Abstract
Today's companies are facing frequent fluctuation in their social, politics, economics and natural environments, which significantly increased complexity in management function. In such a high risk environment planning, coordinating and control of a company's functions is a very challenging duty for management teams. Regardless of the source this kind risks are dealt with by operational risk management process. The operational risk management has been applied mostly in financial institutions, particularly in the banks until near past. Nevertheless, the companies that are non-financial have to also use operational risk management techniques to continue properly their operations. The purpose of operational risk management can be defined as enhancing hazard identification in the operational environment in order to eliminate risks or reduce them to an acceptable level. In this chapter will be discussed the methods and techniques could be used for the operational risk assessment in manufacturing industry.
TopRisk Concept And Risk Types
Although there exists no generic definition recognized by all parties, risk still can reasonably termed as any potential threats and adversities that might emerge in future and hinder reaching the objectives or else any opportunities that might facilitate achieving the objectives. In Risk Management Standard, risk is defined as the probability of the materialization of any given event and combined result of its impact and risk management has been treated with respect to both negative and positive aspects.
Hopkin (2010) in his study combined risk definitions suggested by several organizations and included into this list his personal risk definition as an alternative option (Table 1).
Key Terms in this Chapter
Risk Management: Risk management is a managerial process that includes identification, analysis, assessment and control of risks which are exposed.
Risk Priority: Deciding right precedence of risk to assign risk management resfigources.
Risk Analysis: As a step of risk management process, it consists of identification of possible negative external and internal conditions, events and determination of cause-and-effect (causal) relationships between probable happenings, their magnitude, and likely outcomes,
Risk Assessment: The identification, evaluation, and estimating of the levels of risks that is involved in a situation.
Risk: A probability or threat of hazard, damage, loss, or any negative event that is caused by vulnerabilities.
Operational Risk: Risk of loss resulting from inadequate or failed processes, people and systems or from external events.