Risk: Nature and Assessment
Introduction to RISK:
Risk is something that mostly ends up in the loss of something. In our daily life we face many events and situations that can lead to a loss in the end such situations are risky situations or the situations that may lead to the loss or disaster. So in short it can be said that risk is the chance of having some loss. This description brings in front two parts: one part shows that there is a chance that any loss or damage may take place but the other part shows that it is not necessary that the loss will definitely take place. Some times when any process is going to take place then there are chances of success as well as risks of failure. The condition in risk is between certainty and uncertainty. It can be said that there is a link of risk to loss but there are no links of loss to risk necessarily. (Tuzun, n.p, n.d)
Components of Risk:
Any risk surely involves three main parts: context, conditions and consequences.
Context: The context is defined as the circumstance or situation in which the event is going to take place with which the risk is associated.
Conditions: As the name shows it defines the limitations, conditions and situations that are provoking the risk to take place.
Consequences: Finally this part of risk shows the effects and results of the context and conditions and determines whether the risk has taken place or not. (Tuzun, n.p, n.d)
It is not necessary that the risk is always a loss instead it can be threat, injury, damage and any other malfunction or negative thing that takes place. Every field or almost every event is having some risks associated with it if it is not being handled properly. (Risk definition, n.p, n.d)
Nature of Risk:
There are many different natures of risks and in every type of risk the state of risk is always between the certainty and uncertainty. No one can be sure that whether the risk will take place or not. All types of risks will always have many possible results and in most of the cases all of the results are previously expected. In any risk all the expected results have same chances to occur. (Brozik, 4, n.d)
Basically there are two types of risks systematic and unsystematic risk but there are many other particular types of risks. Some of these particular and the two fundamental types of risks are described below:
These are the most common type of risks and it is very much difficult to avoid these risks from taking place. It is also difficult to minimize these risks. Mostly these risks are affecting the property and possessions. These are the risks that are caused by some political, governmental, legislative changes and any other changes in any system. There is no way out of such risks but the only way is to develop the plans and strategies before the occurrence of any risk that what will be the remedy for that risk.
These risks are not harmful to the large extent of assets rather they affect a part of the property or possession. These can also be known as the specific risks as they affect the specific part of the property and belongings. It is easy to deal with these risks and to avoid these risks a process called diversification is used. Risks like country risks, market risks, exchange rate risks, liquidity risks, financial risks and business risks are different aspects of unsystematic risks. (Jyot, n.p, n.d)
The country risks include the risks that are associated with the fact that the country will not be able to fulfill the financial commitments made. If such a risk occurs then the entire economy of the county will be affected and the relations of the country with other countries will also be in loss.
These are the risks that are caused when there are changes in the policies of the government or any change in the legislations. In case of changes sometimes there are results that are really not positive.
These are the types of risks that are mainly concerned with the assets and finance yet there are many risks that are associated with every field of life like health risks, software risks, maintenance risks and so on. The types of risk with which we are concerned here in this paper are the risks that are associated with the hazardous wastes. Obviously such risks include environmental risks as well as health risks. (Risk and diversification, n.p, n.d)
As the name shows risk assessment is simply the observation and judgment of risk. In risk assessment it is keenly assessed that what can be the reason for creating a risk or harm to the organization, process or the people. It also looks for whether any safety measures have been adopted to avoid the risk or not. Risk assessment also looks for the preventive methods that has been taken and also make sure that these preventions are enough if there are some lack nesses in the preventive measures then other safety measures are decided. It is the right of the people associated with any procedure or company that they should be provided with the preventive and safety measures. If the risks are not assessed properly then there can be many different problems that will be then faced by the people like health problems, destruction of lives, huge financial loss because of machinery failure and even many legal problems. Risk assessment can be considered as the key factor for the planning of any process. (Five steps to risk assessment, 1, 2006)
Steps to Risk Assessment:
There are five steps that should be followed for accessing the risks. These include:
Identifying the Hazards:
There should always be a difference between the hazard and the risk. A hazard will definitely cause some problem if the process is not being performed carefully where as the risk is uncertain and can even take place if the process is performed carefully. Risk is basically a probability that some one can be debilitated by the hazards that are present in the process. So for accessing the risks the major and basic step will be to recognize the different things involved in the process that can cause hazards. These hazards can be found out by looking around the workplace carefully, asking the workers about any thing that in their opinion can cause harm and checking the instructions of the manufacturer or designer of any instrument, machine or chemical that is being used in the process. These are some of the precautions that can be taken in general.
Deciding Who can be Harmed and How:
While observing and finding out every hazard it is also necessary to find out that to whom this hazard will be harmful. It should also be noticed that how the hazard can provide harm to the people. This strategy is best to adopt as it will provide options for dealing with that risk and hazards.
Risk Evaluation and Deciding the Precautions:
After finding out the hazards and the people who can get harmed by these hazards it would be better to find out what risks are expected by these hazardous substances and then finally looking out for the safety precautions of those risks that are identified.
Recording and Implementation of the Findings:
What ever are the outcomes of the entire risk assessment process up till now should be noted down some where so that the readings are saved and can be used at any time. When these assessments are recorded some where then the implementation of safety precautions should be started.
Reviewing the Risk Assessment Process and updating it:
Now through out the process these readings should be revised again and again so that if any other new risk or hazard has been introduced then it should be noticed. It is very much essential to update the process of risk assessment so that new hazards and risks are in the mind of people working.(Five steps to risk assessment, 2, 2006)
Influence of Risk on the Regulatory Authority for Controlling the Land Filling of Hazardous Wastes:
It has been observed that in many areas various harm full substances are seen over the land which is very much risky as it is harmful for the environment as well as for the health. By applying the risk assessment process over here and finding out the hazards and risks associated with the land filling of the hazardous wastes it has been noticed that many governmental and non government organizations are working for the elimination of such wastes from the populated areas so that the people are not affected by the risks associated with these hazardous wastes. There are many contamination problems that are caused as a result of this land filling. New diseases and viruses are becoming common because of this pollution. There are two kinds of risks that can be caused by the land filling of hazardous wastes. One of the type of the risk is the risk of exposure; this type of risk harms the people depending on how closely they are exposed to the hazardous waste and the other type of risk is the risk of injury which depends on how much poisonous that substance is for the health of the people. By observing such dangerous risks it is becoming necessary for the government as well as for the people to control the land filling of the hazardous waste so that serious harms can be controlled. (Hazardous waste, 1, n.d)
Dallas Brozik, The nature of risk (no date) http://webpages.marshall.edu/~brozik/riskweb.pdf Accessed January 3, 2009
Emek Tuzun, With RISK- Web based risk management tool for software projects (no date) http://www.withrisk.com/withrisk_project/risk_management/software_development_projects/risk_definition.php Accessed January 3, 2009
Five steps to risk assessment (2006) <http://www.hse.gov.uk/pubns/indg163.pdf.> Accessed January 3, 2009
Hazardous wastes (no date) <http://www.epa.gov/superfund/students/clas_act/haz-ed/act07.pdf Accessed January 3, 2009
Risk and diversification: different types of risks (no date) <http://www.investopedia.com/university/risk/risk2.asp> Accessed January 3, 2009
Risk definition (no date) http://www.businessdictionary.com/definition/risk.html Accessed January 3, 2009
S Jyot, What are different types of risks? (no date) http://www.allinterview.com/showanswers/1717.html Accessed January 3, 2009