Risk Management Essay for Business.

Identifying and analyzing risks

Question:

Discuss about the Project Management For Engineering Risk.

The risk management helps in identifying and analyzing risks. It is used to take steps for reducing risks to an acceptable phase. The approach helps to determine tools, techniques, processes, responsibilities and roles for a particular project. The plan of risk management describes way in which risk management is structured and performed on the project.

The instance of China blasts that took place in Tianjin port city is considered an epitome. The primary objective of this report is to recognize and assess the risks. A plan is to be created to measure and monitor performance. The process used for analyzing the strategic issues is needed to be described.

The primary challenges are needed to be criticized having a significant effect on the risks related to various engineering activities. The risk management tools and its identifications are effectively employed. Lastly, risk perception, risk communication and various factors behind risk assessments are demonstrated in the study.

Safeguarding business from fraudulent activities is a core component of the entire strategy of risk management credits. An effective risk management is a challenge for various companies that never have different systems of risk management in place (Haimes, 2015). Some of them relevant to the China blast are described hereafter.

The risk management after initialization is a repetitive task dealing with assessment, planning, implementing, controlling and monitoring performed measurements and enforced security policies.

Safety management system:

It is the safety management to manage business activities and then applying frameworks, principles and processes for preventing accidents, injuries and minimize the residual risks. The system of safety management is a systematic method for managing safety (Wu, Chen & Olson, 2014). This includes the organizational structures, policies, procedures and accountabilities. It is scalable, and hence it could be tailored to the complexity and size of organizations.

Environmental management system:

It is the system that helps to gain environmental goals via consistent evaluation, review and development of the environmental performances. This constant review and revision recognize scopes to improve and implement the environmental performance of the companies. This never dictates the level of environmental performance that is needed to be achieved. The environmental management system is tailored to individual targets and objectives (Almeida et al., 2015). The environmental management systems have been addressing regulatory demands in a proper and cost-effective way. It is proactive approach and helping to decrease risks of the non-compliance. This also enhances the safety and health practices of the public and staffs. It also helps in addressing non-regulated problems (Glendon, Clarke & McKenna, 2016). Examples of this are the energy conservation. This has been promoting the core operational controls and the stewardships of the employees.

Creating a plan for performance measurement and monitoring

Monitoring the portfolio:

The risks are to be identified sooner through monitoring changes in the portfolio. This is done with the proactive notifications and alerts. The services must combine various credit attributes, risk scores and the additional segmentation tools. This provides a robust tool to manage risks.

Identifying the risks and scopes within the portfolio:

The overall profitability could be increased by accurately pinpointing risks related to the individual accounts (Park et al., 2013). Access must be provided to the involved account-level and internal customer data. This allows eradicating the credit risk and creating the retention programs or recognizing the cross-sell scopes.

Automating the credit decisions:

The multiple data sources must be tapped. The advanced analytics must be accessed to create a consistent and quick credit decisions around the complete organization. Various decisions products help in mitigating the risks actively with streamlining the credit decision processes.

To effectively employ determination and tools of risk management for suggesting and analyzing the realistic scenarios of risk is described in this section. The developing of risk management strategies are also demonstrated here.

The kinds of risks have been varying from business to business. However, preparation of the risk management plan has involved a general process. The risk management plan details the strategy to deal with the risks particular to the business (Lam, 2014).

Time allocation is important. The resources and budget to prepare the risk management plan and business impact assessment are also vital. It helps in meeting the legal obligations to provide safe workplace and could decrease the likelihood of the incident adversely affecting business.

These are discussed below:

Inventorying	In the project of risk management, one of the difficult parts is to keep track of the services, devices, applications and additional resources that are already fielded. Without knowing what has been inside systematic evaluation of the effect of a provided vulnerability is impossible (Bromiley et al., 2015). Further, without knowing what devices have been supporting tools for assisting the current asset inventory one cannot analyze the disruption or the extent of the compromise to those events. Hence one never has tool for assisting to keep resource inventory. One should consider some open-source and free options in that area.
Risk tracking	There have been many tools that are free. These could be used for tracking risks and the mitigations. This also helps in visualizing dangers by severity, generate reports and finish the other items of logistics legworks.
The threat analysis	The universes of threats are to be analyzed existing and analyzing the risks of the organization. This might rise because it could be challenging (Pritchard & PMP, 2014). Possessing the tool helping in automation and streamlining process is useful.
Vulnerability information	In many cases, there has been no substitute for the scanning of vulnerability to find out what technical weaknesses has existed the present scenario.
Monitoring	In dealing with reality, the current monitoring of environment is a crucial part of the holistic process of risk management. This is because unexpected downtimes or changes are potentially symptomatic of the risks coming to pass. This has also been impacting the risk environment.

The strategies for dealing with the threats are discussed hereafter.

Avoidance

This eradicates the risk through eliminating the reasons. This has been leading to not doing the tasks or doing the jobs differently. Project managers should also isolate or change the objective that has been in trouble. This could be done through improving communication taking place between the stakeholders or through the use of expertise (Munier, 2016). An instance of this approach is extension of schedule of changing of scope of the project activities. The risks that are too hazardous are also another example. This might lead to loss of life and could be done way through closing the project entirely.

Transfer

In the approach of risk transfer, the risk could be shifted to the third party. This includes third parties such as the insurance vendors or companies. They are paid for accepting or handling risk on behalf of the company. Thus ownership and effect of uncertainty get developed by the third parties. The payment is known as the risk premium. The contracts are being signed for transferring the responsibilities of risks to third parties (Wolke, 2017). The transfer of risks never eliminates the risk. However, it eradicates direct effect of the risk on the project. Some transference tools are the performance bonds, insurance policies, warranties and so on. The approach is ingenious to cover the economic risk exposure.

The risk for the China blasts has consisted of two parts. The first one is probability of anything that goes wrong. The second one is reverse outcomes. The risk could be hard to find. Besides, risk analysis is an effective business tool for tasks involving various risks. This helps in identifying and making sense of risks faced while taking decisions (Bowers & Khorakian, 2014). Thus it helps in managing risks and decreasing the effects of the plans.

The usefulness of risk analysis takes place in various cases. The first case is when projects are planned for helping to neutralize and anticipate the potential issues. It is useful when it is decided whether or not to go forward with the given project. Further risk analysis is important in the situations of developing safety and manages the effective risks at work (Hopkin, 2017). Next, risk assessment is helpful to prepare for events line technology or equipment failure, staff illness, natural disasters and theft. Lastly, risk analysis helps to plan for changes in environment like when new competitors emerge in the market or there happen any alterations on the government policy.

Tools and techniques for risk assessment

The different approaches that could be carried out for detailed analysis for the China blasts are discussed hereafter. First of all, the above list should be fetched as the one to see that whether any threats have been relevant. Structures, processes and systems must be thought about that are used and assess the risks for any of those parts (Islam, Mouratidis & Weippl, 2014). Vulnerabilities are needed to be spotted under them. Other people could be asked who might have different view-points. As a decision maker of a team, the people could be asked for the input. The other employees must be consulted including those who have been running same kind of projects.

There has been no definitive answer to the questions about the standard metric for knowing the proper status of application security. The unanswered questions displayed gateway for the attackers in continuing exploiting applications (Sadgrove, 2016). Thus, a security metric quantifying the risk that is posed by the applications has been significant to undertake decision in the thwart attacks and security management.

At present various generic risks assessment metrics could apply to assess the ASR or Application Security Risk for the China blasts. It has not been encompassing the primary elements of the application security like the efficiency of countermeasure, compliance and application priority. Thus the outcomes have been performing commensuration with real risks that are posed by the application security (Modarres, Kaminskiy & Krivtsov, 2016). The actual application security has been perceived and never measured. Thus, companies have been unable to impose the needed controls of security. Moreover, business is unaware of susceptibility of applications to attack. It has been the primary reason for the consistent attacks on the applications besides deploying the strong security measures. The measurement of application of security risks has needed a specially designed metric involving every factor of the application security.

The controlling of risks has been involving the usage of the current resources for handling the situations along with deploying the contingency plans is investment in alternative resources for accomplishing the objectives of the projects (Bahr, 2014). The review of plan of risk management with the team assures that every member knows the ramifications of possible limitations and solutions. The effective analysis of risk analysis has been depending on the identifying of limitations of the techniques used. They are discussed below.

Limitations	Discussion
Lack of data	Various risk assessment tools have been involving the collection of data. For instance, the creation of simulations or models has been helping to predict the effects of events like natural disasters that generates from the harsh weather conditions. However, unfortunately, the generation of the proper models needs a high collection of data (Nicholas & Steyn, 2017). This has been costly and never reliable completely. Further, legal and ethical or social needs might override the economic advantages. The usage of data for making decisions is not wise as the usage of simple indicators never display the complicated realities of the cases at hand. The application of choice meant for the little aspect of the project to the complete project has been resulting in unforeseen results.
Insufficient assessment time and expertise	The usage of decision trees of assessing the risks has been supplying the comprehensive input. However, consequences of assessment rise from the myriad of the possibilities providing unwieldy (Mazaheri, Montewka & Kujala, 2014). The latest technologies help in using the software programs in simulating activities causing adverse effects on project schedules. These projects turn out to be more cost-efficient. Besides this, comprehensive knowledge and skill are needed in interpreting the outcomes properly. The complicated programs along with various variables need the trained personnel. They have been not assigned to the projects. In the same way the assessment of historical data for determining possible threats needs the access to prior project documentation and the proficiency to interpret criteria utilized to evaluate risks on the previous efforts (Carvalho & Rabechini Junior, 2015). The dependency on historical data has been alone creating the fake sense of the security as any up-to-date knowledge and skills are not applicable by the trained personnel. However, although largely expert individuals work to define threats and suggest resolutions, the time is insufficient to collect the expertise of every people. Thus the conflicts get raised. The qualitative analysis through utilizing the conversational input has been helpful to recognize risks. However, numerical data generates through quantitative methods is also used for balancing the decision making.

The individuals reacting to the risks have been consistent to idea of risk. This has been their viewpoint influencing action or behavior. The making sense of the individual risk perception of natural hazards has been needed to affect the inaccurate beliefs regarding the agents of hazards and the impacts. This also includes unawareness of the adjustments available and could have wrong beliefs regarding the affectivity of the adjustments that they have known. The research indicates that adaptive actions get motivated through awareness of risks, ideas of how that could affect any community. This also includes feelings of personal vulnerability to effective outcomes.

Risk perception and communication

From the view-point of the decision maker, the reason behind risk communication is to help the dwellers of the affected communities to make sense of the risk management and assessment processes. This is from various scientifically valid view-points of the likely risks. This also includes the participating to make decisions regarding how the risks are controlled. The communication tools of the risks could be the verbal, written or visual statements consisting of the information regarding risks. There must be specific risk in this context. These must be possibly incorporating the comparisons with the additional risks. This also includes advice regarding behavior of risk reduction and encouraging dialogue between the receiver and sender of the message.

During the time of non-crisis, the ineffective risk communication results in low-impact, wasted resources and the other undesirable results. However, during the crisis messages get lost in the noise. Thus unintended results, rejection of messages and public confusion or fear takes place. While deployed effectively, the risk communication is invaluable technique for the engendering trust. Thus it helps in safeguarding the organizational value and helps public to undertake informed decisions.

As per as the profitable organizations are concerned, the risk communication skills and plans get benefitted through assuring that the potential customers, customers and public members have the information they require to evaluate health effects of the operations and products effectively. Keeping public aware of the potential risks, corporations reduce danger to the consumers and protect themselves from the reputational harms. This stems from human or the environmental damage. As public turns out to be more educated, they can take more informed decisions regarding the health and well be.

The various skills and plans needed risk communication are highlighted below.

The finding of the societal and psychological determinants of risk communications via a scientific and systematic overview of the literature of risk communication.
The strategic communication of the risk information including the designing of messaging, audience segmentation and performing the risk communications.
Determination of the formats of message construction of risks, including the narratives, fear and exemplars.
The recognition of statistical principles for understanding the way in which the risk information gets developed.
The behavioral economies and the role in communicating the risks.
Evaluating the effect of risk communication introducing the significant methods like the focus groups, nominal group surveys, techniques and experiments.

Conclusion:

The risk is identified in the above report as probability of various harmful consequences of the blasts that took place in Tianjin port city, China. This included the causalities, lost livelihoods, damage to the environment, disrupted economic activity and damaged property. The above comprehensive risk analysis has evaluated the likelihood and magnitude of possible losses. The study has also provided complete understanding of the reasons and effect of the injuries. Apart from estimating potential losses and the result, the risk analysis has allowed the determining of acceptable risk levels. This also included the finding of the level of damages suitable without demolishing lives, plans of disaster reduction, revised strategies and so on. As the existing and the acceptable risk levels are found out, the ideas for disaster risk reduction and the procedures are developed and revised. Hence they possess measurable goals to reduce the present risks to various acceptable levels. To counter the current disaster risks in a systematic manner, land use plans or set in place the mechanisms of insurance mechanisms are fundamental. Lastly, as programs get implemented the regular evaluation of the risk supplies explicit indication of the development in reduction of risks. Thus they are helpful to assess the affectivity of efforts of disaster risk reduction and making required changes to different strategies and plans.

Strategies for safeguarding businesses

References:

Almeida, N. M., Sousa, V., Dias, L. A., & Branco, F. (2015). Engineering risk management in performance-based building environments. Journal of Civil Engineering and Management, 21(2), 218-230.

Bahr, N. J. (2014). System safety engineering and risk assessment: a practical approach. CRC Press.

Bowers, J., & Khorakian, A. (2014). Integrating risk management in the innovation project. European Journal of innovation management, 17(1), 25-40.

Bromiley, P., McShane, M., Nair, A., & Rustambekov, E. (2015). Enterprise risk management: Review, critique, and research directions. Long range planning, 48(4), 265-276.

Carvalho, M. M. D., & Rabechini Junior, R. (2015). Impact of risk management on project performance: the importance of soft skills. International Journal of Production Research, 53(2), 321-340.

Explosions death toll rises in China as safety fears revealed. (2017). ABC News. Retrieved 1 December 2017, from https://www.abc.net.au/news/2015-08-13/tianjin-explosion-44-killed-safety-officials-met-week-earlier/6696260

Glendon, A. I., Clarke, S., & McKenna, E. (2016). Human safety and risk management. Crc Press.

Haimes, Y. Y. (2015). Risk modeling, assessment, and management. John Wiley & Sons.

Hopkin, P. (2017). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.

Islam, S., Mouratidis, H., & Weippl, E. R. (2014). An empirical study on the implementation and evaluation of a goal-driven software development risk management model. Information and Software Technology, 56(2), 117-133.

Lam, J. (2014). Enterprise risk management: from incentives to controls. John Wiley & Sons.

Massive blasts hit north China city. (2017). BBC News. Retrieved 1 December 2017, from https://www.bbc.com/news/world-asia-china-33896292

Massive warehouse explosion rocks Tianjin, China. (2017). NewsComAu. Retrieved 1 December 2017, from https://www.news.com.au/world/asia/massive-warehouse-explosion-rocks-tianjin-china/news-story/494790aae9c3500f8146a3d938357d9e

Mazaheri, A., Montewka, J., & Kujala, P. (2014). Modeling the risk of ship grounding—a literature review from a risk management perspective. WMU journal of maritime affairs, 13(2), 269-297.

Modarres, M., Kaminskiy, M. P., & Krivtsov, V. (2016). Reliability engineering and risk analysis: a practical guide. CRC press.

Munier, N. (2016). Risk management for engineering projects. Springer International Pu.

Nicholas, J. M., & Steyn, H. (2017). Project management for engineering, business and technology. Taylor & Francis.

Park, J., Seager, T. P., Rao, P. S. C., Convertino, M., & Linkov, I. (2013). Integrating risk and resilience approaches to catastrophe management in engineering systems. Risk Analysis, 33(3), 356-367.

Pritchard, C. L., & PMP, P. R. (2014). Risk management: concepts and guidance. CRC Press.

Sadgrove, K. (2016). The complete guide to business risk management. Routledge.

Stockton, N., Ellis, E., Palmer, K., Zhang, S., Zhang, S., Zhang, S., & Palmer, K. (2017). What China’s Huge Tianjin Explosion Looked Like From Space. WIRED. Retrieved 1 December 2017, from https://www.wired.com/2015/08/chinas-huge-tianjin-explosion-looked-like-space/

Wolke, T. (2017). Risk Management. Walter de Gruyter GmbH & Co KG.

Wu, D. D., Chen, S. H., & Olson, D. L. (2014). Business intelligence in risk management: Some recent progresses. Information Sciences, 256, 1-7.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2019). Risk Management Strategies And Tools For Business Essay.. Retrieved from https://myassignmenthelp.com/free-samples/project-management-for-engineering-risk.

"Risk Management Strategies And Tools For Business Essay.." My Assignment Help, 2019, https://myassignmenthelp.com/free-samples/project-management-for-engineering-risk.

My Assignment Help (2019) Risk Management Strategies And Tools For Business Essay. [Online]. Available from: https://myassignmenthelp.com/free-samples/project-management-for-engineering-risk
[Accessed 18 December 2024].

My Assignment Help. 'Risk Management Strategies And Tools For Business Essay.' (My Assignment Help, 2019) <https://myassignmenthelp.com/free-samples/project-management-for-engineering-risk> accessed 18 December 2024.

My Assignment Help. Risk Management Strategies And Tools For Business Essay. [Internet]. My Assignment Help. 2019 [cited 18 December 2024]. Available from: https://myassignmenthelp.com/free-samples/project-management-for-engineering-risk.