The role of risk management Essay

Category: Managing,
Published: 16.01.2020 | Words: 1279 | Views: 223
Download now

Summary: This composition is mainly regarding the role of risk management in handling any potential risk to the organisation that may cause a large amount of losses. Management’s mission is always to predict the chance before catastrophe strikes, which in turn require to study all the information and the details given by the risk administration team.

Additionally , what are the mistakes that had been committed in a few of the illustrations mentioned through this essay? and did that they learn from their particular mistakes?. Finally, development of connection must be marketed between risikomanagement sector and top supervision and initiating the role of participation in making the right decision. The financial risk management focus on those risks which can be managed by using some evaluates and estimates, which may be a contributing factor in order to avoid any unexpected accident which may cause a large amount of problems.

Need help writing essays?
Free Essays
For only $5.90/page
Order Now

This essay is focusing on the role of risk management when natural catastrophes occur and exactly how organisations manage these issues to reduce the amount of losses as possible as it can. The process of lowering the amount of failures when a normal disaster is nearly to occure is a very effort to do. Many businesses nowadays consider that risk management is one of the most crucial department that must be existed in a firm because of the job that they can do, is usually to understand and evaluate the efficiency of a company and work effectively to boost the succes by staying away from any potential losses through studing and analysing several factors that can be threaten for the organaisation.

On the other hand, some of the natural disasters occasionally can be and can not be predicted. Hurricanes for instance, could be predicted through the extremely enhancements made on weather wherever winds can be fast and stormy, nevertheless the exact location where hurricanes will take place can not be known. In comparison, earthquake cannot be predected in any way unless whenever we know the key fault lines and the tempreture of it in which any increase in its tempreture for these lines we know that for sure it is going to become an earthquake but it is still very difficult to find out where and once it will happen exactly.

A wide range of potential indicators have been researched, ranging from increase in radon gas concentrations, within electromagnetic activity, foreshoks whistling a large tremble to arrive, wraping or deformation in the earths surface area, geochemical changes in groundwater – and even unusual animal in the moments leading up to a major go pitapat. (McKenna 2011) However , the job of risikomanagement is to ensure that the top managements are aware and understand the options that are linked to the natural disasters and try to reduce the losses simply by connecting the danger management office directly to the most notable management in which decisions happen to be discussed to make based on research and examination provided by the risk management group. Natural unfortunate occurances is one of these risks which could lead to bad disastrous implications.

However , these types of natural unfortunate occurances can be predicted earlier that it can be going to happen. The clue of predicting these kinds of disasters will come in the knowledge of some character aspects, when it comes to weather level, the way that winds act and some other external elements, but the problems lies upon identifying where disasters will take place. Moreover, these kinds of nature elements might happen but without the disaster actions, so we can say that predecting natural unfortunate occurances is very challenging and cmplicated.

For each of the signals in the above list, we have facts that they may possibly behave erratically leading up to a sizable earthquake. Sadly, these irregularities also occur when zero large go pitapat follows. (McKenna 2011) The best example of detailing what the part of risk management is when a natural tragedy occur, is (Fukushima – Japan). On 11 Mar 2011 an extremely strong earthquake hit The japanese called Fukushima, it was one of many largest earthquakes by magnitued of on the lookout for. 0 and left behind an incredible number of losses provides a result of a disproportionate decision that manufactured by the risk administration crew ( McKenna 2011).

Therefore , The japanese still is affected with the effects of the earthquake and tsunami that struck the north-eastern seacoast in 2011. The disaster triggered a major fault at the Fukushima nuclear service, causing an unexpected crisis threatened the safety with the nuclear strength sector. Depending on that, we are able to say that the secure future of nuclear energy depends on the have to integrate the lessons learned from the Fukushima catastrophe in planning the dangerous operations, plus the development of risk analysis capabilities and increasing the overall performance of risk management.

After Fukushima, the way that risk management evaluating must be changed, and should increase the flexibility from the owners and their ability to act in response, as workers must develop enhanced strategies for risk analysis. Several things went incorrect, a cascade of equipment failures and individual errors that continued up to the 1st moments with the blowout and that are being rigorously explored in the U. S. Our elected representatives, federal research, and civil litigation, but it really began prior to, in the preparing stage. (Houck 2010) The risk management will need to enhance strategies and improve current procedures and tools to help identifing potential risks.

It must increase the range of traditional thinking in the (things happen to be known unknowns) to include (things unknown unknowns) and the valuable thing is always to expand the leaders thinking when assessing risks and vulnerabilities. An additional example of an all natural disaster that caused a big chaos is definitely the Deepwater Intervalle Blowout that took place in the U. S in 2010. There is a law. In fact , there are three laws that, jointly and severally, should have anticipated and provided measures to prevent and cope with the explosion with the drilling machine Deepwater Intervalle.

Instead, we have 11 fatalities, 17 significant injuries, the discharge of an American record 2 . 6 mil gallonsof essential oil, an equivalent record for chemical substance dispersants. (Houck 2010) However , we can say that what happened in Fukushima disaster, as well as what happened from the essential oil spill inside the Gulf of Mexico were generally due to individual errors in terms of decision-making at the incorrect time in an incorrect place. “the evaluation originated from the head of his executive team, who had been later fired for accepting gifts via an petrol company and lying on his ethics form” (Houck 2010). Now we could say that the risk management group must be prepared and triggered effectively and connected right to top managing to enable the communication skill between them, which is likely to deliver all the information and analyzes pending any catastrophe or threat to the Nation or a great institution.

To conclude, we find that risk management sector is one of the most significant sector within an organisation. It can be very helpful for the organisation to get continuing success and try to avoid anything likely could causes loss, if financial or human losses. Nevertheless, conversation skills between your risk management sector and the top management should be developed to make sure that all the information that top management needs is within their hands to make the correct decision about any endanger to the company.

McKenna, L. (2011) ‘Why earthquakes will be hard to predict’, New Scientist mag, available: http://www.newscientist.com/article/dn20243-why-earthquakes-are-hard-to-predict.html#.Ule8znb6jIU [accessed 11 Oct 2013].