Manage risk Essay Example

  • Category:
    Business
  • Document type:
    Assignment
  • Level:
    College
  • Page:
    1
  • Words:
    673

Manage Risk—Summative Assessment 1

Question 1

What is the purpose of the standard AS/NZS ISO 31000:2009 Risk Management? (100-125 words)

From the one hand, Standard AS/NZS ISO 31000:2009 Risk Management provides a framework and principles that organisations and agencies can use while developing framework and programmes for risk management. This Standard gives a leeway in helping managers to consider the possibility of risk occurrence, assessment of the extent of the risk and ways of mitigating the risk (AS/NZS ISO 2009). Specifically, the Standard introduces different principles that help in managing risks occurring in the process of attaining organizational goal. Some of the principles include;

  • Creation and protection of values

  • Decision making processes

  • Becoming integral part of organizational processes and

  • Assessing and addressing uncertainty

According to the standard, these principles are aimed at managing risks effectively. It further provides guideline for identifying and monitoring risks.

manage risk

Duty of care has been interpreted differently depending on the working environment. However, consensus among studies has considered duty of care to mean a case where employers are having the duty of care to workers under them (Chan 2016). According to this definition, employers are supposed to take all the needed steps considered reasonable to ensure that the environment is healthy, safe and wellbeing. Additionally, showing concern for mental and physical health of workers should not be seen as a legal duty of employers instead, a duty of care remains part of employers’ occupational health and safety roles and obligations for employers. Generally, duty of care entails the following:

  • Informing workers of any risk to their safety and health

  • Procedures in place that ensure they are safe from injuries

Question 3

What is risk management? Why must risk management procedures be followed? (100-125 words)

Current challenges in organization require assessment of risk from different perspectives. As a result, definition and reasons for following risk management has since changed. Aebi, Sabato and Schmid (2012) argue that risk management means critical evaluation of risks thereafter putting the needed strategies to minimize or avert effects of the risk. This definition provides that risk management is the process where organizations are interested in establishing potential problems and preventing them before they escalate. Following risk management procedures are essential as they will help organisations to identify sources of their risk, prioritise those risks according to their severity and designing better approach for managing them. Secondly, following the procedure will help in identifying cycle process that monitor the effectiveness of activities designed to manage risks.

Question 4

What are the advantages and disadvantages of carrying out a risk assessment for a whole organization and its overall operations? On what basis/ scope might risk assessment be carried out if they are not carried out for an entire organization? (100-125words)

The advantages and disadvantages of carrying out a risk assessment in an organization remain multifaceted depending on the nature of risk. Beginning with the advantages of a risk assessment, Soin and Collier (2013) argue that the process helps in designing the management system. That is, it helps in the identification of chances and likelihood of risks and effects it can cause to the organization. Secondly, risk assessment helps organisation in selecting adequate countermeasures that will directly deal with risks expected or already existing risks. On the other hand, risk assessment has been found to be disadvantageous especially to organisations that may face more than one risk at a given time. As a result, the assessment may not provide the needed control measures designed to manage specific risk.

References

Aebi, V., Sabato, G. and Schmid, M., 2012. Risk management, corporate governance, and bank performance in the financial crisis. Journal of Banking & Finance, 36(12), pp.3213-3226.

Chan, G.K., 2016. Finding Common Law Duty of Care from Statutory Duties: All within the Anns Framework. The Tort Law Review.

Soin, K. and Collier, P., 2013. Risk and risk management in management accounting and control. Management Accounting Research, 24(2), pp.82-87.

Standards Australia/Standards New Zealand Standard Committee, 2009. AS/NZS ISO 31000: 2009 Risk management—Principles and guideline. Standards Australia/Standards New Zealand Standard Committee, Sidney.