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Impact of Risk On Organization

The document discusses how taking a proactive approach to risk management can make operations more efficient, processes more effective, and strategy more impactful. It also examines different types of risks like hazard risks that can undermine objectives, and uncertainty which refers to unknown outcomes. Finally, it outlines categories of disruption from hazard risks, attitudes toward risk, and how organizations can manage risks, uncertainties, and opportunities.

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Chanthouen Pich
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96 views19 pages

Impact of Risk On Organization

The document discusses how taking a proactive approach to risk management can make operations more efficient, processes more effective, and strategy more impactful. It also examines different types of risks like hazard risks that can undermine objectives, and uncertainty which refers to unknown outcomes. Finally, it outlines categories of disruption from hazard risks, attitudes toward risk, and how organizations can manage risks, uncertainties, and opportunities.

Uploaded by

Chanthouen Pich
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

2.

Impact of Risk on
Organization
Risk importance
• By taking a proactive approach to risk and risk management,
• Operations will become more efficient
• Processes will be more effective
• Strategy will be more efficacious
• Be precautious and ready for the risk, then you will not be panic and
the risk will be uncontrolled.
Impact of hazard risks
• Hazard risks is a pure risk which undermine objectives or bring
negative outcome.
• Hazard risks are related to business dependencies, including IT and
other supporting services.
Attachment of
risks

- objectives-driven’ approach
Risk and reward
Start-up operation
It doesn’t mean
whenever you invest in
high risk sector and then
you get high return.
- No matter what, great
effort and focus of risk
management are
required to the high
return, plus a high-risk
strategy to adopt
adopted in anticipation
of
significant rewards.
Risk and Uncertainty
Risk
• A risk is an unplanned event that may affect one or some of your
project objectives if it occurs. The risk is positive if it affects your
project positively, and it is negative if it affects the project negatively.
Uncertainty
• Uncertainty is a lack of complete certainty. In uncertainty, the
outcome of any event is entirely unknown, and it cannot be measured
or guessed; you don’t have any background information on the event.
Attitudes to risk
• Two attitude to risk
• The term risk-averse describes the investor who chooses the preservation of
capital over the potential for a higher-than-average return.
• Risk aggressive refers to attempts to maximize returns by taking a relatively
higher degree of risk.
3. Type of Risk
Categories of Disruption by Hazard Risk
Hazard tolerance
• Organizations need to
tolerate a hazard risk
exposure, accept
exposure to control risks
and invest in opportunity
risks.
Management of hazard risks
• Reducing the likelihood and magnitude/impact of hazard losses.
• Purchasing insurance basing on the level of risk
Uncertainty acceptance
• Uncertainty or control risks are an inevitable part of undertaking a
project.
• Contingency Fund or plan
• the organization must make necessary resources available to identify the
controls, implement the controls and respond to the onsequences of any
control risk materializing.
• There are dangers if the organization becomes too concerned with
control management.
Jaideep Arora is Chief
Executive Officer
at Sharekhan Ltd.
Opportunity investment
• Opportunity risks can be referred to as commercial, speculative or
business risks.
• Opportunity risks are the type of risk with potential to enhance
(although they can also inhibit) the achievement of the mission of the
organization.
• These risks are the ones associated with taking advantage of business
opportunities.
4 Development of risk management

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