Frenzy M.

Picasales 4FMA

1. When can we say that risk awareness and risk management aligned with the
organizational strategy?
As we all know, risk awareness and risk management refer to the recognition of
potential dangers as well as the active process of mitigating or eliminating such risks. I
can say that these two things are aligned with the organizational strategy when the
strategies that have been set by the business are purposely made to eliminate those
risks. Business owners and managers should determine the necessary strategy for
those risks that are likely to happen with medium or high probability. It is crucial that risk
management and organizational strategy speak the same language and they should
create value and contributes to organization’s success.
For example, one of the growth strategies of the organization is to increase sales
by producing new products. In this example, there is an underlying risk which is the
probable loss of customers, because the customers may not like the new products that
have been produced by the business. So, to avoid this risk, another strategy will be
implemented which is to carry out product testing. To mitigate risk on new product
production, a project team may decide to implement product testing to avoid the risk of
product failure before final production is approved.
2. Do you agree that the organization should treat risk management as a discrete
event rather than continuous process? Why or why not?
I don’t agree that the organization should treat risk management as a discrete
event rather than continuous process. I believe that risk management is a continuous
process since it implies control of possible future events, and it is proactive rather than
reactive. It is about developing contingency plan and will reduce the likelihood of an
event occurring as well as the magnitude of its impact to the business. Risk
management should be a never-ending process, a cycle, which identifies all the
possible risks that might jeopardize the success of the project. Failure to identify factors
on an on-going basis can lead to losses, and even bankruptcy. Assessing and
managing risks is the best weapon you have against project catastrophes. By
evaluating your plan for potential problems and developing strategies to address them,
you’ll improve your chances of a successful project.
If a business sets up risk management as a disciplined and continuous process
for the purpose of identifying and resolving risks, then the risk management structures
can be used to support other risk mitigation systems. They include planning,
organization, cost control, and budgeting. In such a case, the business will not usually
experience many surprises, because the focus is on proactive risk management.