The Top 5 Basic Principles of Risk Management
The management of risk is an integral practise that is equally as relevant and vital to organisations of varying size, stature and sector across the world. Risk management provides the foundation for organisations to navigate an increasingly volatile business climate, accounting for potential disruptions or opportunities to shape the directions/routes businesses choose to take (Jeynes 2012). This practise is governed by unique principles that individually contribute to the maintenance of successful risk management. This essay will discuss the importance of five different principles of risk management, analysing examples of the impact of each approach in ensuring organisations remain vigilant in their evaluation of risk. Of these five principles, three will be derived from Hopkin (2012), and his discussion of the principles of risk management, and two will be unique perspectives derived from a combination of scholars’ visions and my understanding of the practise.
Structure
The principle of structure and successful risk management are intertwined with one another. The principle of structure is defined as an organisation’s establishment of a common structured process in the identification and evaluation of risk (American Society for Healthcare Risk Management 2009). The archetypical structure adopted by organisations revolves around a…
