Modern Risk ManagementThis essay portrays the components modern risk management and delves into details about how these requirements can be implemented in an organisation in preparation to combat risk and safeguarding the operations of an organisation should an incident that can potentially cause a disruption in the normal activities of an organisation occur. Risk management in the modern world has taken equal if not more importance in the running of organisations that finance and resources management have enjoyed for many many years. The essay briefly describes what a risk management programme is and in depth explains how security risk management, crisis management and contingency planning can be developed and implemented in a modern risk management programme.
The essay also examines who in an organisation is vital in the formulation of a risk management team and outlines what their roles in the team are and why it is important to include them. Risk management can be defined as an attempt to identify and then manage the threats that could have severe impact or potentially bring down an organization. In general terms risk management generally involves reviewing the operations of an organization, identifying of the potential threats to an organization and assessing the likelihood of those threat occurring, and lastly taking appropriate action to address threats which are the most likely to occur (Bateman, 2006). The world has quickly moved from the old times when risk management was merely thought of as a matter of securing the most appropriate or right insurance.
Traditionally, insurance coverage normally came in quite standard packages, so people had a tendency to not give risk management the serious attention it needed.
As the world has developed over time, that kind of impression about risk management has undergone a dramatic change. Recent times have seen a major increase in rules and regulations in organizations, lawsuits from employees and more reliance on key resources, hence risk management is rapidly becoming a management practice which has the same kind of importance given to areas such as financial and resources management (Myers, 2002). Organizations have seen the need to ensure that they are adequately prepared to handle the more unusual, extreme and infrequent occurrences which pose a threat to an organization’s staff and operations.
Some of these risks include but are not limited to: explosions, fires, terrorist activities such as bomb scares and suspect packages, product contamination, flooding, robbery and kidnapping. When an organization puts in place effective plans, it as a result minimizes injuries to its staff and down-time, helps to maintain morale of its staff, protects and also enhances the reputation of the organization (Silva, 1995). Developing a good risk management programme takes a process that should be effectively supervised professionally by competent and well informed professionals who understand the different dimensions of risk in the developing challenging world of doing business.
Risk management is no longer a matter of getting a good insurance cover as there are a lot of unpredictable situations that could cripple a business in an instant and those new risks need to be assessed by professionals who are capable of thinking outside the box and identifying threats the other people would ordinarily brush aside (Myers, 2002).