Risk management and risk business

1.

Kazakh Ablai Khan University
of International Relations and World Languages
Project work
Theme: Risk management and risk business.
How to overcome the risks?
Done by: Tokhtaev F 423 gr
Amandos E 423 gr

2.

PLAN
Risk management
●Method
●Principles of risk management
●Identifications
●Potential risk
●Risk communication
●Business risks
●How to overcome the risk?

3.

RISK MANAGEMENT
Risk management is the identification, assessment, and prioritization of risks
followed by coordinated and economical application of resources to
minimize, monitor, and control the probability.

4.

RISK MANAGEMENT
Risk management also faces difficulties in allocating resources. This is the
idea of opportunity cost. Resources spent on risk management could have
been spent on more profitable activities. Again, ideal risk management
minimizes spending and also minimizes the negative effects of risks.

5.

RISK MANAGEMENT
Certain aspects of many of the risk management standards have come under
criticism for having no measurable improvement on risk, whether the
confidence in estimates and decisions seem to increase. For example, it has
been shown that one in six IT projects experience cost overruns of 200% on
average, and schedule overruns of 70%

6.

Method
For the most part, these methods consist of the following elements, performed,
more or less, in the following order.
identify, characterize threats
assess the vulnerability of critical assets to specific threats
determine the risk (i.e. the expected likelihood and consequences of specific types
of attacks on specific assets)
identify ways to reduce those risks
prioritize risk reduction measures based on a strategy

7.

Principles of risk management
Risk management should:
create value – resources expended to mitigate risk should be less than the
consequence of inaction, or (as in value engineering), the gain should exceed
the pain
be an integral part of organizational processes
be part of decision making process
explicitly address uncertainty and assumptions
be systematic and structured process
be based on the best available information
be tailorable
take human factors into account
be transparent and inclusive
be dynamic, iterative and responsive to change
be capable of continual improvement and enhancement

8.

Identification
Source analysis - Risk sources may be internal or external to the system that is
the target of risk management.
Problem analysis - Risks are related to identified threats.
For example: the threat of losing money, the threat of abuse of confidential
information or the threat of human errors, accidents and casualties. The threats
may exist with various entities, most important with shareholders, customers
and legislative bodies such as the government

9.

Potential risk treatments
Once risks have been identified and assessed, all techniques to manage the
risk fall into one or more of these four major categories:
Avoidance (eliminate, withdraw from or not become involved)
Reduction (optimize – mitigate)
Sharing (transfer – outsource or insure)
Retention (accept and budget)

10.

Hazard prevention
Hazard prevention refers to the prevention of risks in an emergency. The
first and most effective stage of hazard prevention is the elimination of
hazards. If this takes too long, is too costly, or is otherwise impractical, the
second stage is mitigation.

11.

Risk communication
Risk communication is a complex cross-disciplinary academic field. A main
goal of risk communication is to improve collective and individual decision
making. Risk communication is somewhat related to crisis communication.

12.

Risk management and business
continuity
Risk management is simply a practice of systematically selecting costeffective approaches for minimising the effect of threat realization to the
organization. All risks can never be fully avoided or mitigated simply because
of financial and practical limitations. Therefore, all organizations have to
accept some level of residual risks.
Whereas risk management tends to be preemptive, business continuity
planning (BCP) was invented to deal with the consequences of realised
residual risks

13.

Business risks
The term business risk refers to the possibility of inadequate profits or even losses due to
uncertainties, changes in tastes, preferences of consumers. Every business organization
contains various risk elements while doing the business.

14.

Business risks
Business risks can be classified by the influence by two major risks: internal risks, and
external risks.
- Internal risks arise from factories such as human factors, technological factors, physical
factors, operational factors.
- External risks arise from factors such as economic factors, natural factors, political factors.

15.

Classification
The Business risk is classified into different 5 main types
Strategic Risk: They are the risks associated with the operations of that particular industry.
Business Environment: Buyers and sellers interacting to buy and sell goods and services,
changes in supply and demand, competitive structures and introduction of new technologies.
Investor Relations: Strategy for communicating with individuals who have invested in the
business.
Financial Risk: These are the risks associated with the financial structure and transactions of
the particular industry.
Other risks: There would be different risks like natural disaster and others depend upon the
nature.

16.

Innovation
For a business to keep up with competitors, or more importantly to get
one step ahead, there needs to be innovation.
This could be in the form of marketing and promotional initiatives
detailed in the marketing plan, staff training and welfare or embracing
new technology.

17.

Political and economic
Some businesses can be affected by a change of government and
government policy. Likewise, economic changes, such as a
recession or interest rate fluctuations, could be a risk to your
business.

18.

How to overcome the risks?
Step 1
Build your confidence with successes that come from taking small risks.
Confidence, like a muscle, grows stronger with increased use and strain.
Look for smaller opportunities where you can move out in business or at
work, where if you were to fail, the loss would be insignificant to your
overall financial or emotional outlook.

19.

How to overcome the risks?
Step 2
Plan for success in your business. When you follow a well-constructed
carefully-considered plan for business growth, your risk of failure decreases.
Be sure to evaluate your own strengths and weaknesses in your business
plans. Have a clear picture of the desired outcome, and how you will get
there.

20.

How to overcome the risk of management?
We know that risk management touches every PM process, from planning
through execution through closing. It is taught in the most basic of PM
classes and, if you were to ask, most would likely indicate its importance to
project success. However, in implementation, I find there seems to be
resistance in participation in the process.

21.

Conclusion
Build your confidence with successes that come from taking small
risks. Confidence, like a muscle, grows stronger with increased use
and strain.
It is taught in the most basic of PM classes and, if you were to ask,
most would likely indicate its importance to project success.
However, in implementation, I find there seems to be resistance in
participation in the process.