Risk Management: A Key Strategic Tool in Business

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Recommended: 8 quality management principles of ISO 9001:2008

The Institute of Risk Management (IRM) believes that risk management is a key part of the strategic administration, encompassing methodical approach towards risks associated with their activity (IRM, 2002). Its purpose is to achieve the benefit not only within a particular activity, but also within the portfolio of all activities. Emerging in early 1990’s (Power, 2004), the risk management as a strategy aimed at reducing and optimising the cost of insurance in many companies (Olson & Wu, 2010). Other areas, namely, health and safety, environment, legal, finance, to name a few, have also commenced adopting similar approach (Hasle & Limborg, 2006). In order to manage organisational risks within different areas of a company’s activity, unconnected …show more content…

The international quality standard ISO 9001:2008, for example, repeatedly calls for the ‘continuous improvement’ via the integrated approach, which under its umbrella combines health and safety and environmental risk management. Risk managers ought to optimise the efficiency and evolve in the way they provide support to the organisation. Integrated risk management approach is aimed to provide the rationalisation and avoidance of duplication (Hoyt & Liebenberg, 2011), and hence improve the effectiveness of the overall risk management (Beasley et al., …show more content…

Large companies use the vital process of potential sub-contractors’ pre-qualification to identify their suitability. Integrated risk frameworks are very useful for assessing credit ratings, employability, SHEQ compliance and overall risk rating. The integrated process of pre-qualification is supported by PAS91 (BSI, 2013) and widely adopted by various enterprises. Another illustration of the ERM frameworks utilisation would be the assessment of organizations’ credibility within the finance sector in relation to credit rating, accounts and insurances (Olson & Wu,

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