Principles of risk management

Every project manager and business manager should be aware of the practice and principles of effective risk management. Identifying and managing the risks to the organization, program, or project can save you unnecessary difficulties and prepare leaders and team members for any unavoidable event or question.

The OGC M_o_R (risk management) framework identifies twelve principles that are "not … mandatory but [to] provide supportive guidance for organizations to develop their own policies, processes, strategies and designs."

Organizational background

The principle of all general treatment modes, including PRINCE2 and MSP, and M_o_R, is that each organization is different. Project managers, program managers, and risk managers should take into account the specific context of the organization to thoroughly identify risks and ensure appropriate risk management procedures.

The term "organizational context" includes the political, economic, social, legal and environmental background.

Involvement of stakeholders

The management team becomes easy for internalization and forgets that stakeholders also play a key role in everyday business processes, short-term projects, and business-level changes.

Understanding the role of each stakeholder and addressing stakeholder involvement is essential to success. Stakeholders should, where appropriate, be informed of the risks of a project or program. "Appropriate" concerns in the context and stakeholder involvement: identity and role of stakeholders, stakeholder influence outside and outside the organization, stakeholder investment in the organization and its probability and potential impact

Organizational Objectives

Risks relate only to the organization's activities and objectives. Raining poses a negative risk to the picnic, poses a positive risk to droughts and does not endanger submarines.

It is imperative that the person in charge of risk management (whether the business leader, the project / program manager or a special risk manager) understands the organization's objectives to ensure a personalized approach

M_o_R Approach

M_o_R framework processes, policies, strategies and designs provide general guidelines and templates within a given organization. These guidelines are based on the experience and research of professional and management professional risk managers. Due to the best practices, individuals involved in managing the risks associated with the organization's activities are able to learn about the mistakes, experiments and lessons of others


Accurate and clear representation of the data and the transfer of this data to the right staff, managers and stakeholders is key to successful risk management. The M_o_R methodology provides standard templates and tested structures for the frequency, content and participants of risk communication

Roles and responsibilities

The best practice for risk management is the clear definition of risk management roles and responsibilities. Each function and accountability must be transparent, both inside and outside the organization. This is important both for organizational governance and to ensure that all necessary responsibilities are covered by suitable individuals.

Supporting structure

The support structure provides within the organization standardized guidelines, information, training and funding for individuals addressing risks in a given area or project

This may include a centralized risk management team, a management approach, and best practice guidelines for reporting organizational risks and review

Early Warning Signs

Identifying risks is an indispensable first step to removing or mitigating risks. However, in some cases, risks can not be removed in advance. Early Warnings are predefined and quantified triggers that alert individuals responsible for risk management to approach an identified risk. This allows the most thorough and prepared approach to the situation.

Review cycle

The revision cycle for the need for early alerts. It establishes a regular review of identified risks and ensures that risk managers remain vulnerable to new risks and the effectiveness of current policies.

The M_o_R

Any successful strategy requires careful consideration of possible obstacles to enforcement. Frequently asked questions are:

o defined roles, responsibilities, responsibilities and ownership

o an appropriate budget for embedding the approach and performing activities

o adequate and accessible training, tools and techniques

o risk management orientation, induction and training processes

o Regular evaluation of the M_o_R approach (including the above)

Supporting culture

Risk management supports many different areas and aspects of the organization's activities. A supportive culture is essential to ensure that everyone with risk management responsibilities is confident of raising, discussing and managing the risks. Supportive risk management culture includes assessing and rewarding risk management competencies for the right individuals

Continuous improvement

There is nothing in a developing organization. An effective risk management policy involves the ability of re-evaluation and repair. At a practical level, this necessitates the designation of a group of individuals or individuals to ensure that risk management policies and procedures are up-to-date, as well as the systematic revision cycles of the organization's risk management approach.

Source by sbobet

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