The paper "Risk Management at Operational Management" is a great example of management coursework. ISO 31000 defines risk as to the effect that is resultant of the uncertainty of objectives. The effect is a negative deviation or a positive deviation of the expected. It is for that reason that the function of risk management is essential within all forms of organizations. Risk management describes the methods and coordinated sets of activities that are applied for the direction of an organization and the subsequent control of the risks that have the potential to disrupt the ability of such an organization to achieve its goals.
ISO 31000 of 2009 describes it as the architecture used in the management of risk. It discusses the risk management framework and principles, and the operational risk management process. In the context of an organization, the risk is the uncertainty that comes in relation to the activities of the organization. That means that risks cause uncertainty and the possibility of unexpected deviances in adversities. The organizations, therefore, put measures in place for risk mitigation because risks have the potential to take a business into losses.
Depending on the severity of the risk, the business could lose investors, cease operation, or bounce back into operation. However, bouncing back and surviving the negative impact of risks that blow out of proportion depends on the preparedness of such an organization with regard to such risks. There are various risks faced by organizations such as those related to the operations, strategy, market, business reputation, and finances. This paper focuses on operational risks. Operational risks are those that organizational faces in its daily activities.
They are present unpredicted and unaccounted deviances from the projected risk. In such cases, the actual losses incurred as a result of a failure in the systems, internal and external events, people, and systems. Such risks include those related to fraud, privacy protection, security, legal issues, and environmental and other physical risks. The results of a blow out of such risks include security breaches and the loss of tangible property or intellectual property. Such losses may cripple the operations of the company and give the competitors an advantage over the company. That is mostly the case of the security breach is done by the competitors and the intellectual property used for their advantage.
Others are those caused by legal issues where the company experiences losses in terms of reputation alongside financial losses. For instance, there is the risk of the failure of the network within an organization which affects the service delivery. The other example is the risk of a system failure or human error that causes the application of inaccurate rates in the billing system of the organization. The responsibility of the operational manager in the mitigation of risk is to ensure that the organization is fully informed of the impending risks faced by the organization.
The operational risk manager works with all the business units to ensure there is a draft of an operational risk assessment. Other functions include the facilitation of the formulation of a risk assessment framework and ensure the compliance of the organization with the applicable standards in relation to operational risk.