Risk management involves an individual who will handles or manage delicate situation in an organization which involves the staffs, clients and even the facility and able to solve it. A purpose means significance or importance therefore a risk manager is a must in a firm and be able to have the power or authority in all areas specifically the function of each areas and coordinates with them so that stability will be imposed within.
There are five purposes of a Risk management First, to identify a possible risk involves the question what could be the risk? This means that in risk management there should be awareness of something bad or unpleasant things might happen and able to identify what are those. The safety and security, quality control and budget also involves in a firm must also be distinguished. Second, is to reduce or allocate risk involves the question how can it be minimize? This means a risk manager should be prepared to give answer or have a solution that will arise and that has a plan on how it will be minimize or lessen the risk. Third, Guided decision making this involves set of action or goals of solution to be applied to answer a problem but be sure to take the advantage and disadvantages of each or the pros and cons as well so you will determine what must be applied in the firm. Fourth, provide logical grounds for planning means have an evaluation to plan things that are rational, and be sure that all are abiding the rules and regulation. Objectives of the firm should be considered. An example if there is proposal given review all the cause and effect of it then choose the best. Lastly, prioritization means to know very first things to be done or the most important one to be solved. An example in a situation that requires more attention like there’s a patient with a very high fever with bruises and severe migraine and so the high fever must have first remedy in place to avoid convulsion. In addition, have a list of all the weakness and strengths of the enterprise.
In a nut shell, a risk manager must be prepared at all times in possible risk that may encounter in the firm with a great idea of solution and so communication within the firm should be done to have less opportunity of mistakes in the future. All levels of structures must functions well within an enterprise as well.
A benefit means a good or boost result of something done. In all aspect of organization a benefit of risk management will bring asset to the company and may become the edge among the group. In order to earn it, a passion and dedication in the assigned task must be fulfilled.
In risk management there are the following benefits first, supports strategic business planning; a risk manager can bravely endures response in organized manner especially in emergency situation furthermore, resourcefulness and time- management is included. Also, present all perspective strengths and weaknesses of the company and then have the possible answers through modification.
With this, survival of the company is a benefit for the risk manager. Second, promotes continuous improvement meaning it is a big help to a risk manager to have an endless advance of ideas or thinking for possible challenges or struggles that may encounter the firm. It implies here, the alertness and cautiousness and the saying “prevention is better than cure”. Third, is the quick grasp of near opportunities, the risk manager must be familiarize with the history background, the current situation and the future plans of the company so when changes knocks whether in difficult or easy way expect lights on the risk. With this, implies the saying the “opportunity knocks once”, and so better to grab ideas that depends upon the favourable juncture for the whole system or section of the enterprise. Fourth, it enhances communication between units, that in every firm there are different units or sectors with their specific function that a risk manager should communicates and coordinates with one another to put on confidence and the ability that they will feel the acquaintance and accommodation of the risk management that will make the staffs easy to discuss matters towards their concern and be able to give proper address and the best ways to solve it. With this, harmonious relationship within the firm will develop and trust will be gained that will bring teamwork that can lead to grasp of the objective and be implemented. Lastly, reassuring stakeholders meaning in risk management will bring guarantee to the owners or cooperates that everything is functioning properly and well handled. Give assurance that all is well monitored from machines, personnel and building structures to attract more investors and even clients too.
I therefore conclude that in risk management it implies a mutual relationship. It is a give and take relationship within the firm to achieve the success. Teamwork and socialization are beneficial factors to be efficient in risk management. There must be unity and open to ideas of others to have the great answer in every question.
a. Reviewing of Activities and Internal Environment.
In risk management, reviewing of activities and internal environment is a critical inspection or examination should be done that surrounds the firm. It includes the conditions, situations and influences for the external factor and the internal factor. The internal factors in a hospital are the staffs and the clients otherwise the patients are the external. Coordinates to every part of the department in the organization to be able to review what are necessary works that lacks or needed for the satisfaction of the client.
b. Setting objectives
In risk management setting objectives is to be familiar in the objectives or aim of the company. Perception and experience may help. As a risk manager appoint or assign level of plans but make sure that it correlates within the objective of the owner. Consider not only one’s part but the total welfare aimed by the firm. Simply, have a goal that does not contradicting or conflicting the main goal to avoid worst probability output.
c. Event identification
This is the first step in risk management the event identification which is to know what is happening in the company. Be prepared, address it properly to the person and have a right plan procedure for unwanted events for the company. Plan well not to break down.
d. The Impact and Likelihood of Risk
In risk management the impact and likelihood of risk implies a list all the influence of the length and depths of priority involve and classified it which must come first or done first. This will resolve many possibility of high and low risk may be in terms of cost or budget of the firm or performance will be a boost.
e. Risk Response Plan
In risk management, risk response plan means if there is a risk take an action at once so be prepared to answer query or question based on facts and ideas. Have plans to fix things to be efficient and able to save time, energy and monetary. Several organized reserve solution must be applicable so be ready at all times.
f. Control Activities
Control Activities means it is an element of risk management that all exercises are governed and measure defending the company by controlling the appearance of risk. This is essential in lessening troubles. An example is to be resourceful in organizing a recreational activity that fits the company.
g. Information and Communication.
These factors information and communication in risk management are informing people meaning lending data of knowledge and for communication is to transmit this information. It goes together first to gather and collect new ideas to be aware and be advance in what are the latest issues or events maybe in technology or policy and then through message like chatting, and talking will give a great impact with one another.
In risk management, monitoring this is the vital element among all because it is applicable to all like in reviewing activities, setting of objectives; identifying the event may come and impact, proper response in risk, controlling activities and informing and communicating. It is the main and primary concern used in budget, addressing complaints, and time.
At the end of the day, components or factors of risk management are very beneficial. It affects each other within the company. It involves the personnel, the equipments everything that it takes an opportunity perhaps, a risk management is learning, interaction, monitor and sharing messages at all times in order to work freely with unity and within it will result or have a finale to have less mistakes or human errors in the future giving the best ruling in risk management.