The Importance Of Risk Assessment

Introduction

Risk assessment is a compulsory and systematic method that enables people to analyze and assess the occurrence, impact, and consequences of a certain risk (Gemeni et al, 2011; p.477). The core purpose of conducting a risk assessment is to ensure that adequate measurements are taken to minimize the risk that could harm the individuals, assets, and environment from natural nor unnatural phenomenon (Aven & Renn, 2009, p 587). Aven & Renn (2009) argues that risk management is all about trying to balance the benefit and cost of trying to reduce the risks for safety reason. In a typical traditional risk assessment, the risk management would concise of measurements to reduce or remove the threats or, if inevitable, limit the potential

This is due to the fact that qualitative risk assessment is a relatively more subjective assessment of the risk, which can be more accustomed to the circumstances, processes and needs from the assessment. Quantitative assessment can also be useful, as we obtain all the data from multiple parameters that we can comprehend and categorize within certain criteria. Nonetheless, Strukton’s risks and problem are relatively much more uncertain, complex and dynamic than most. This is due to the fact that they operating in many field or expertise and departments (finance, legal, civil and environment). The impacts of one cannot be totally separated from another. Its complexity, distinguished and specialized field or work would require an expert judgment to reduce the risks and uncertainty (Aven & Renn, 2009, 595). The issue with using quantitative risk assessment to analyze Strukton’s position is the fact that quantification often requires the assessor to simplify and assume in order to be able to create a mathematical figure or data from it (Aven & Renn, 2009, p 595). This might hinder them from taking into account some of the more significant aspects/risks that a complex and dynamic organization like Strukton might care more about. The involvement of qualification would allow experts opinion to serve as a

Furthermore, they also argue that no risk assessment can be conducted without implementing parts of a quantitative assessment (Aven & Renn, 2009, p 588). On the other hand, there are also several arguments that promote the fact that quantitative risk assessment can also be beneficial for Stukton. The main benefit of a quantitative analysis that Strukton’s does not acquire is: the possibility for quantitative risk assessment to take thousands of scenarios, risks that could have happened or fail (Apostolakis, 2004, p 517). Such an enormous potential failure cannot be identified and analyze using Strukton’s qualitative-oriented analysis as they would only focus on the core aspects and potentially harmful risks. Apostolakis (2004) argue that a quantitative risk analysis can provide a common understanding of the risks and issues presented. These data can also be easily acknowledged and understand by the various stakeholder involved. The analysis for Stukton is targeted for the management of Strukton and might not be of important or informative to several of the other stakeholder groups (p 517). The aspect of risk assessment that a traditional and the majority of risk assessment possess that Strukton’s does not, is the probability or and uncertainty identification of a certain risk. The majority of Strukton’s assessment is based on expert’s opinion