Discussion on Risk Management Concepts
The basic concept of risk management is very simple: every undertaking has a
potential for success or failure. In any activity, several factors have to be
considered in order for it to be successful—or several RISK factors have to be
managed in order to avoid failure.
Therefore, the concept of risk management is another science in business
designed specifically to address risks. It is about identifying what can go
wrong in an activity and the plans of action on how you can avoid it or how you
can minimize the damage if it does go wrong.
Risk management can vary depending on what project you want to achieve. Whether
you are an individual wanting to publish a research based scientific book or a
company wanting to change or improve organizational goals and projects, risks
should be assessed and addressed so that proper action can be undertaken to
manage, control, or completely eliminate the risk.
To further discuss the concept of risk management, factors have to be
considered. First, some risks are a direct result of taking or NOT taking a
business opportunity (moving or branching out to a new location, expanding
product lines, etc). Factors that need to be addressed are competition,
customer loyalty, customer traffic, among others. Second, some risks are due to
work related hazards. These risks are easily identifiable and appropriate
action can be introduced to prevent accidents from happening. Third, some risks
just cannot be avoided and some of them cannot be easily identified. Examples
of this type of risk are natural disasters, the Y2K bug and terrorism. These
risks cannot be predicted but preparations can be arranged to minimize the
effects and fast-track the recovery process.