Risk management cycle

As the global trend towards industrialization accelerates, population boom and cities continue to grow ever larger, the environmental decision making- process is becoming increasing challenge. The risk management cycle is one of the most significant parts of the environmental decision- making process.

The risk means that there is a potential threat out of the control and this threat is possible to take place. The risk also means uncertainty of outcome. In addition, the risk management is the project for people to manage the risk and the risk management cycle is the guideline for the risk management. There are also some other definitions for the risk management cycle. For example, risk management is the sequence of steps that are systematically taken and revisited to manage risk (IADC Lexicon, 2016).

There are four steps of the risk management cycle. Firstly, identifying the risk. In this step, the risk is carried out and it do not depend on the size or criteria of the risk. There are various frameworks available for identifying the risks and carrying out a risk assessment that may be suitable for a charity to consider when planning programme operations. This part is significant, because it is the staring of the whole management.

The second one is the mitigating the risks identified. There are four strategies in this step, namely, transfer, terminate, treat and tolerate. Transfer is mainly used in the financial aspect. Terminate means that stopping the project when the risk is identified and the risk produce great harm, which is difficult to repair. The third means that finding out the measures to treat the risk and providing the strategies for avoiding the risk. The last one is that the risk is inevitable. These four ways are popular and useful.

The stage three is training the staffs and implementing systems. Indeed, the more perfect of the working process the less risks will be produced. The last step is monitoring and reviewing the performance.

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There are also some risk assessment tools used in the decision- making process, such as SWOT analysis, PESTLE analysis and risk matrix.

In conclusion, the risk management cycle is significant and beneficial for the environmental decision- making process.

 

 

References

 

IADC Lexicon. (2016). Definition of Risk Management Cycle – IADC Lexicon. [online] Available at: http://www.iadclexicon.org/risk-management-cycle/ [Accessed 24 Sep. 2016].

 

CHARITY COMMISSION FOR ENGLAND AND WALES, (2016). The risk assessment cycle.

 

Wickson, F. (2005). Australia’s Environmental Regulation of Genetically Modified Organisms: risk and uncertainty, science and precaution. Griffith Journal of the Environment, Issue 1, June 2005: Ecopolitics XVI Conference; selected papers, Article 7, pp. 1-27

 

 

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