Commonly Used Measures of Risk
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Bureaucracy and Organizational Change
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The World Economy is in a Perfect Storm of Economic Events The world economy is stagnating and while the stock market is booming, the real economy that consists of manufacturing and agriculture is in dire straits. While the United States is being nudged towards recession due to the effects of the US-China Trade War, Europe, […]
The Global Political Economy and its Evolution through the Decades
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Any project immaterial of the size of the same carries a lot of risks, which may be financial, non-financial, legal or physical.
Having an effective risk management plan is first and foremost to the success of any project. The task is to anticipate these risks well in advance before the project takes off.
A good risk management plan carries number of tools and strategies to mitigate risk. The strategy may be to avoid risk or transfer a component of it another project so that the impact is reduced.
Other risk management strategies may suggest the acceptance of the risk. This is decided after a thorough cost/benefit analysis. The risk management plan also depends on how the risks are prioritized by the organization.
Based on relative priorities risks are given weightage, for example a certain organization may be more concerned about the physical and legal risks, whereas another organization may be focusing on operational or strategic risks.
Risk priority defines the strategy and finally the plan.
Besides keeping the risk management cycle in mind; before the final draft, an effective risk management plan may traverse through following:
Enlist the categories of the project and then evaluate each for risks. For example there may be a cost category; determine the factors that may increase cost and make a list.
The formulation of the plan is in tandem with the risk management cycle which acts as the basic guideline. Both work in sync, in fact the interventions in step 3 discussed above cannot be without a thorough understanding of the cycle.
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