Abstract
People fear uncertainty as it leads to risk in the pursuit of their journeys, where they seek success. The authors articulate that opportunity lies beyond risk, encouraging individuals and business organizations to take calculated risks. In this chapter, the authors will show how risk-based decisions become more feasible when the decisions are made in light of risk assessment tools available to business organizations. The chapter will orchestrate the impact of risk assessment tools (qualitative, quantitative, and hybrid risk assessment tools) on organizational effectiveness given their perceived benefits in the information technology industry in India.
TopRisk Assessment And Organisational Effectiveness
Risk assessment & management articulates the need for effective decision making with regard to identifying and mitigating risk scenarios for business entities to achieve their predetermined goals. Combination of risk management with sustainable decision making has garnered significant consideration and contributions from researchers in a variety of disciplines. It includes risk decision making under risk which is mostly attributed to risk assessment tools. Arias & Stern, (2011) reviewed that risk assessment tools are effective with different applications in mitigating risk elements in projects. Hull (2010) also emphasized the role of a deterministic risk management approach in illustrating and understanding a company’s risk appetite. The following review of literature will further visualize the importance of risk assessment and management from different perspectives. Yue, et al (2021); Heyerdahl, A. (2022) also opined that risk assessment is a crucial component of effective and successfull policy compliance under crisis situation.
Callahan & Soileau (2017) ideated that enterprise risk assessment and management systems are designed to reinvigorate achievement of entity objectives, wherein firms with higher levels of enterprise risk assessment and management are characterized by higher operating performance compared to their competitors utilizing performance metrics related to earnings.
CGMA (2016) enunciated that risk assessment tools render decision making a superior exercise, such that it enhances organizational competitive position, it's brand’s reputation, quality of its people and its intellectual capital. Further Raghunath & Devi (2018) articulated in their study that it is inevitable and imperative for organizations to try different combinations of risk assessment models to mitigate risk scenarios and enhance risk based decision making, which paves way for organizational success.
Key Terms in this Chapter
Perceived Benefits: These are the perception of positive consequences that an organisation expects as the outcome of its actions.
Risk Assessment: The process of evaluating and appraising existing measures of security and controls by assessing their adequacy in response to the impending threats faced by the organization, so as to identify, evaluate, and report them periodically.
Risk Assessment Tools: Tools developed to assess risk for particular outcomes that helps in evaluating and appraising the efficiency of risk assessment.
Risk Factors: Variables/components that lead to unexpected variation in results.
Organisational Effectiveness: Organisations ability to produce desired results as per the established parameter of performance.
Risk: The possibility of unexpected variation in the expected results is called risk.
Risk Management: The process of assessing and evaluating the various internal and external threats within organisation, so to mitigate them and bring stability within organisations.