The Process of Risk Management in Business

Introduction

The process of risk management involves the formulation of a plan that can make the unmanageable manageable. Following the risk management strategy, it may be possible to turn what might seem to be a disadvantage in the planning of conferences and events into an advantage (Culp & Christopher, 2002). The risk management process requires that the risk is first identified as a measure to reduce or prevent the risk that may be associated with the planning of an event or conference.

Identifying Risks

Event planners may not be in a position to resolve a risk that cannot be identified. The process of identifying risks for purposes of prevention and reduction of the outcome can be done in a number of ways such as brainstorming and brain writing, which is a more structured way to get a group to analyze a challenge (Culp & Christopher, 2002). Identifying risks that are associated with specific events and conferences involves tapping resources from the involved team, colleagues, and stakeholders (Smith et al., 2002). For effective risk identification, it is recommended that the resources are tapped from individuals with relevant experience who may be helpful in gathering information needed for both the identification and resolution of the problem.

Risk Prevention and Reduction

Risk prevention and reduction involve checking on the areas of concern by building trust in personal intuition that can be helpful in pointing out unlikely scenarios that may not be thought to happen in the event and conference planning process (Culp & Christopher, 2002). At the same time, it is not advisable for event planners to become overconfident, as special procedures and systems are necessary to weed out risks from non-risks. These special procedures involve taking out insurance and consulting with experts who ensure that the risks are rooted in the cause of a problem.

Risk Analysis and Transfer

After the identification of the risks, it is necessary to analyze the risk by transferring the risk and identifying the individuals responsible for a crisis. Risk management in the planning of events and conferences requires a determination of how the potential risks may occur (Hopkin, 2010). Assessing project risks makes it possible for project managers to ultimately and proactively address many aspects involved with the risk management process.

Transferring the responsibility of a risk may be difficult due to insufficient information about the venue, conference planners, suppliers, and delegates involved in the occasions (Culp & Christopher, 2002). Data gathered may be complex, but with the best practices in most industries, it is possible to carry out a proactive analysis for the required framework in risk management (Tummala & Schoenherr, 2011). Transferring the risk may be done through qualitative and quantitative risk analysis that involves determining the risk factor and its potential impact on planned events and conferences across various metrics.

Impacts and Responsibilities

The analysis of potential risks is significant in composing rules that influence the use of resources and the duration of events. The risk may also impact the schedule and time of event planners, thus limiting the quality of projects and the procurement process (Ley, 2004). It is important to note that event planners are often held responsible for potential risks associated with events and conferences at specific venues. Event planners may also transfer responsibility to delegates and suppliers through a written agreement to ensure the success of events.

Contingency Planning

In the third step of the risk management process, it is necessary for event planners to make contingency plans, prioritizing potential risks. The backup plans are created to assist in event and conference planning in case of an emergency. Project managers may be required to evaluate potential risks and resources required to resolve the challenges involved (Ley, 2004). It may also be necessary to note that risks may vary, and some may plunge planned projects into a halt. Contingency plans are required to ensure that risks are prioritized according to the level of attention they demand from event planners (Tummala & Schoenherr, 2011). These plans simplify planning for how and when risks would be addressed in a project.

Noting down contingency plans may be an opportunity to prioritize risks based on problems with little impact on the project and those posing a threat to its success. Identifying and evaluating low-priority risks may be significant but not enough to warrant excessive time investment (Tummala & Schoenherr, 2011). Project managers have the opportunity and choice to decide on the risks to focus on and those to ignore. In risk management, it may be advisable to let some risks go if their impact is not significant to a particular project being planned (Hopkin, 2010). Contingency plans are, therefore, important in highlighting evacuation plans communicated to all stakeholders in case of a crisis.

Risk Distribution

The last stage of risk management requires distributing the risk to various people involved in the project. Distributing the risk implies that the project manager assigns responsible individuals to oversee the risk (Tummala & Schoenherr, 2011). During the identification stage, it is also necessary to identify people responsible for the risks to initiate work toward resolving them (Ley, 2004). Assigning risks to responsible individuals may not be the end or solution to the problems, as the project manager must ensure a quick response to risks. The risks have to be monitored by the project manager, who also oversees other operations of the entire project.

The distribution of risks may be up to the project manager, who is in charge of all team members with varying skills and talents. It is upon the project manager to communicate information to the right people who would lead the charge to resolve a problem when it occurs (Culp & Christopher, 2002). The process of distributing risks ensures that every risk in a project is assigned to the person responsible for the challenges. In the event that there are no specific people assigned the duty of resolving potential risks, there is a high chance that the project may be exposed to more risks.

Conclusion

The risk management process may be difficult as project managers must foster a collaborative environment needed to resolve risks. Managing potential risks also requires collecting real-time information to ensure that the risk management team acts on accurate data to minimize the impact of the risks or prevent their occurrence (Ley, 2004). When executing projects, it is important not to mix up the steps in risk management, as the impact of the risks is always unknown.

References

• Culp, C. L., & Christopher, C. (2002). Risk Transfer: Derivatives in Theory and Practice. John Wiley & Sons.
• Hopkin, P. (2010). Fundamentals of Risk Management: Understanding, Evaluating and Implementing Effective Risk Management. Kogan Page Publishers.
• Ley, R. (2004). Project Risk Management: Processes, Techniques, and Insights. John Wiley & Sons.
• Smith, P. G., et al. (2002). Project Risk Management: A Proactive Approach. Management Concepts.
• Tummala, V. M. R., & Schoenherr, T. (2011). Risk Management and Control in the Public Sector: An International Perspective. Springer.