Dealing with Risk
- 1. DEALING WITH RISK Furqan Javeed Syed PES1PG21MB405 1
- 2. What is Risk? In every business from the small store to large manufacturer there are common challenges with • Insurance Claims • Risk of fire damage to building • Accidents • Losses due to defective products 2
- 3. In general, a sense of risk in its different forms can help investors to better figure out: • Opportunities. • Trade-offs. • Costs associated with different investments. 3
- 4. In Financial World Risk is Dealt by: Identify Identify the Risk. Evaluate or Analyze Evaluate or Analyze the Risk. Prioritize Prioritize the Risk. Treat Treat the Risk. Monitor Monitor the Risk. 4
- 5. IDENTIFY THE RISK The first step of dealing with risk is to identify the risks that the business will have to face in the region. There are many types of risk: • Legal Risk • Environmental Risk • Market Risk • Regulatory Risk 5
- 6. Analyze the Risk Once the risk has been identified: • Potential problems are known • How likely are the risk to place? • If they take place, what will be the consequences be? As a result: • Where should they focus? • Financial Loss • Time Loss • Severity of impact 6
- 7. Prioritize the Risk: • Helps pinpoint where the team should focus. • Helps identify useful solutions for each risk. • Projects can run efficiently. 7
- 8. Treat the Risk • Every risk can’t be expected. • Previous steps should be taken anyways to deal with risk. • Starting with highest priority first team should focus on either solving or at least reducing the risk. • Effectively treating and modifying the risk also means using your team’s resources properly without hampering the project. 8
- 9. Monitor the Risk Risk need to continuously monitored so to check if risk mitigation plans are working. To be aware if a threat becomes a greater threat. 9
- 10. Approaches to Deal with Risk After the company's exact risks are found and the risk management process has been applied there are several strategies companies can take to treating different risk Risk Avoidance Risk Reduction Risk Sharing Risk Retention 10
- 11. Risk Avoidance • It involves stopping and avoiding any activities that could lead to a risk. 11
- 12. Risk Reduction It is focused on actions that will reduce the probability of a risk occurring or the impact of a risk. This is done by adjusting aspects of an overall project plan or organizational process or by scaling down. 12
- 13. Risk Sharing It is when an organization will transfer or share part of the risk with another organization. Example: is outsourcing manufacturing or customer service functions to a third party. 13
- 14. Risk Retention It occurs when risks have been evaluated. The organization decides to accept the potential risk. No action is taken to decrease the risk. But a contingency plan may still be put in place. 14
- 15. THANK YOU 15