Question

Discuss the common sources of risk on business projects and suggestions for managing them. Which suggestions do you find most useful? Which do you feel would not work in your organization? Why?

Please do not copy and paste from internet or previous answers- thanks a lot

Answer 1

We can consider any business, there are lot of inherent risks and also risks that occur to a particular business also. We can classify these risks as direct risks and indirect risks based on the mode they occur to the business organisations. Direct risks are the risks which show a direct impact on the survival, stability, growth and profitability of the organisation quite contrary to this indirect risks cause an indirect effect through various external and internal factors in the business environment. Following are the some of the common sources of risks:

• Natural calamities / disasters such as floods, tsunamis, tornadoes, earthquakes and so on
• Medical or pandemic issues such as human diseases, flu, etc.
• Environmental changes such as changes in the climate, acid rains, pollution
• Federal and policy changes
• Damages to property and machinery or work plants etc
• Physical loss such as theft or burglary
• Loss of trademarks, patents, infringement of copyrights and intellectual property rights
• Changes in the market conditions such as change in tastes and preferences of consumers, income, supply and demand levels

In the business projects risk management is quite a big task but by the following suggestion which i think are most helpful will surely do a wonder if properly done, because they are the most widely used risk management principles:

• Identify the risks which directly and indirectly impact our business
• After identifying them we should sort them according to the level of impact (for example high risk, moderate risk and low risk categories for better understanding)
• Insuring the risks which can be insured with an insurance company
• Being proactive with the potential risks (proactive means being alert and ready before the damage occurs)
• Try to reduce the risk to the least level possible
• If possible try to avoid the risk by following the necessary measure
• Transferring risk is also a risk management principle which is again done by insuring or transferring it to other staff who are responsible for that
• In the worst case if you cant transfer, avoid or reduce the risk or even not able to get it insured you have to accept the risk, accepting the risk may reduce the amount of damage or the impact of the damage otherwise it may lead to extreme levels.

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