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Internal entities therefore bear the burden of the company's interest, making the risk identification process subjective, and compromising it to the eventual disadvantage of the company. Here also it is advisable that entities from the outside be involved in the process.
The risk quantification process refers to assessing the scale of severity in the risks identified. When a risk is identified, resources need to be allocated in order to mitigate it. Severe risks will therefore require a greater amount of resources, while lower severity also means lower priority. Quantification therefore results in prioritizing. This is a process that can then mitigate the financial resources necessary for preventing the risk factors involved.
In the quantification process, however, ambiguity and subjectivity are also detrimental factors. Ambiguity for example means that there is uncertainty regarding which priority to assign to which levels of risk. Once again, subjectivity...
Internal risk teams for example may be in disagreement regarding the severity of certain risks because of subjective opinion. Such opinion may for example be driven by the company departments within which the members of the risk assessment team works. Each worker may then feel that the risks within their specific department should carry a greater priority than the other possible risks.
In order to mitigate the factors of ambiguity and subjectivity in the risk assessment process, it is therefore advisable to work with external teams. The reason for this is that workers within a company often operate subjectively rather than objectively, because of their personal experience within the company. Personal experiences with risks necessarily influences the perception of a person regarding these risks.
In order to be effective, all risk assessment strategies should therefore be carried out in as objective and unambiguous a manner as possible.
All personnel need to be fully informed regarding risk management, particularly in terms of disaster, terrorism, or other unknown factors. Employees and employers therefore need to maintain an open communication system, through which risk management occurs as a dynamic rather than static system. Management should for example provide workers with the opportunity to offer suggestions relating to the current risk management manual. These can be communicated via spoken or
Advisers for example survey the market and make recommendations to their customers on the strength of such estimations. Such investments carry a high level unknown risks, depending upon the type of investment a customer prefers to make. Some customers prefer higher risks for higher returns, while others are more careful with their investments. In such a company, risk quantification and creation play a more important role than risk prevention. Diversifying
When the risk is significant, this should be quantified against the risk of not entering the specific country in terms of expansion. When the risk is acceptable, stringent measures, including organizational arrangements, engineering control, and research and development, need to be taken. Research and development are particularly important, as mitigation measures can then be implemented that are particularly targeted towards the measure of possible terrorist attack for the country
When new employees are appointed, for example, they should be observed thoroughly during the first months of work in order to assess their stability and stress levels. A reporting system could also be implemented, by which workers are encouraged to consult management regarding their own or a co-worker's stress levels and concomitant work performance. It is important to ensure that none of these measures be perceived as unfair. In terms
When combining the two, future market trends can be more accurately predicted by basic it upon existing trends. In this way, the risk factors associated with both areas of R&D are significantly reduced. The most prominent risks associated with R&D, as identified above, include market research and competition. In addition to risks associated with market trends, risks posed by competitors can also be mitigated with a combination of strategies. The
A lack of foresight and initial risk assessment therefore resulted in the losses suffered by the company. In the area of maintenance and risk assessment, a lack of regular spillage inspection resulted in financial, legal and environmental risks for an oil company. The oil rig was not inspected on a regular basis, which resulted in a lack of regular maintenance. Hence the damage to one of the oil containers was