Risk a risk arises. In regards to project

Risk
management can be defined as the identification, analysis; assessment, control,
avoidance, minimization, or elimination of unacceptable risks, whereas
operations management is the design, execution, and control of operations that
convert resources into desired goods and services, and implement a company’s
business strategy (http://www.businessdictionary.com). In this paper, the main
focus will be on risk management and operations management and how they can be
integrated into today’s operating management environment, also the reasons why
we need risk management in today’s business situations and why is it becoming
more important.

Risk
management pertaining to business is considered to be more of a practice. It is
seen as an important concern in any organization, in order for them to succeed
out there in the modern business environment. Overall it consists of a number
of activities which should be both focused on and also integrated. It goes on
to guide the attention and awareness of businesses and at the same time looking
at all the necessary possibilities from which certain risks and opportunities
will be realized. In general, good risk management practice means simply
creating proper awareness and being prepared in the case that a risk arises. In
regards to project management of businesses, risk management is an important
aspect. Risk management includes ideas such as the planning of risk management,
resourcing, and ownership as well as project lifecycle management which
involves risk controlling as well as risk reporting and monitoring.

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Firstly,
I would start off by saying, based on knowledge and previous researches done on
this topic that I strongly believe that risk management should be integrated
into an organization’s management system, but however, I do not think it should
be used as an individual or independent process.  As we all know it is quite obvious that risks
exist in nearly if not all aspects of our business world and therefore some
risks are easier to predict while others remain unpredictable and beyond our
control. Risk management has been around for quite some time, so it is not
considered as a new tool for businesses. Although risk management has been
practiced for thousands of years, it was not until the 1950s that it was
articulated and formally developed by academics working in the field of
insurance (Campbell, K & Campbell 2009). In most organizations, risk
management is being used as an essential factor at all the levels of an
organization, but most importantly when it comes to good decision making and
good management. The overall objective of risk management is to basically deal
with the identification of risks and finding suitable ways and solutions to
reduce these risks. For the most important part of it, I believe that all managers
and those in charge are expected to act in a proper manner and play their roles
when it comes to the risk management process. Some of the most frequent risk
that businesses are faced with or undergo on a day to day basis exists in the
areas of design, operations, testing, development, training, integration,
requirements and the list can go on.

Today,
we live in a world that is rapidly changing because of technological
advancements and so for most organizations understanding the true meaning, full
potential and ability to keep ensuring business continuity, in the long run, is
a very important aspect when it comes to maintaining both aspects of
competitive edge and performance. For many businesses, I think that the
placement of security levels will be a great idea to better protect themselves
as well as their employees. Nowadays, a lot of the current risk that businesses
face on a day to day basis is all obvious due to the nature of the environment
in which that particular business may operate. As it relates to the operating
environment it is important for these businesses no to focus totally on the
environment itself, but to also consider some of the risks that may be
associated with the industry itself. I believe that effective and efficient
risk management should be put in place to play a key role in the culture of any
business if they want to be successful and keep up with the good name and
reputation. In any organization, the practice of risk management is best suited
for establishing the main priorities of that organization and helping to
determine which risk is potentially most likely to occur and which will be most
destructive.

From
a business point of view operations management is solely responsible for
managing and coordinating the resources that are needed to help produce a
company’s products and services. If there is no use of operations management
there would most likely be no products to sell. The roles of operations
management are very important and are used to transform the organization’s
inputs such as technology, materials, facilities, human resources etc. into a
company’s finished end products. The business functions need information from
operations management in order to perform their tasks properly in general.
Operations Managers are quite highly dependent on input from other areas.
Companies today are very much aware that successfully managing their OM
functions is really not enough in terms of maintaining leadership in a highly
competitive market. Operations risk arises not only from a company’s operations
but also from any disturbance in its operational process (Hong 2013).

When
it comes to the supply chain, for example, we can say that every company
depends on other materials along that chain to successfully deliver the right
product to the final customer in yet a timely and cost-effective way. For any
reason or so that the OM function of other members of the supply chain is not
managed properly, the excess cost will be added 
which later on will be passed down to all the other members of the
supply chain in the form of higher prices, so that simply tells us that all the
members of the supply chain should take all of the necessary means and
precautions to manage their OM function if they want to be successful, hence
the reason why all of the companies that are made up of  supply chains need to take the time off and
make sure that the OM functions are linked closely and working together as one
unit, so that the entire supply chain would work along smoothly in an effective
and efficient manner without experiencing any 
problems. Many risks events in supply chain cause delays and disruptions
in matching supply with demand (Kouvelis et al 2011).

Operations
management is known to be a very important part of any organization. If there
is not an efficient operations management system put in place for any business
there would be a great chance of risk arising. Some of the main aspects of
operations management I believe are somewhat centered around proper quality
service and good accuracy and controlling risks. The operations managers of any
organization are expected to work along hand in hand and side by side with
corporate risk managers, therefore, it is right to say that they are the ones
who are responsible for ensuring that workers are aware of an organization’s
natural risks and the actions concerning these risks. Operations management is
one of the processes which occur internally. However, operations managers work
along with various departments towards achieving goals such as making sure the
company’s products are manufactured according to specifications, packaged
properly, sold to the right retailers and marketed successfully. Operation
managers share many duties; it doesn’t matter where they work. Operations
management can be strategic, tactical and operational.

        Organizations and industries face
operational risk wherever they turn. The area of risk management focuses on
aspects of the natural, political, economic, engineering and also social
sciences. In today’s modern society the OM environment is very much complex and
different from what it used to be a few years ago.  Today customers are demanding a better
quality, greater speed, and lower costs. In order to succeed, companies have to
be masters of the basics of operations management.  In the business world, there are a number of
ways that businesses, in particular,  can
take into consideration when looking at the pros and cons of implementing their
innovative and new ways of going about conducting or managing their business.
Businesses look at risk management as a specific way for organizations to
evaluate whether or not it will be profitable for them to make various changes
throughout the business practices and also their operations. The typical idea
of risk management is a good way for people and organizations to manage the
threats that they are faced with or presented to them on a regular basis.

            The
task of a risk manager is to predict and enact measures to control or prevent
losses within a company (Risk Management 2009). Risk management helps to lower
the chance of taking high-risk actions that have low-value results. With the
implementation of appropriate risk management techniques in businesses, people
are given the opportunity to properly evaluate the threats, risks, and value of
specific decisions to help grow and build a secure business. Once proper risk
management is being applied it will help in the reduction of an event
occurring, and most of all the extent of its impact. The main reason why most
businesses engage in using risk management is so that it can be used as a means
of identifying possible risks, planning, reduce or allocate risks and provide a
rational basis for better decision making in regards to all risks. Risk
management is categorized as a part of information security. In many instances,
risk management is being carried out by risk control along with risk
identification. The entire process is said to be very manageable and simple
which simply means there should not be many problems when it comes to the art
of implementation but instead project managers are the ones who are afraid of
using risk management simply because of the fact that they have the idea of
believing that if the risk is realized, it will somewhat be seen as their fault
for the risk-taking place.

 In many businesses today risk management is
been used for a number of reasons such as; it may be used as a legal
requirement depending upon the industry or sector one is being involved in also
it helps to promote good management and lastly, since resources available are
limited therefore a focused response to risk management is necessary or
needed.  Another main aspect of this
paper is why risk management may fail in the operations of businesses. Risk
management may tend to fail in businesses for many reasons. For instance, it
may fail because of a failure to share information also a lack of top
management support, limitations of scope and for the fact that all stakeholders
were not being engaged. Today risk management is becoming more and more
important when it comes to the operations of businesses simply because of the
fact that management teams are now being more cautious after learning from past
mistakes that they have made, also they are aware that insurance isn’t as
comprehensive as they think and legislation are becoming way more strict than
they were before in the past.

In
conclusion, I can conclude by saying risk management is a practice which when
focused upon and integrated can be most effective.  In today’s business world faces a wide
variety of risks and threats that can somewhat have disturbing effects.
Overall, all organizations manage their risk to some type of degree and their
main and final goal is to integrate the process for managing risk into the
organization’s overall management, policies, reports, values, cultures,
planning and not forgetting strategies.

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