Provisioning in Credit Risk Management
The primary purpose of credit risk management is to avoid credit losses i.e. credit events that negatively impact the cash flow of the lender. However, since managing credit risks is not a perfect science, there is always a possibility that all credit risks will not be avoided. Some of these risks will actually materialize and […]
Relationship between Volatility and Risk
Market risk and volatility are two terms that are heard a lot by many risk management professionals. To the layman, the terms may sound like synonyms. This means that the average person tends to think that volatility and risk mean the same thing. However, this is not true. The terms are related and have a […]
Introduction to Leadership Development
Leadership development entails nurturing, encouraging, incubating, and mentoring prospective leaders. In many organizations, the HR department in conjunction with senior management identifies potential leaders or fast trackers who are capable and ensures that they are motivated and encouraged to give their best. This form of mentoring and coaching of future leaders happens through organizational commitment […]
Role of Management in Inculcating Workplace Ethics
Management plays an essential role in inculcating workplace ethics in employees. Bosses need to set an example for their subordinates. You need to come on time if you expect your team members to reach office on time. Management needs to act as a source of inspiration for the employees. It is generally observed that team […]
Functioning of Human Memory
The study of human memory since ages has been a topic of interest for the school of cognitive psychology. Human memories of all individuals can never be same. Human memory refers to a process of acquisition, storage, retention and retrieval of information. Human memory has the ability to store and recall the previously learnt information, […]
Any project immaterial of the size of the same carries a lot of risks, which may be financial, non-financial, legal or physical.
Having an effective risk management plan is first and foremost to the success of any project. The task is to anticipate these risks well in advance before the project takes off.
A good risk management plan carries number of tools and strategies to mitigate risk. The strategy may be to avoid risk or transfer a component of it another project so that the impact is reduced.
Other risk management strategies may suggest the acceptance of the risk. This is decided after a thorough cost/benefit analysis. The risk management plan also depends on how the risks are prioritized by the organization.
Based on relative priorities risks are given weightage, for example a certain organization may be more concerned about the physical and legal risks, whereas another organization may be focusing on operational or strategic risks.
Risk priority defines the strategy and finally the plan.
Besides keeping the risk management cycle in mind; before the final draft, an effective risk management plan may traverse through following:
Enlist the categories of the project and then evaluate each for risks. For example there may be a cost category; determine the factors that may increase cost and make a list.
The formulation of the plan is in tandem with the risk management cycle which acts as the basic guideline. Both work in sync, in fact the interventions in step 3 discussed above cannot be without a thorough understanding of the cycle.
Your email address will not be published. Required fields are marked *
