Risk Management Case Study Example | Topics and Well Written Essays - 3500 words

encounter Management - Case news report ExampleRisk pull offment is the practice of managing the resources of the operation in such a way as to maintain an acceptable level of risk. This in turn should generate a corresponding level of give back that will allow the goals of the operation and management to be achieved. The use of time, financial and other resources to effectively manage the risks so that goals can be achieved is the risk management. Risk management comprises of risk assessment and risk control. Assessing Risk is identifying and analyzing risk. Controlling Risk is taking steps to reduce risk, provide contingency, monitor improvements. Risk Management is great for ensuring that a computer project isnt scuppered, preventing accidental loss or disclosure of information, avoiding computer fraud, hacking, ensuring the smooth trail of an information system and maintaining your career prospects.Sources of Risk at that place are five main sources of risk in an operation production risk, marketing risk, financial risk, legal risk and human resource risks. Production risks entangle yield and quality variability. Marketing risks include changes in the price and external conditions. Financial risks include variability in debt, equity capital and ability to meet cash demands. Legal risks include responsibilities for contracts, statutory compliance, civil wrong liability and business structure. Human Resource risks include people management and estate transfer.Types of Risk There are two types of risk that affect the volume of investment. The first is the entrepreneurs or borrowers risk which arises out of doubts in his own mind as to the probability of his actually earning the prospective yield for which he hopes. This is a veritable social live, though susceptible to diminution by averaging as well as by an increase accuracy of foresight. If a man is venturing his own money, this is the only risk which is relevant. But when a system of borrow an d lending exists, which means the ranting of loans with a permissiveness of real or personal security, a mo type of risk is relevant which we may call the lenders risk. This may be due either to clean-living hazard, i.e. voluntary default or other means of escape, possibly lawful, from the fulfillment of the obligation or to the potential insufficiency of the margin of security, i.e. involuntary default due to the disappointment of expectation. This is a pure addition to the cost of investment which would not exist if the borrower and lender was the same person. Moreover, it involves in part a duplication of a proportion of the entrepreneurs risk, which is added twice to the pure rate of interest to give the minimum prospective yield which will induce the investment. For if a venture is a risky one, the borrower will require a wider margin mingled with his expectation of yield and the rate of interest at which he will think it worth his period to borrow whilst the very same rea son will lead the lender to require a wider margin between what he charges and the pure rate of interest in order to induce him to lend (except where the borrower is so strong and wealthy that he is in a position to offer an exceptional margin of security). During a boom the popular estimation of the magnitude of both these risks, both borrowers risk and lenders risk, is apt to become unmistakably and imprudently low.From