Write 1,500 words in which you examine at least three new trends and developments in risk management. Examine future challenges to risk management strategies.
Make sure to address the following in your own words from outside sources:
Summarize each trend and development.
Discuss the significance of each with pros and cons.
Discuss implications of each in the business environment.
Format according to APA standards.
Running Head: RISK MANAGEMENT: TRENDS AND DEVELOPMENTS
Risk Management: Trends and Developments
Risk is the possibility of a loss and it arises due to uncertainties or the inability of the organization to forecast the future. The day to day increasing acts of terrorism, political turmoil, weather-related calamities, court's financial obligations and other reasons are motivating organizations to give more attention to risk management (Kendrick, 2003).
Risk management can be defined as the practice of identifying, analyzing and evaluating the risk present in the environment. After evaluation, the management selects the best potential approach to manage the risk and reduce its effects (Lewis, 2007). Risk means ambiguity of the conclusion. Managing risk in the organization as well as in the society is an act that is performed by the people in the society and business environment, which comprises the task of risk identification, risk evaluation and development of plan to risk management (Lock, 2007).
The business organization develops various strategies to minimize the risk in the organization with the help of available resources and expertise. The various kinds of risk available in the business environment are related to the market, credit, liquidity, events, operations, strategies, policies, etc. (Lewis, 2007). Although there is no standard approach of risk management but the managers uses a perceptible way to control risk in this highly changing global environment (Harris, 2006). There are some common elements of successful risk management efforts, which are as following:
1. Recognition of the risk is the responsibility of a program management (Kendrick, 2003).
2. The risk management process includes planning for risk management, continuously identifying and analyzing program events, assessing the likelihood of their occurrence and consequences, incorporating handling actions to control risk events and monitoring the progress of programs towards meeting program goals (Harris, 2006).
Environmental factors and risk are directly proportional to each other. As the environment has become more innovative, the ratio of risk is also increased. In order to compete with the highly risk environment of corporations, there are various trends and development has been takes place to manage risk (Lock, 2007).
Top Three Trends and Development for Enterprise Risk Management
Presently, in the highly competitive environment, when the world has become global, the business enterprises are speeding up to take advantage of opportunities of services oriented architectures, clouds and various kinds of distributed model of computing. The computing models are helpful to determine the insider and outsider that seek to exploit vulnerabilities (Kendrick, ...
The solution discusses risk management trends and developments. The significance of each with pros and cons are determined. The implication of each of the business environments are determined.