Introduction to Risk & Risk management Process & strategies with reference to ISO 31000.

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By- Datta Subhendu Subir
A13559016057
MBA CPM SEC. B GROUP-1

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MBA Construction Project Management
CONTENTS
Understanding Risk Management
Risk Management Standards
Risk Management Processes
Risk Management Strategies
References

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RISK
Risk is defined as the “effect of uncertainty on objectives”
Risk is intrinsic to doing business
50 % of small and medium-sized enterprises (SMEs) close down before completing their fifth year-
operating a business can be a risky endeavor.
Risks may arise from financial uncertainty, legal liabilities, strategic management errors,
accidents and natural disasters.
Risk has consequences in terms of economic performance and professional reputation, but
there are also environmental, safety and social considerations.
Risk management is the process of identifying, assessing and controlling threats
to an organization's capital and earnings.
RISK
DIRECT / INDIRECT
INTERNAL / EXTERNAL

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TYPES OF BUSINESS RISKS
Source: https://ag.purdue.edu/commercialag/farmrisk/understanding-risk-types/

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ISO Risk Management Standards
ISO 31000:2009 - Risk management- Principles and guidelines- set of
principles, a framework and a process for managing risk.
Help organizations of all sizes to effectively allocate and use resources for risk
treatment.
Recognized by international regulatory bodies, or by target industry groups
Regularly supplemented and updated

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SUMMARY
Standards — ISO
1. ISO 31000:2009, Risk management — Principles and guidelines
2. IEC 31010:2009, Risk management — Risk assessment techniques
3. ISO Guide 73:2009, Risk management — Vocabulary
Technical Report — ISO
1. ISO/TR 31004:2013, Risk management — Guidance for the
implementation of ISO 31000

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Defines potential
risks that may
negatively
influence a project.
Calculating
probability of risk,
understand & its
influence on
Company’s
objectives
Make decisions
whether the risk is
acceptable and
whether the
company is based
on its risk appetite
Develop plan to
alleviate identified
risks
Continuously
monitor and track
new and existing
risks
RISK MANAGEMENT PROCESSES
Risk
identification
Risk analysis
Risk
assessment &
Evaluation
Risk
mitigation
Risk
monitoring

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ISO 31000-Risk Management Process
ESTABLISH THE CONTEXT
RISK IDENTIFICATION
RISK ANALYSIS
RISK EVALUATION
RISK TREATMENT
MONITOR&REVIEW
COMMUNICATION&CONSULTATION
RISKASSESSMENT

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TARGET AREAS -OVERALL RISK MANAGEMENT
PROCESS:
Create Value For The Organization.
Integral Part Of The Overall
Organizational Process
Adaptable To Change
Continuously Monitored And
Improved Upon.
Transparent And All-inclusive
It Must Explicitly Address Any Uncertainty
It Must Take Into Account Human
Factors, Including Potential
It Should Be Systematic And
Structured.
Tailored To The Project
Factor Into The Company's Overall
Decision-making Process.

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RISK MANAGEMENT SRATEGIES
RISK
AVOIDANCE
Strategy is designed to
deflect as many threats
as possible in order to
avoid the costly and
disruptive consequences
of a damaging event
RISK
REDUCTION
Reduce the amount of
effect certain risks can
have on company
processes by adjusting
certain aspects of an
overall project plan or
company process, or by
reducing its scope.
RISK
SHARING
Consequences of a risk is
shared or distributed
among several of the
project's participants or
business departments Or
third party, such as
a vendor or business
partner.
RISK
RETAINING
Decision to retain the risk
and deal with any
potential fallout since a
project's anticipated profit
is greater than the costs of
its potential risk.

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RISK MANAGEMENT SRATEGIES
LIKELYHOOD
IMPACT

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REFERENCES
Whatis.com, (2016), URL-
http://searchcompliance.techtarget.com/definition/risk-management, TechTarget
(Accessed on 29th July 2017)
ISO 31000:2009- Risk Management
IEC 31010:2009, Risk management — Risk assessment techniques

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