Page 20 - RMAI July-September 2018

July - September 2018

organizations will be impacted by hazard risks and so board has decided that there is an opportunity that
the principal focus of risk management in relation to should not be missed. However, the fact that the
the operations will be in hazard management. In opportunity the fact the opportunity is high risk may
order to achieve maximum benefit from risk not have been fully deliberated upon.
management input into operations, organizations Other key factors that will determine the risk attitude
need, however, to direct their attention on loss
of the organization include the stage of the maturity
control.
cycle. For an organization that is at the start- up
Much of the discussion so far is concerned with risk phase, a more aggressive attitude is required than for
management input into operations. It is likely that an organization that is enjoying growth or one that is a
operations will be impacted by hazard risks and so the mature organization in the market place. For any
focus of risk management in relation to operations is professional organization, good professional
on hazard management in relation to operations is on knowledge and skill and good marketing skills
hazard management. enhance theirfame and prestige and go long in their

I order to achieve the maximum benefit from risk practice.
management input into operations, organizations BENEFITS OF RISK MANAGEMENT
need instead, however, to focus on loss control. Loss
The overall benefits of risk management can be
control is a combination of loss prevention, damage
summarized in a number of ways. By undertaking a
limitation and cost containment.
risk management initiative less disruption to
Projects should be completed on time to budget and operations, successful delivery of contracted works
to specification. Inevitably, they will be a considerable and projects and better strategies and better strategic
amount of uncertainty associated with all works decisions are the expectations. Also underpinning risk
including projects. The contribution of risk management initiatives will be the desideratum for
management is to minimize these uncertainties. adequate risk assurance. These considerations as in
Management of risks within the budget allocations is the manufacturing sector where the products must
a style of control management. be of a certain size and quality and within acceptable
There is no single all-embracing definition of risk. limits will be the guiding force.
Different organizations would have different attitude CONCLUSION
to risk based what on occupation or calling or work As with any management initiative that becomes
they are engaged in. For example, a locomotive driver embedded within the way the organizations operate,
runs the risk of not only running the train on time but a successful risk management initiative is bound to
he has also faces the risk of constantly being exposed develop and become more sophisticated.
high temperature caused by the engine's heat. A bus Developments in the discipline of risk management,
driver has to be ever alert while piloting the bus that especially during the past 15 years have been
he his piloting. Airline pilots have to be ever alert dramatic. Also, the level to which risk management
while flying the airplane.Economists, Behavior requirements have become embedded within
Scientists, risk theorists, lawyers, statisticians, corporate governance and governance in local bodies
actuaries, physicians, surgeons, radiologists and have been extensive.
many others each have their own concept of risk
Risk management is not a complex exercise and
based on their profession. And the professional
neither do we need heavy investment. It can be
advice they give. Based on this concept, risk is defined
tailored to meet the needs of the organization in the
as uncertainty concerning the occurrence of a loss or
early stages and modified as the level of sophistication
damage.
increases. It is a systematic and pro-active approach to
Risks cannot be considered outside the context that manage risk. It allows the organization to focus on
gave cause of action to the risks. It may appear that an what is complex and important to control versus as
organization is being risk aggressive, when in fact the what is easy to control.

RISK MANAGEMENT ASSOCIATION OF INDIA 19