Risk
Management Basis
Risk Management is the
basic approach of the Integrated Management Systems
organisation.
All businesses face risks every day. These risks can
be managed and turned into opportunities or they could be
a real threat to your business's success. Risk management
is the practice of using processes, methods and tools for
managing these risks. Risk is defined as the probability
of an event and its consequences. For a business, this
could be anything from litigation by an employee over
safe working conditions, over-reliance on a single
customer to failure in the marketplace due to poor
quality.
Risk management is clearly related to quality management, so you can increase your
business' chances of success by having effective
management systems in place.
Identifying hazards, risks and potential incidents before
they occur frequently allows you to avoid the problem
altogether, and at least be prepared for the event with
cost efficient solutions, rather than hurriedly trying to
solve the problem after it arises.
Of
course most compliance systems, e.g. safety and
environmental, require systematic identification of
hazards and ranking of risks and development of
defensible control strategies as their central focus.
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The Risk Management process involves:-
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Identifying these risks.
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Assess likelihood, severity and risk rating of an event.
<> Identifying which events would cause the most
critical problems and developing control strategies for
them first.
<> Understanding how to prevent these events.
<> Understanding how to respond to events if they
do occur.
<> Monitoring the effectiveness of your risk
management approaches and controls.
A
review of business risk, however, should be seen in the
overall context of the purpose of the business and how the business
actually works. |
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