Risk Management

Environmental uncertainty and competitive intensity of companies and executives they have been faced with numerous challenges . Effectively manage these challenges , new approaches to project management and specific competencies and recommended. Identifying and managing risk is one of the new approaches to strengthen and enhance organizational effectiveness are used . In general, the risk of incurring losses and the uncertainty as to the likelihood of different types and are diverse classifications . One of these categories is a risk of speculative and potentially dangerous . Risk of all forms of common elements such as content , activities, and conditions are consequences . Strategic and operational risks are classified as other risks . The concept of risk assessment and risk management to adopt strategies for risk management implies . Types of risks in terms of likelihood and their impact on portfolio risk and apply appropriate strategies to divide the result ( transfer , avoidance, reduction and acceptance ) is.

Introduction
Major changes in the business environment , such as globalization of business and the speed of technological change , increased competition, and has difficulty managing organizations . In today's business environment , management and staff have the ability to deal with ambiguous and complex interrelationships and dependencies between IT , data, tasks , activities , processes, and people have to bear . In such a complex environment, organizations need managers who took the complexities inherent in his important decisions regarding their separation . Effective risk management is based on a valid conceptual principles , will form an important part of the decision process . This paper examines how these principles by identifying the key elements of risk and potential impact ? The elements in the success of organizations and how they are coping and risk management are discussed .
The definition of risk and its types
The definition of risk : understanding the nature of risk , you must first define it began. Although many differences in how risk is defined , but the definition is provided below , indicate briefly the nature of the risk that is likely to incur losses (DOROFEE-96). This definition includes two main aspects of risk :
* The amount of loss should be possible ;
* Uncertainties related losses should also be present.
Most definitions of risk is as bright as its two aspects , namely the loss and uncertainty are discussed. But the next three ? It 's a choice, which is often referred to as implicit in the choice of how to pay attention to it. These three conditions , fundamental risk and the basis for in-depth review ' than that.
Different types of risk : risk so widely used , but since different audiences often have slightly different interpretations (KLOMAN-90). For example , risks associated with possible approaches to risk perception depends on the circumstances . Sometimes, a situation is possible opportunities and potential profitability ? Losses may provide . But in other cases, there is no profit opportunity , only potential possibility ? There are losses . So risk can have two other subdivisions :
* Speculative risk ;
* Potentially dangerous .
The figure depicted is a difference between the two categories . Soda staffs at risk , you can make a profit realized in the process of recovery than the existing state of mind . And simultaneously also the potential for the experience ? A loss or worse than the status quo circumstances have . Gambling is an example of a speculative risk . When you place a bet , you should expect to lose the chance to gain more money against your bet amount , can be evaluated . In this example , the overall objective is to increase Srvttan , and your willingness to invest in risk to Frahmsakhtn is an opportunity Svdavranh .
In contrast , the risk of a possible potential dangerous ? There are losses and no chance to improve the situation does not provide routine . For example , Bhchgvngy consider security as a critical risk to consider . Suppose that you are concerned about the protection of valuables that are kept at home . Your main objective in this example , ensure no misappropriation of objects in your home without notice or permission from you. The quality of security objects, it is possible that you decide to install a security system in your home to prevent thieves can steal objects . Note that the purpose of this example , by definition, only focus on limiting risk ? Potential possibility ? The losses . The most favorable conditions , you just take what you already own it , you are protected . There is no potential for profit .
In this example , you tend to gain peace of mind due to avoid unpleasant consequences for your home . Your goal as a sense of security, in order to determine the conditions that risk . After analyzing the situation, you may decide to install a security system in your home can create obstacles to thieves . May be argued that the increased security would probably bring you a feeling of greater security and peace Khatrmyshvd subsequent business you 're looking for . In this example , you want to invest money in a security system to provide an opportunity for you to feel more secure . Security risk in this example , is speculative because of the level of tolerance for risk (ie , the amount of money you want to invest in a security system ) with an opportunity to realize the amount of interest you (eg , your peace of mind ) it is in the balance .
Therefore , as perfectly clear risk classified as dangerous speculative and based on its type , but based on the perception that it is acceptable category .


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The main elements of risk
Risk of all forms , whether they are classified as speculative ventures , whether as potentially dangerous , are common elements include the following four elements :
1 - Content 2 - Level 3 - of 4 - Aftermath .
Content , the context, situation, or where a risk to the environment and determines the activities and circumstances associated with the condition. In other words , the content provides a view of all outcomes measured . Without specifying an appropriate content , certainly can not be determined , what activities, situations and outcomes should be considered in risk analysis and management activities . Therefore, the content , the basis for all further activities and provides risk management .


After creating a content of residual risks are properly considered . Act or event which is the active element of risk . Activity, the active element of risk and should be combined with one or more conditions , especially for emerging risks . Risk of all forms of activity are created without action , there is the possibility of risk .
While active , the active ingredient is risk conditions form ? Passive element of risk. This condition determines the current situation or set of circumstances that could lead to the risk . Conditions , in particular when it is combined with a starter activity , can generate a set of outcomes or outputs . Consequences, as the last element of risk , potential outcomes or impacts ? A combination with a specific condition or conditions .
Strategic and operational risks
Strategic risk , the risk that an organization is to achieve its business objectives . Potential in the context of this definition ? There are both benefits and Zyandhy , which makes the speculative nature of strategic risk . Notice how the four elements of risk to be used for strategic risk . For example , suppose that the absence of senior management in a financial institution pending the court ? Entering a new market , such as online banking services . Since it Bhvast ? Decision process is implemented , management should potential opportunities and threats ? It will examine the market .
Content on this particular example , the market for online banking services . All actions, conditions, and consequences must be considered within this particular content . Activities in this example have been measured over a range of strategic options . Management is pursuing a number of options , including the following four cases are before :
1 - decide for immediate entry into the market ;
2 - do a little precaution by providing testing services ;
3 - We have practically nothing, but keeping Rights Reserved for future action ;
4 - decision not to enter the market .
Circumstances of this case, including current trends and uncertainty about online banking services , including a number of potential customers , what competitors might do , and the core competencies of the organization at the moment. Combination of strategic activities with current trends and uncertainties , a range of outcomes, or set of benefits and potential Zyandhy ? For organizations that are generated . Opportunity and risk management relative degree of strategic activities is examined . They make the best choice based on risk tolerance against the amount you wish to obtain benefits from its opportunities , they do.
Thus , the four main elements of risk is a useful tool for analyzing and understanding provides a strategic business risks . When considering these elements is also a dangerous risk , including operational risk, can be useful .



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Operational Risk
Managers in all organizations dealing with risk . Management focus on higher levels of organization in nature is often the merchants ? Risk. Management , institutional asset investment risk against potential return ? Adjusts its investment and strategic considerations , the risk in the portfolio of activities and investments , management does. However, at the operational level of an organization , personnel management typically focused on managing operational risk is a dangerous risk . The staff and management of business processes Bhajra in turn , operational risks are beginning to emerge .
Unfortunately , the court 's definition of universality ? The term operational risk does not exist. Operational risk , as defined under Basel II, risk of loss resulting from the inadequacy or failure of internal processes , people and systems or from external events can be defined .
There is also another definition of operational risk : operational risk , the potential possibility ? Failure to mission objectives . This definition includes losses ( failure to achieve mission objectives ) and uncertainty ( probability of occurrence or non-occurrence of failure ) is. Simultaneously , this definition is suitable for use in many different fields .
In summary , although various forms of risk ( such as business risk, operational , project and security ) exists, but all of them have the same conceptual basis . However, there are significant differences between different types of tangible content based on perceived risk , while giving . For example , a speculative risk , a business risk has unique qualities that make it a dangerous risk , including operational risk , distinguishes . Speculative nature of a commercial venture profits and losses will be followed , while operational risk is not known to have any chance of profitability . As noted earlier , the definition of operational risk used in this text is the same : operational risk , the potential possibility ? Failure to mission objectives . Figure 3 shows how to interpret the four elements of operational risk represents the risk . Items in the shape reflects the normal terms of operational risks is described . Note that the mission of a business process in order to have the same content that operational risk . Defining mission, the first stage ? In describing the operational risk is critical because at this stage of diagnosis , interpretation constitutes operational risk . All other elements are shown in Figure 2 , with the mission of a business process is reviewed.
The act or accidental ignition when combined with existing vulnerabilities to a range of potential losses ? Leads. Vulnerabilities that expose the flaws and shortcomings of the process will be losses , as the impact of potential losses ? Due to a perceived risk , are defined. The operational risk , all losses have occurred in the follow-up mission . Since this is a dangerous risk , operational risk and provides the potential for Zyandhy not offer any potential for profitability .
A kind of additional conditions that must be considered as the equation for operational risk ; controlled. Interface in Figure 2 ? Between controls and sparks , vulnerabilities and impacts are shown . Control the conditions and situations that triggers a process towards the realization of its mission . They include policies , procedures , routines, jobs , status and organizational structures in order to establish a reasonable assurance of achieving the mission and removal, detection , and correction of adverse events , have been designed .



The following controls can Bhrvshhay , reduce risk :
* Remove the starter or spark causing an accident ;
* Control the occurrence of a spark or initiating and implementing contingency plans in good time ;
* Reducing vulnerabilities ;
* Reduce the impact or potential losses .
Therefore , an accurate measurement of operational risk controls must include the effects of the four elements are present .
Usually , those relating to operational risks threatening the use of the term . The threat or occurrence of a condition that is causing the risk . A combination of a spark or a threat or vulnerability is because the sum of these two Nsrmshkhs the circumstances that create the potential losses .
Risk Management
In general, the assessment process or risk assessment , risk management and strategic planning for office ? Risk. Overall, the strategies used include transferring the risk to other sectors , avoiding the risk, reducing the negative effects of risk , and accepting some or all of the consequences of a particular risk . Traditional risk management , focusing on preventing risks of physical and legal causes ( eg natural disasters or fires , accidents , deaths and litigation ). Financial risk management , on the other hand , focuses on risks that can use financial instruments to manage the business . Intangible risk management , focusing on the risks related to human capital , such as knowledge of risk , risk, risk relationships and operational processes . Regardless of the type of risk management , risk management teams are all large companies and corporations, and small groups in an informal , in the absence of a formal risk management are used .
In ideal risk management , a prioritization process to the risks that have the highest probability at most Zyandhy and risks with lower probability and lower Zyandhy are addressed below . Consequently, the risks can be found in the organization of these two dimensions is shown in Figure 3 Nyztbqh be classified .

Strategic risk is the risk that an organization takes to achieve your business goals .
Prthvl today's business world , risk management has become increasingly important .
Intangible risk management , introduces a new type of risk , the risk that its probability is 100 percent , but because of the lack of organizational ability , be overlooked . For example, knowledge of the risk , which occurs when students have weaknesses and flaws can be used . Risk relationships occur when ineffective collaboration occurs and results . Risk, operational process, which occurs when the fruitless operations occur. These risks directly via reduced productivity of knowledge workers , and led to a drop in economic terms of cost-effectiveness , profitability , service, quality, reputation , brand value and quality of earnings . The Intangible risk management makes risk management identify and reduce risks due to declining factor productivity are a direct and immediate value to be created .
The result can be a task in risk management processes , methods and tools for the office ? Risk in organizational activities . A disciplined environment for pioneering and non- passive decision provides the following :
* Continuous assessment about what caused the error ( Risk )
* Identify key risks in order to deal with them
* Implementation of appropriate strategies to manage those risks
Risk Management Paradigm
Paradigm or model of risk management, a set of tasks as a series of interconnected activities across the lifecycle of a mission are the following :
* Identify risks * of * Planning * follow * control.
Continuous functions in risk management : risk management and continuous functions are discussed below . The risks normally frequent during these tasks , but it 's activities online, real-time (ie to track risks while Mvazatsh new risks are identified and analyzed ) , and repetitive ( eg, for a risk reduction program may another risk is useful ) occur throughout the life cycle of a mission .
* Identification : search and locate risks before they become problematic .
* Analysis : turning data into information risk decisions. Assess the effect of probability Vmhdvd ? When classifying and prioritizing risks and risk.
* Planning : translate risk information into decisions and actions ( both present and future) and implement its activities.
* Tracking: Evaluation of the risk -reducing activities .
* Control : correct relative risk reduction programs .
* Communication : Information and feedback from external and internal risk activities , current risks and risks arising provides.
Risk Management Strategies
When risks were identified and assessed , all techniques of Adar ? Risks in one or more of the four ? Main are :
* Transfer
* Avoid
* Reduce ( or mitigate )
* Acceptance ( or maintenance )
Optimal use of these strategies may not be possible . Some may require Bstanhayy could be that the person or organization in the field of risk management decisions will not be accepted .
Avoid the risk : Strategies to avoid the risk of not doing the activity that caused . For example, it is possible to buy a property or enter into a business is not to be overlooked , problems and headaches to be avoided . Another example in this context , not flying aircraft to avoid the risk of it being stolen . The strategy seems to avoid the solution to all Ryskhast , but avoiding risks also means Svdavryhay Zyandhy about the potential risks that may not be achieved due to its acceptance . The lack of a market in order to avoid risks , the likelihood of achieving profitability will spoil .