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Introduction > Features of risk management - Pg. 5

Introduction 5 been identified, then there will be no means of evaluating whether the risk manage- ment initiative has been successful. Therefore, good risk management must have a clear set of desired outcomes/benefits. Appropriate attention should be paid to each stage of the risk management process, as well as to details of the design, implementa- tion and monitoring of the framework that supports these risk management activities. Features of risk management Failure to adequately manage the risks faced by an organization can be caused by inadequate risk recognition, insufficient analysis of significant risks and failure to identify suitable risk response activities. Also, failure to set a risk management strategy and to communicate that strategy and the associated responsibilities may result in inadequate management of risks. It is also possible that the risk manage- ment procedures or protocols may be flawed, such that these protocols may actually be incapable of delivering the required outcomes. The consequences of failure to adequately manage risk can be disastrous and may result in inefficient operations, projects that are not completed on time and strategies that are not delivered, or were incorrect in the first place. The hallmarks of successful risk management are considered in this book. In order to be successful, the risk man- agement initiative should be proportionate, aligned, comprehensive, embedded and dynamic (PACED). Proportionate means that the effort put into risk management should be appro- priate to the level of risk that the organization faces. Risk management activities should be aligned with other activities within the organization. Activities will also need to be comprehensive, so that any risk management initiative covers all the aspects of the organization and all the risks that it faces. The means of embedding risk management activities within the organization are discussed in this book. Finally, risk management activities should be dynamic and responsive to the changing busi- ness environment faced by the organization. Book structure The book is presented in six parts, together with three appendices. Part One provides the introduction to risk management and introduces all of the basic concepts. These concepts are explored in more detail in later parts. Part Two explores the importance of risk management strategy and considers the vital importance of the risk manage- ment policy, as well as exploring the successful implementation of that policy. The emergence of risk management as a profession has resulted in more attention being paid to risk management competency frameworks and the importance of interper- sonal or soft skills. Part Two places greater emphasis on these issues in recognition of these recent developments. Part Three considers the importance of risk assessment as a fundamental require- ment of successful risk management. Risk classification and risk analysis tools and