The loss of business opportunity is damaging to the organization.The exposure to risk will be avoided, altogether, so there will be zero risk.What will be the implication of this strategy? Four strategies of Risk Mitigation.Īvoid or withdraw means, In a critical situation, do not undertake that activity which carries risk. The risk has negative Impacts and adverse Impacts, and when they should required steps are initiated to reduce this adverse impact, so that strategy is called risk mitigation. Risk MitigationĪfter the completion of risk identification, risk measurement, or risk quantification, the process of risk mitigation takes place. This risk requires the priority to take action. To identify this risk, you should try to estimate the risk and make a risk assessment analysis. However, you should try to remove this risk before it occurs. This risk is most important to take immediate action. Those risks are having a high probability of occurrence, and the high impact of risk is indicating in the top right corner of the chart. However, you should try to remove or reduce this risk. This risk is highly significant to take immediate action. Those risks are having a low probability of occurrence, and the high impact of risk is indicating in the bottom right corner of the chart. However, you should try to reduce this risk, because this risk includes the combination of small risks that create a high impact in the future. So, This risk is medium essential to take immediate action. Those risks are having a high probability of occurrence, and little effect of uncertainty is indicating in the Top left corner of the chart. This record used in future monitoring and controlling. However, You can record risk in the risk register. So, This risk is not essential to take action. Those risks are having a low probability of occurrence, and little impact of risk is indicating in the bottom left corner of the chart. You can give priority to each risk so that it provides a clear view of risk impact. The decision-makers need to know about the dangers that are included in the project and the impact on the organization. Similarly, On the x-axis, we measure the impact risk from low to high. However, The chart matrix will measure the probability of occurrence along the vertical axis from low to high. The impact and probability chart represents the risk that occurred in the project. Here, Risk impact/ probability charts provide a useful framework for low to high risk. The probability of a risk is express or classify in the same way as the probability of 0% to 100%. However, the size of the impact varies in terms of cost, health, and other essential factors. The risk is always has a negative effect. Three categories of the impact of risk are: low, medium or high. Impact and probability matrix is a simple method to estimate the risks and allocate resources. This impact is caused due to uncertainties that occur in the project.Ī combination of impact and probability can determine the level of risk. The impact of the risk may be positive or negative. Two main components of risk analysis are impact and probability. Determine the risk impact and risk probability by using qualitative and quantitative methods. In this case, Risk impact and probability are the functions of risk analysis. Therefore, Risk management is a four-step process that includes risk identification, risk analysis, risk response, and risk monitoring and controlling. So, implement the risk management and risk analysis to reduce or remove the risk that occurred in the project. This risk will affect the growth of the organization at the time of work or completion of work.
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