What is Risk Management and Why is it Important?

Running head: RISK MANAGEMENT
RISK MANAGEMENT
Name of the Student:
Name of the University:
Author note:

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Table of Contents
Introduction to the project:..............................................................................................................2
Introduction to Risk Management method......................................................................................2
Application of Risk Management Process to the project.................................................................3
Establish context..........................................................................................................................4
Risk identification........................................................................................................................4
Risk analysis and Evaluation.......................................................................................................6
Risk treatment (Treatment Strategy, Treatment Plan and Contingency Plan).............................7
Waterfall Model of Risk Analysis...............................................................................................8
Monitoring and review................................................................................................................9
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

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Introduction to the project:
The chosen case study for the project deals with the management of community in the
country of New Zealand in the terms of tourism sector. Tourism is one of the greatest aspect of
making money in business. A huge part of the revenue obtained by the country’s government is
obtained from the tourism sector. The aim of the tourism sector of New Zealand is to attract
more and more foreign people in the country such that the economy can be boosted. The
community and tourism however has certain issues which has to be addressed while the business
is taken into consideration. The following report will discuss about the Risks that are associated
with the tourism sector and the project management in an organization, along with how those
risks can be mitigated in the tour and traveling company.
Introduction to Risk Management method
• Risk management is the process by which the risks in the organization regarding a
particular system, individual or a process can be obtained. The process of risk
management consists of the identification of the risks, evaluation of the identified risk
and lastly prioritization of the risk. There are numerous risk that can be identified in the
organization which includes
• Systemic Risk: This is the risk into an organisation which can be responsible for
catastrophic results in the business. This may completely collapse and industry or a
business. The systemic risk is the factor responsible for the financial crisis in the year of
2008.
• Enterprise Risk: These are the risks that can harm the organisation or the enterprise. This
harm the system or the organisation potentially.

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• Complex Systems: The Risk of the understanding the complex system of the
organisations is one of the greatest risk. Without appropriate knowledge of the
technology, gaining control over the complex system is completely impossible.
• Project Risk (Operational Risk): Project Management is one of the important stage in
development of a new system in an organisation. The risk in the project is also termed as
the operational risks which is the result of the failure of the system, not only that, the
fraud in the system, any other criminal activities are the results of the operational risk in
the system.
• Health and Safety Risk: The health and safety risk of any sector includes anything that
can affect the workers’ health or hamper the security of the organisation. This may
include hazardous chemical which can cause damage to the employee, behaviour of other
employee, fire hazards and many others.
Almost all the project or the organization has to go through this process of risk
management in order to identify the risks in the organization, such that the contingency plans can
be developed for the mitigation of the identified risk.
Application of Risk Management Process to the project
The process of risk management is considered to be one of the most significant step in the
project management. With the help of this [process, the risk in the tourism sector can be
identified, evaluated and the mitigation process can be obtained. For understanding the priority
of the risk in the organization or the sector, a matrix is developed. This matrix helps in
identifying the most important risks which needs immediate attention in the organization. Once
the risk is identified the mitigation for the risks are determined as well.