Every human endeavour is subject to risk, and because life is risky, we understand the concept of risk. Or do we? Few people realise that if they buy a lottery ticket one hour before the draw the risk of dying before the draw is greater than the chance of winning the jackpot!
However, organisations must take risks in order to progress and evolve, or even just to survive. The question for business is not if it should take risks - but which risks to take and with what likelihood of successful results.
In business terms, risk can be defined as:-
'An uncertain event or set of circumstances that should it occur, will have a positive or negative effect on the organisations objectives'.
The term risk is applied where the outcome of an event is unknown but the probability of that outcome occurring is believed to be known.
Uncertainty is used to describe a situation where neither the outcome nor the probability of the outcome is known. The term is also used where the outcomes may not even be identifiable.
Business risks should only be taken if the desired outcome is worthwhile for the organisation. Risk management is the process that is used to identify, measure and minimise risk, to ensure that the desired outcome is achieved. This study aims to identify emerging issues in the management of risk, whose impact will affect organisations over the coming decade.
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