Risk management

The risk management is the process through which we try to manage the uncertainty that surrounds the Achieving objectives corporate. Un risk It is an uncertain event that may have consequences on the objectives, and the purpose of this process is to ensure the achievement of the objectives themselves and to control the associated risks.

The Risk Management is essential for a complete assessment of the organization and for the definition of effective strategies. In Short term, the risk management provides transparency inside and outside the organization, creating awareness of possible unexpected developments. In Long term, risk management translates into better efficiency, in a more predictable performance and in lower financing costs.

Each risk is qualitatively and quantitatively measurable in terms of Probability of occurrence And say impact on the outcome of the project.

The composition of probability (P) and impact (I) makes it possible to identify the Risk Factor which indicates the position of relevance in a risk classification grid.

They exist 4 strategies to respond to risks:
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1. Avoid: consists of taking measures to completely eliminate exposure to potential risks through the abandonment of risky initiatives (e.g. withdrawal from markets, geographical areas or business activities that are considered dangerous or too uncertain), the prohibition of undertaking operations that present unacceptable risks from the point of view of related risks, the concentration of resources in activities with low levels of risk;
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2. share: consists of distributing exposure to risk among several parties, thus reducing the potential impact on a single entity through insurance or re-insurance of risks with independent entities, the physical or financial coverage of certain risks, the search for a risk-sharing partner (e.g.: Joint Venture) or the outsourcing of certain activities or processes;
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3. Mitigate: involves the adoption of measures to reduce both the probability and the impact of risky events, bringing them to acceptable levels for the company. Reduction actions may consist of contingency plans, the redesign of business processes, the execution of periodic tests, the training and updating of personnel, diversification and dispersion (geographical, customers/suppliers, etc.).
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4. Accept: predicts that the probability of occurrence or the impact of a threat is such that it does not justify the investment of significant resources to address it. In other words, the company decides that it is more efficient to live with the risk than to try to eliminate or reduce it.