed. The various standards are applicable to different organisations according to their requirements. Risk management is essential for controlling the health and safety of the employees in the workplace (Boyle 2015). Risk management standard provides a fixed framework for the management and the employees. It helps in better assessment and control of risk events in the workplace resulting in a better working environment as it covers all the bases. Maintaining a standard mechanism of framework in a workplace can do wonders to the employee morale and health.

References

Aven, T., 2016. Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), pp.1-13.

Boyle, T., 2015. Health and safety: risk management. Routledge.

Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage learning.

Haimes, Y.Y., 2015. Risk modeling, assessment, and management. John Wiley & Sons.

Hannigan, B., 2018. Company law. Oxford University Press, USA.

Hopkin, P., 2018. Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.

Johansson, P.O. and Kriström, B., 2018. Cost-benefit analysis. Cambridge University Press.

Kendrick, T., 2015. Identifying and managing project risk: essential tools for failure-proofing your project. Amacom.

Kolotzek, C., Helbig, C., Thorenz, A., Reller, A. and Tuma, A., 2018. A company-oriented model for the assessment of raw material supply risks, environmental impact and social implications. Journal of Cleaner Production, 176, pp.566-580.

McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts. Economics Books.

Modarres, M., 2016. Risk analysis in engineering: techniques, tools, and trends. CRC press.

Parent, W.A., 2017. Privacy, morality, and the law. In Privacy (pp. 105-124). Routledge.

Plater, Z.J., Abrams, R.H., Graham, R.L., Heinzerling, L., Wirth, D.A., Hall, N.D., Abrams, R.H. and Graham, R.L., 2016. Environmental law and policy: Nature, law, and society. Wolters Kluwer Law & Business.

Poole, J., 2016. Textbook on contract law. Oxford University Press.

Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance. Auerbach Publications.

Spamann, H., 2016. Monetary Liability for Breach of the Duty of Care?. Journal of Legal Analysis, 8(2), pp.337-373.

Thapa Chhetri, B., 2018. Green Business and Its Marketing.

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