Module 1. Risk Management Flashcards
process of identifying, assesing and controlling threats to an organization’s capital and earnings.
Risk Management
Examples of risks
- Uncertainty in financial markets
- threats from project failtures
- credit risk
- accidents
- natural causes and disasters
- deliberate attack from an adversary
- uncertain events
- unpredictable root cause
Two types of events
(1) Negative events (risk)
(2) Positive events (opporunities)
Characaterisitcs of risk
(1) Probability
(2) Impact
(3) Source
(4) Backfire date
describes the likelihood that an event (risk) will happen.
Risk probability
steps you can take to minimize the probability of certain risk events
(1) Planning ahead
(2) Accurately forecasting resources
(3) Assembling an experienced project team
(4) Analyze each specific risk using risk analysis tools
refers to the possible outcomes or consequences of a risk event.
Risk impact
Project risks can come from all directions, so it’s helpful to assign a tangible source to every single one. Keep in mind that multiple risks can originate from a single source.
Source
represents the day when the consequences of a risk event become unavoidable. In other words, it’s the date when a potential risk turns into a guaranteed issue.
Backfire date
How can we mitigate the risks?
- assessing and evaluation
- anticipating
- preparing
- strategies/intervention
How can we assess and evaluate risks?
Identify potential risks, assess their likelihood and potential consequences and prioritize them based on severity.
How can we anticipate risk?
Forecast potential risks and develop contingency plans to address them proactively.
How can we prepare for potential risks?
Implement measures to reduce the likelihood of risks occuring and mitigate their impact if they do
Risk Remedies/strategies
(1) Risk avoidance
(2) Risk retention
(3) Risk reduction
(4) Risk transfer
completely avoiding or eliminating the risk
risk avoidance
