Planning Of Risk Mitigation Samples for Students †MyAssignmenthelp.co

Question: Discuss about the Planning Of Risk Mitigation. Answer: Introduction Risk mitigation planning refers to the method of establishing or developing choices and prevention tasks in order to increase the chances of profit in an investment and minimize the chances of risks involved in that particular investment. The planning of risk mitigation generally refers to the process of taking actions against minimizing the chances of risks, investigating and finding out the new risks that might have developed in the recent past and tracking down and monitoring the already existing risks in the organization. An organization undertaking risks has to undertake risk mitigation planning as well. A successful risk mitigation planning essentially involves a number of procedures or methods to be followed. They are Risk Identification, Risk Impact Assessment, Risk Prioritization Policy and Implementation of Risk Mitigation Planning and continuous monitoring and evaluation of the entire implemented process. Risk Identification The identification of risk involved in a particular project is first and foremost the most important aspect of risk mitigation planning. The planning of risk mitigation is based majorly upon the risk identification phenomenon. This is because if the risks including the ones that have generated now or will generate in the recent past are not identified properly then the planning regarding the risk involved will not be proper as a result of which the mitigation process will not be a success. The most difficult task to be completed in this process is regarding the identification of the major risks that if missed will lead to delay in obtaining the returns from a particular investment project or may lead to reduced returns from the project. It may also hamper the health of the project thus leading to reduced returns. This can be avoided by the process of putting the risks into different categories such as project risks, business risks, infrastructure risks and corporate risks. Further classification can also be done in the category of economy, political, human or environmental risks. A successful risk identification process involves open communication and free interaction between the different members of tllowed to he organization so that the different risks involved are identified accurately. The procedure of risk identification can only be effective when all the members of the particular organization are participating and putting forward their valuable inputs about risk identification. Risk identification process should be carried out within regular intervals of time. There are two possible approaches towards risk identification. Firstly the approach should be such that the possible risks should be chalked out at first and then possible strategies should be undertaken in order to mitigate those risks. The second approach might be such that the particular investment project is allowed to run on its own and the goals to be achieved by the project are listed down. Now the risks are identified in the path of achieving the targets and then the risks are mitigated as the case may be. Risk Impact Assessment The risk impact assessment is a salient feature of every risk mitigation plan. A project that involves risk always implies two probabilities which are that either the risk assumed will be averted or the project will result in loss as the risk assumed will become real. Therefore the role of assessing the impact of a particular risk becomes very important. The risk involved in a certain project might be assessed in such a way so as to identify the level of risk involved as high, low or medium. As the work becomes more and more complex the extent of risk involved also increases. While assessing the impact of a certain identified risk the probability or frequency as to how many times it may occur in a single financial year has to be identified. Secondly the consequence of the risk has to be anticipated beforehand in order to plan the mitigation in advance. A well known solution for calculating the level of risk is probability of the occurrence of risk multiplied by the consequence of that particular risk. The risk involved in the project can be categorized as high, low, medium and very high. The level of risk is directly proportional to the measures taken to control it. Once the risks assessment is done, the risks should be prioritized on the basis of their immediate impact. For an instance a particular risk identified and assessed if requires immediate catering to then it should be kept on the top priority of the list and should be monitored immediately[1]. Risk Prioritization Policy The risk prioritization policy is such that the management has to give a thorough thought as to how to prioritize the risks and exactly upon what basis will the risks be catered to so as to plan the framework for mitigation. Now each and every project undertaken by a company has a certain unknown zone where the probability of an event to occur can never be judged. This area of uncertainty is present in each and every project and higher the uncertainty, higher is the power of a certain project to hamper or jeopardize the process of mitigating risks. Thus it is the prime duty of the risk assessment manager to assess the extent of uncertainty involved in each and every project and accordingly determine exactly which risk will affect the process of mitigation more. Moreover the manager should analyze and integrate the each impact or uncertainty of a risk which will help him to think in a more dynamic way. This makes the risk prioritization process much easy to conduct and much more accur ate in nature. Essentially when the risk assessment manager realizes that the level of risk involved in a certain project has reached the maximum potential and is likely to impact the mitigation greatly then the risk is adhered to by the management of the company with immediate effect. Implementation of Risk Mitigation Planning The implementation of risk mitigation is done essentially to help the management to make sure the exact nature of planning and other requirements of business that would be needed in the future. Risk mitigation is also done in order to develop a cycle of coordination between the management and the other stakeholders. The mitigation planning is done following certain principles which are that the planning should be clear, concise, to the point, effective and with clarity. This is because the mitigation plan does not only affect the members of the organization but also the indirect third party stakeholders and other units that are related to the course of business in one or the other way. Therefore the mitigation plan should be such that all these members get a clear picture of the mitigation and work accordingly. The risk mitigation plan should essentially constitute of the methods that are desired to be implemented by the management with immediate effect. For an instance a particular risk that falls under the category of environmental risk might be mitigated with proper planning like the infrastructure of the company should be developed in such a way so as to remove or minimize the wastes that are to be emitted thus reducing the risk of environmental degradation by a certain company. Further the particular material that is posing to be much risky for undertaking the project might also be substituted with any other product that does not have such hazardous effect on the environment. A risk mitigation plan is the last step in the process of a risk control method. This is because it is the most important step in all of the procedure. Mitigation is implemented by the management with enough feedback from all the members of the organization. A proper and accurate mitigation plan though does not assure complete removal of risk but does ensure minimization of risk and help the management to obtain the projected returns from business without the fear of assuming risk [2]. Conclusion Thus the planning of risk mitigation involves a number of steps which if done correctly will result in the proper barricading of risks. An accurate risk mitigation plan not only helps the particular organization to defer risks but also contribute in increasing the revenues of the firm as well. References Knechel WR, Salterio SE. Auditing: Assurance and risk. Taylor Francis; 2016 Oct 4. Asenova D, Bailey SJ, McCAnn C. Public sector risk managers and spending cuts: mitigating risks. Journal of Risk Research. 2015 May 28;18(5):552-65.