Introduction
The reader will become familiarised with the term risk and it definitions from specifically the ISO 31000 standard of risk management and also the definition of risk from the criminology crime triangle. Which one of these two definitions that are the most suitable for usage within the security industry will be discussed and evaluated. How and why consequence is important when assessing risk priorities and determining where to allocate resources will be examined and answered.
1. Definitions
Security risk management is “the culture, processes and structures that are directed towards maximizing benefits and minimizing disbenefits in security, consistent with achieving business objectives”. (Australia, 2006) And where security is defined as: “the preparedness, protection and preservation of people, property and information both tangible and intangible”(Australia, 2006). Although Brooks (2009) claims that security cannot easily be defined, this text will consider the above definitions from the Handbook of Security Risk Management from Australian and New Zealand standards as true. If this definition is true, what can prevent an organisation from achieving its objectives? One answer might be the effects of risks. How is risk defined?
1.1. Risk according to ISO
The ISO-standard of risk management ISO 31000:2009 defines risk as “effect of uncertainty on objectives” (Australia, 2009) the standard is very generic and this definition may need further explanation. The handbooks for the standard suggests that risk is “the chance of something happening that will have an impact on objectives… measured in terms of consequence and likelihood”. (Australia, 2004) And this definition might be considered to be more understandable. ...
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...2006. Sydney: Standards Australia/Standards New Zealand.
Australia, S. (2009). Risk management - Principles and guidelines AS/NZS ISO 31000:2009. 20 November 2009: Standards Australia/Standards New Zealand.
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Risk is characterized as an occasion that has a probability of happening, and could have either a positive or negative effect to a project ought to that risk occur. A risk may have at least one causes and, on the off chance that it happens, at least one effects. For example,
In order for project and program managers to create and execute successful projects, they must fully understand the importance of identifying and dealing with risks associated with their projects. According to Bezzina, Grima, and Mamo (2014), “effective risk management frameworks and strategies are developed with the intention of improving performance, and creating the baseline for the continuity of uninterrupted efficient business processes through risk management good practice” (p. 593).
In all aspects, risk assessments should measure the risks and foretell the impact of the project. Project management utilize risk assessments in order to
The strategies of homeland security seek to combat the risks the nation faces and so by using risk management effective plans and decisions can be formed to address these risks (U.S. Department of Homeland Security, 2001, p.9). In order to carry out the many missions of homeland security, effective and reliable capabilities must be obtained to have the best results, risk management is used to identify these capabilities and also discover what is lacking in the realm of capability (U.S. Department of Homeland Security, 2001, p.9). Without resources it would not be possible to keep the nation safe and keep threats at bay, by using risk management to allocate the best resources and fund projects that have substantial returns homeland security professionals ensure that goals and missions can be accomplished (U.S. Department of Homeland Security, 2001,
Risks- how the organization will cope with the uncertain risks with their management approach and plan.
" Creating a Risk Management Culture." Microsoft TechNet: Resources for IT Professionals. N.p., n.d. Web. 4 Aug. 2010. .
In fact, there are numerous reasons that make risk management a necessity in order to meet homeland security’s goals. For one, risk management facilitates well-structured priority level planning in order to achieve a more structured process, which aims to become more standard across the board for all functions and activities within homeland security. Second, risk management develops specific performance calculations and measurements by using formulas and other variables to present a plethora of data collected for planning and decision making purposes. Lastly, risk management aims to achieve cohesively developed goals and objectives within its enterprise by the use of integrated
Risk management is defined by the Department of Homeland Security (DHS) as “the process of identifying, analyzing, assessing, and communicating risk and accepting, avoiding, transferring or controlling it to an acceptable level considering associated costs and benefits of any actions taken” (DHS 2010a, p. 30). Raymond Decker, Director of Defense Capabilities and Management testified on behalf of the U.S. Government Accountability Office (GAO) before the Subcommittee on National Security, Veteran’s Affairs, and International Relations; House Committee of Government Reform, and further described risk management as the “systematic and analytical process to consider the likelihood that a threat will endanger an asset,
There is a lot of complexity in understanding risk management and its correlation to homeland security. Risk management is a way to approach the fact that securing the homeland is not certain and there are unknown variables in every aspect of life; risk management is a way to narrow down the focus based on quantifiable information determining probability against capability. Risk management plays and integral role in homeland security. Risk management is employed using a formula described in the NIPP for establishing a narrow scope to make the best decision about protecting infrastructure. The risk management formula lays down the foundation to make the most reasonable determination based on the potential consequences, vulnerability, and
Principle of Security Management by Brian R. Johnson, Published by Prentice-Hall copyright 2005 by Pearson Education, Inc.
The objectives of operation, reporting, and compliance are represented in the column. Components are represented by the rows regarding the ERM. The third dimension is the entity’s organizational structure. It demonstrates clear how and how counteract low risk tolerance and high risk appetite. Risk reduction is obtained by facilitating effective internal control with a broad scope that reflects changes in the framework to risk management with ERM. The framework requires adaptability which enables flexibility due to a overlap of functions of identify, assessing, and responding to risks within operations, reporting, and compliance. Activities, information, communication should be monitored, evaluated, and identified for response are part of the ERM for effective and efficient risk management. The concept of risk appetite and risk tolerance is introduced because the identification of potential events affecting achievement can be managed. Also, the process requires communication, consultation before and monitoring and review after every decision or action (McNally, 2015). The financial principles to risk management are effective risk management creates value, integration, decision making, address uncertainty, systematic structure, and facilitated continuous improvement. The financial principles form effective and efficient management within a firm. Financial principles help ERM with risk
Risk management is a process used in all industries to reduce the risk. The Risk management tool usage changes from sector to sector and hence each sector has developed their own risk management tools and methodologies to mitigate the risk. But the concept remains the same behind all the tools (Ropel, 2011). The main steps for risk management irrespective of the sector are:
It affects or is created by business strategy decisions. It´s critical to the growth and performance of certain firm. These risks may be triggered from inside or outside of the organisation. Once they are understood, the firm can develop effective, integrated, strategic risk mitigation.
Finally, we may say that it can be difficult to clearly separate risk from uncertainty. This is because the uncertainty is one part of the scope of risk. In other words, risk and uncertainty are closely linked to the context of risk management frameworks. Thus, it can be inferred that the effective use of risk management process frameworks particularly the COSO and the SHAMPU framework seem unlikely to rely on the ability to differentiate between risk and uncertainty. Although if the framework is able to perfectly differentiate between risk and uncertainty, it seems certain that an organization can appropriately deal with the potential issues.