Question

Explain the three dimensions of managing risk and uncertainty?

Don’t write for hand Plz because i don’t understand your handstyle and thank u :)

Answer 1

SOLUTION :------>>

•First Dimension of Risk

Without much exception, risk professionals start with an assessment of risk. These risk assessments are derived from either a qualitative or quantitative analysis that helps inform the organization of the threats to achieving its goals. Therefore, data — or the information derived from producing data about the risks facing an organization — is the first dimension of risk.

Some organizations have robust systems in place to capture and analyze an increasingly large and complex set of data about the risks in their firm.

•Second Dimension of Risk

The second dimension of risk is the process of deciding what actions to take or avoid based on the findings in the first phase. Many risk professionals call this process risk mitigation and some have come up with very sophisticated ways to minimize the impact a risk event has on their organization. Again, there are too many diverse examples of how this has been achieved, but I am sure you have examples of success stories describing an operational or technical challenge you have overcome.

•Third Dimension of Risk

The third dimension of risk requires the least amount of investment and has the ability to actually achieve a return on investment many times greater than the costs expended in dimensions one and two. Before I tell you what the third dimension of risk is, let me describe what it “feels” like to operate at this level of risk management.

Firms that have begun to operate on a three-dimensional level of risk have incorporated what they know about dimensions one and two and have empowered front-line management to address their risks and reward quantifiable outcomes in operational efficiency, safety and reductions in impacts to organizational objectives.

->Dimensions are same but some other points regarding risk :-

Uncertainty can be defined as unpredictable events in manufacturing environment that disturb operations and performance of an organization.

Presently organizations are functioning in environments which combine known knowns, known unknowns and unknown unknowns. The growth of the last category presents organizational management with a new and little charted management challenge.

The fast changing and uncertain environments these days brings a lot of uncertainties for the organization. These uncertainties require management to be agile and responsive for facing the conditions of change and uncertainty. The timing of uncertainty often causes a greater challenge response from the management than the uncertainty itself. “All of management’s value is derived from managing uncertainty.”

Sometimes risks are equated with uncertainties. But uncertainty is much more than risk and it encompasses risk in it as shown in Fig 1.