RISK MANAGEMENT

• Risk Management refers to the practice of identifying potential risk

in advance, analyzing them, and taking precautionary steps to
reduce the risk.
• It includes also processes of risk management planning,
evaluation, and prioritization of risks followed by coordinated and
economical application of resources to minimize, monitor, and
control the probabilityor impact of unfortunate events or to
maximize the realization of opportunities.
RISK MANAGEMENT GOALS AND
OBJECTIVES
• Develop a common understanding of risk across multiple
functions and business units so we can manage risk cost-
effectively on an enterprise-wide basis.
• Achieve a better understanding of risk for competitive
advantage.
• Build safeguards against earning-relates surprises.
• Build and improve capabilities to respond effectively to low
probability, critical, catastrophic risks.
• Achieve cost savings through better management of internal
resources.
• Allocate capital more efficiently.
PURPOSE OF RISK MANAGEMENT
PLAN
• The risk management plan provides resources and tools in the
implementation of an effective risk management program to
minimize the cost of risk. It defines effective risk management
processes. It provides an overview method that will be use to
manage and control those events that could have a negative
impact on Establishing "SANDY SHORE".

STEPS in Risk Management Process

• Risk Identification
• Risk Assessment
• Risk Analysis Matrix
RISK IDENTIFICATION
• Risk identification involves identifying and classifying sources of
risk to realize what must be managed in a project.
• It is the first step in Risk Management Process, as the potential
problems must be identified before assessment, respond, and
control of the risk can take place.
Steps in Risk Identification process:
• Creating a systematic process
• Gathering informarion from various resources
• Applying risk identification tools and techniques
• Documenting the risks
• Documenting the risk identification process
• Assessing the process' effectiveness
In a business several type of risk may occur that will affect
the operation of the business. And the risk that we may
encounter can be classified into four kinds:
• Financial risk
• Technical risk
• Management risk
• Market risk
FINANCIAL RISK
• Financial risk is a type of specific risk that encompasses
the many types of risks related to a business capital
structure, financing, and the finance industry. These
include risks involving financial transactions, such as
business loans and exposure to loan default.
• One of the most popular ways to manage financial risk
is through the purchase and use of insurance. Insurance
protects its policyholders from large and unexpected
financial losses, by compensating them, per their
contractual obligation. This type of risk management is
often referred as risk transfer.
TECHNICAL RISK
• Technical risk is simply the risk associated directly
with the knowledge base being informed and its
technical aspectsincluding such things as
understanding, reproducibility, and the like.
• It is the possible impact changes could have on a
project, system, or entire infrastracture when an
implementationdoes not work as anticipated.
• Also it is exposure to loss arising from activities such
as design and engineering, manufacturing,
technological processes, and test procedures.
MANAGEMENT RISK
• Management risk is the risk financial, ethnical or
otherwise associated with ineffective, destructive
or underperforming management.
• The risk associated with decisions made by
company managers in relation to the overall
interest of shareholders and the company at large.
In many cases poor decisions or decisions made by
management for the benefit of the management
result in the destruction of shareholder's wealth.
MARKET RISK
• Market risk is the possibility of an investor
experiencing losses due to factors that affect the
overall performance of the financial markets in
which he or she is involved.
MANAGEMENT RISK
• Staff is not professionaly competent
• Employee insubordination
• Difficulty in filling vacant position
• Lack of security
MARKET RISK
• Making poor marketing strategy choice
• Promotion error leads to over redemption
• Managers and staff bad behavior
• Target market and location
TECHNICAL RISK
• Electrical Hazards
• Poor internet connection that may lead to a poor
communication
• Lack of safety equipment
• Poor facility and dirty shower and comfort rooms
FINANCIAL RISK
• Over Pricing
• The business is not insured
• Lack of financial or budget shortage
• Excessive debt
RISK ASSESSMENT
• Risk assessment is the act of determining the
probability that a risk will occur and the impact that
event would have, should it occur. This is basically
the "cause and effect" analysis. The cause is the
event that might occur, while the effect is the
potential impact to a project, should the event
occur.