Risk management process - Essay Example

This paper gives a critical analysis of a diagrammatic representation of the steps of risk management. This is achieved in conjunction with a detailed evaluation of the journal article “Understanding Risk Management in Small 7 Steps” (Mazareanu, 2011). Figure 1 below presents the 6 major steps in risk management. Nonetheless the article “Understanding Risk Management in Small 7 Steps” breaks down the steps of risk management process into seven small steps. It is however notable that the journal article describes the major areas in risk management sufficiently in scope (Mazareanu, 2011).

In accordance to Fig 1 above, the process of risk management begins with the assessment of risk. Mazareanu (2011), in the journal article, describes this stage as the assessment of vulnerabilities. Nonetheless this translates to the same meaning. Therefore the risk management process begins with the assessment of both internal and external factors which makes individuals or organizations vulnerable to risk. In the assessment of risk, it is necessary to consider the assets that are at stake and the level of vulnerability that they are exposed to incase of a disaster, accident or failure (Burnaby & Hass, 2009).

The diagram shows that after the assessment of risk, the process of risk management is followed by the development of goals and objectives of the management process. These goals and objectives acts as a roadmap against which the processes of risk management are measured (LAbbate, 2008). Fig 1 illustrates various considerations in the design of objectives and goals of the risk management process. Firstly, policy issues must be considered because they have a direct effect on the implementation of the risk management processes and project.

Secondly, the standards for cleanup are designed. These are the guidelines which limit the extent to which risks are