1. Risk Management
Presentation by Group 3:
2.Okedi Richard 2011-M104-40027
3.Okello George Patrick 2011-M104-40028
4.Musisi Diana Namubiru 2011-M104-40033
5.Ojara Levi 2011-M104-40043
6.Oketch Anthony 2010-M104-40029

2. Presentation Lay Out:
 Introduction
 Definition of risk
 Examples of risks
 Risk management defined
 The risk management process
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3. Presentation Lay Out cont’d:
 Strategies for managing risks
 Outputs of risk management process
 Conclusion
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4. Introduction:
 Every business has risks that can negatively affect the smooth
running of business activities. These risks should be
identified, mitigation measures outlined and a risk
management plan put in place.
 Risk management is central to business strategic
management.
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5. Definition of risk:
 Risk is the probability that a hazard will turn into disaster
(R.A.J. Roberts, 2010: 179).
 Risk is the probability or threat of damage, injury, liability,
loss or other negative occurrence that is caused by external
or internal vulnerabilities and that may be neutralized
through preemptive actions.
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6. Examples of risk:
 Financial risks like change in interest rates, default risks;
 Food security risks like drought, floods, epidemic pest and
disease outbreaks;
 Health risks e.g. epidemic disease outbreak;
Risks reduce the chances of success of any business and
therefore mitigation measures are of paramount importance
(R.A.J. Roberts, 2010:180)
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7. Risk management:
• Risk management is the identification, assessment, and
prioritization of risks followed by coordinated and
economical application of resources to minimize, monitor,
and control the probability and/or impact of unfortunate
events or to maximize the realization of opportunities.
• Risks can come from uncertainty in financial markets,
project failures, legal liabilities, credit risk, accidents, natural
causes and disaster as well as deliberate attack from an
adversary, or events of uncertain or unpredictable root
cause.
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8. Risk management continued:
• Several risk management standards have been developed
including the Project Management Institute, the National
Institute of Standards and Technology, actuarial societies,
and ISO standards.
• Methods, definitions and goals vary widely according to
whether the risk management method is in the context of
project management, security, engineering, industrial
processes, financial portfolios, actuarial assessments, or
public health and safety.
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9. The need for risk management by
organizations:
 Diversification, e.g. launch a new product or entry to new
markets. Competitors following you into these markets, or
breakthroughs in technology which make your product
redundant, are two risks to consider in such cases.
 Risk management helps you to identify and address the risks
facing your business.
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10. Need for risk management
continued
 Improves decision making, planning and prioritization.
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11. The risk management process:
 Methodically identifying the risks surrounding your business
activities;
 Assessing the likelihood of an event occurring;
 Understanding how to respond to these events;
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12. Risk Management process continued:
 Putting systems in place to deal with the consequences;
 Monitoring the effectiveness of your risk management
approaches and controls;
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13. Strategies of managing risk:
• Avoiding the risk through proper planning of activities in
which key risks are identified and mitigation measures put in
place;
• Reducing the negative effect or probability of the risk, or
even accepting some or all of the potential or actual
consequences of a particular risk.
• Identifying mitigation measures to reduce adverse effects of
disasters .
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14. Strategies of managing risks
continued:
 Transferring risks – insurance;
 Routine medical examination/avoiding exposure – health
risks;
 By avoiding certain activities e.g. MFIs only do lending and
avoid taking deposits, to avoid deposit risks;
 Doing nothing e.g. rural farmers, just endure drought and
plan to plant in the next season
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15. Outputs of risk management process:
 Improved decision-making, planning and prioritization;
 Efficient allocation of capital and resources;
 Improved forecast of what may go wrong, e.g. preventing a
disaster or serious financial loss;
 Significantly improved probability of delivering organization
business plan on time and to budget.
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16. Conclusion:
 Risks reduce the chances of success of any business and
therefore its important that organizations identify these risks,
suggest mitigation measures and put in place plans to manage
them.
 These will ensure sustained success and profitability of
business.
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17. References:
en.wikipedia.org/wiki/Risk_management.
http://www.businessdictionaery.com.
http://www.financecarriers.about.com.
R.A.J. Roberts, 2010. Agricultural Finance Year Book 2010:
Marrying Finance and Farming.
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18. References continued:
 Paige Baltzan and Amy Phillips (2008). Business driven
Information Systems. Mc Graw Hill.
 Stephen Haag and Donald J Mc Cubbrey (2002).
Management Information Systems, Information for age. MC
Graw Hill.
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19. END
THANK YOU FOR LISTENING
Questions ???
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