Question

What is a risk?

Provide an example of a risk.

Must all risks be eliminated?

Why is it important for risks to be eliminated within an organization?

Explain various ways risks can be eliminated.

CMGT/442 Information Systems Risk Management

Answer 1

1. A risk can be considered as a situation or a decision which can lead to a negative aspect or lose some of the valuables of the organisation. Risk cannot be exactly estimated or known but the probability can be calculated and certain remedial actions can be taken on that.

2.Example of risk - A company introduces a new product based on the belief that their loyal customers will prefer it like others. But the risk taken here is the price of the product is little expensive when compared to other products of theirs. Their customers are more of middle class than royal .so here the company takes risk to introduce their product. It may be a success or a failure.

3. It is not compulsory that all risks should be eliminated because few risks lead to positivity and give future ideas. Few risks lead to direct success.

4.An organisation is a place where production or manufacture is done on a large scale .Any Risk or loss will lead to heavy damage which cannot be easily dealt with. So any calculation done should be checked for risk probabilities and then proceeded.

5. Various ways to eliminate risks are

1. Proper planning of any work from the first to last stage will minimise risk.

2 . The solution if risk takes place should be available immediately.

3. Certain materials should be kept ready to avoid risk.

4. Expert advise will help a lot in risk management.

5. Cooperation between the employees and the management is of great importance to avoid risk at any situation.