Risk Management Essay

1209 Words Apr 5th, 2013 5 Pages
Risk is a commonly used term and its usually liked with bad impacts on our objectives. The Oxford English Dictionary define risk as “ a chance or possibility of danger, loss, injury or other adverse consequences”. There is no agreeable technical definition of risk as it went through many developments. The first stage was the management of threats only then the term is extended to cover the threats and the opportunities which face the organisations. The latest stage which is the management of the threats, opportunities, uncertainties and its sources. Of uncertainty (Ward and Chapmen, 2003). Therefore, Dowie argues to banned use the term “risk” in the risk management because of its misleading.
The definition will be used in this paper is
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Risk management is developing field and there are many opinions about what does Risk management includes and how it should be done. Many terminologies introduce to describe the organisations wide use of risk management such as ‘Total Risk Management’, ‘ Holistic Risk Management’, ‘Integration Risk Management’ and ‘Enterprise Risk Management’. All these terms mean almost the same things which reflect the helicopter view for the all risks faces by the firms (Ward, 2005). Association of Insurance and Risk Managers in Commerce used the term “Integrated Risk Management” and they define it as “ when risk management integrated (or embedded) into all of the functions and processes within the organisation” (AIRMIC, 1999). While Mottershead and Godfrey used the term ‘Enterprise Wide Risk Management’ as a technique “that looks at risk across the whole organisation rather than through the traditional functions and aligns risk management activities to shareholder value level”. Hodgkinson used the same term with wider meaning as “ a risk management philosophy that is: positive and proactive; value based and broadly focused ; embedded in processes; integrated into strategy and total operations; and continuous”. (Hodgkinson, 2001). In September 2004, the Committee of Sponsoring Organization of the Treadway Commission (COSO) produce their framework for the Enterprise Risk Mnagement which define the ERM as

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