RISK MANAGEMENT ( ISO 31000 )

RISK MANAGEMENT ( ISO 31000 ):

ISO 31000

What Is The Risk?

The risks cannot be estimated previously. The risks have uncertainty which are coming negative or positive outcomes. At the same time the risk also means threats which is negative consequences. The risks can change of depends on time, situation, and place.

The risks are uncertainy effect on the objectives. These effects can be a negative or positive. The goals of risks has different subject (for example; finance, health and security, enviromental goals) and apply different levels (for example; strategy, production, project).

There are a huge difference between risk management and managing risk. Risk management is to manage risks effectively, i.e. to manage goals and objectives (for example; principle, frame, process). Managing risk means that to apply this structure to specific risks.  

What Is The Risk Management and How?

All company’s organization process include the risks. In order to manage to the risks, first, organizations determine all the risks, then analyze them. After then, In order to provide criteria for risks, companies analyze whether risks can change risks with risk improvements. Throughout this process, organizations communicate with their stakeholders and monitor and review the controls that change the risks until they are sure that more risk is needed. Risk management can apply in many areas and levels, at anytime, to all organizations, projects and processes. When this standard applies to all organizations, it provides a comprehensive framework for the companies. When risk management applies to all processes effectively, to ensure efficient and consistent management and the right data will come to us. According to ISO 31000 general approach, it provides appropriate guidelines and guidelines in order to be systematic, in a transparent, secure scope, manage with related contexts for the risks. ISO 31000 standard’s steps explained sistematically in details. This standard recommends in order to integrate a frame developing and determining, and a continuous improvement. In general, ISO 31000 provides detailed instructions to plan, implement, measure and learn the properties of a risk management system, but to provide less explicit information about the context, leadership and support features required by the management system standard.

The organizations should apply the PDCA cycle to manage the risks. Top management should provide all necessary resources, determine all related processes and activities within the scope,and authority and responsibilities that they define risk attitudes and that’s mention within policies and goals. All in should includes authority and commitment and it standardize too ( Assessing Risk - Concluding - Maintaining - Taking The Risk - Avoiding Risk ). In additional, The organizations report them to all related stakeholders.

After defining responsible and authorized person or department to manage, the management process starts. The risk management process includes Internal And External Scope , Communication and Consultation, Stakeholders, Risk Management, Defining Risk, Risk Source, Situaiton, Result, Possibility, Risk Profile, Risk Assesment, Criteria of Risks, Levels of Risks, Repeat Risk Assessment Risk Improvement, Control of Risk, Residual Risk, Tracing, and Revision.

The organization’s risks are increasing day by day. Risk management should use to gain competitive advantage. Thanks to advanced risk management is that the top management and committee provide a better understanding of how an open risk assessment can positively influence strategy selection. Integrating risk management into existing management activities will ensure that risk information is a part of the management information used by managers and board members. This is only to create a list of the risk management and manage risk but will help overcome the perception which it relates. Some of these risks are related to the management of the organization and others in the market quickly and / or are related to unexpected changes. 

Most organizations need to manage the risks associated with the following:

• Variable cost and availability of raw materials,

• Retirement / Cost of social benefits,

•Increasing the importance of intellectual property (IP),

• More supply chain and joint venture addiction and complexity,

• Increasing regulatory pressures and legal requirements.

Changes in the market can be even more dramatic and include:

• Volatile markets and globalization of customers, suppliers and products,

•  Increased competition in the market and larger customer expectations,

•  Product innovation and rapid changes in product technology,

• Threats to national economies and limited world trade freedom,

• Potential for international organized crime and increased political risks,

• Extreme weather events result in destruction and / or population shift.

Organizations can take the following four areas of improvement by adopting a proactive approach to risk and risk management:

• Strategy, because  with different strategical options, associated risks will anayze and reach more strategical decisions.

• Tactics, because of the choice of risks involved in tactics and available alternatives.

• Operations, because events that may cause disruptions will be identified and actions taken to reduce the likelihood of these events, limit damage and include costs.

• Compliance will be increased as risks related to failure to comply with legal and customer obligations will be recognized.

What Is The Benefits of Risk Management?

1. Foresee difficult future situations,

2. Goals are more easily accessible,

3. Measures are taken before risks arise,

4. Proactive management encourages,

5. Minimizes surprises and losses,

6. Compliance with relevant legal regulations,

7. Increases stakeholders' trust,

8. Help taking fast and efecttive decisions,

9. Provdes saving time,

10. Decreases waste of resources,

11. Risks are kept at acceptable levels,

12. Provides business continuity,

13. Survives PDCA Cycles,

14. Ensures risk identification and handling within the organization,           

15. Provides the determines of risks and opportunities,

16. It provides a reliable basis for decision making and planning,

17. Prevents loss and minimization,

18. Increases consciousness, discipline, education and training within the organization,

19. Provides operational efficiency and increases efficiency.