Risk Management Plan
Risk management involves identifying risks and finding the best possible solution to mitigate the impact of the risk. Spotting risks is a creative and disciplined process. A risk management plan acts as a guide on the organization when handling perils.
When coming up with a risk management plan identifying the potential risks is an essential aspect. It is a difficult task as all vital players, the workers, management, competitors, and consumers’ opinions have to be taken under consideration. Therefore, the risk management team has to source information on potential risks from the best possible sources. When assessing risks, the organization takes into account its probability, impact, and persistence. Some risks have a low likelihood of occurrence, and they resolve quickly; thus, they are of a low priority. After the identification of the risk, planning for control occurs. The plan can be preventive or a contingency depending on each risk. It is always better to prevent risks, although that is not always applicable. Lastly monitoring and evaluating whether the plan works is essential. Monitoring makes room for improvement especially since risks do change in nature.
Concepts Identified and their Importance
The risk management plan identified a number of concepts that push further the need and uses of managing risks to an organization. Taking into account the human factor is the first concept the plan encompasses. Majority of the organizations operate for profit purposes hence their risk assessment methods are more considerate on the effect of a peril on the shareholders and the profit margins. That ought not to be the case as human resources are essential to all organizations. The risk of recession can lead to high retrenchment if the risk management team does not account for this peril then the employees are demotivated which in turn leads to high turn overs.
The second concept is implementing a strong risk management culture. Having such a culture is a way to ensure that strategies put in place become effective. Technology is both a blessing and a curse to organizations; any form of technology is at a risk of getting breeched. For businesses that make decisions on the technology used and the security measure taken based on risk analysis have a high chance of survival and adaptability. Another concept identified in the plan is the need to monitor continuously the RMP while making to it. Constant development of the risk management field and its impact on organizations makes it necessary to monitor the plans progress and eliminating weaknesses. It works like all other corporate governing bodies in a business for that reason it has to be blended to the organizations management system. The forth concept is that the identification of risks has to come from credible and reliable sources. Planning for the mitigation of risks is a costly affair hence, it is essential to have the best sources with compelling evidence.
Having concepts is vital as they guide the team into making a sustainable plan. For the plan to work human resource needs have to be taken into account, also information used when conducting research has to come from credible sources. RPM is an intriguing process but the most interesting part of it is the identification of risks and their possible triggers. Most organizations face the risk of cyber-attacks. However, the probability, impact and the trigger of event occurrence varies with the individual organization. Although factors such as competitors, the economy, interest rates or the political mood still have an impact on the probability and impact. If the political tensions are high then some organizations affiliated to a certain political group are at a high risk of cyber-attacks.
Risk causes a lot of uncertainties for all organizations. Therefore, businesses have to focus on finding ways to deal with the risks. Having the knowledge on what potential risks the organization may face gives it an advantage on what solutions to undertake.