What does poor risk management mean?
Poor risk management is the result of poor practice of identifying and analyzing potential risk, and therefore, affects the quality of actions.
Definition of risk management
According to The Economic Times, risk management refers to the practice of identifying potential risks in advance, analyzing them and taking preventive steps to reduce the risk.
Risk is defined as the chance of something happening that will have an impact upon objectives. It is measured in terms of consequences and likelihood.
Basically, risk management offers a structured way to think about risk. An article written by Dr David Hillson in "Risk Management Isn't Hard", he stated that risk management provides a framework to channel how to effectively deal with risk intuitively.
Furthermore, as stated by standards Australia (1999), risk management helps a project become successful. Therefore, without practicing them, it reflects poor risk management.
Businesses face a number of external and internal factors, which makes it uncertain, whether the company would meet its objectives. So, in order to minimize and control risk, risk management is helpful in dealing with obstacles that may be faced in a project, and it also helps save time and money to be used on a project.
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Last edited on 14 April 2020.