**2.2. Risk – Threat and opportunity**

254 Risk Management – Current Issues and Challenges

each time, to gain control over it.

*in terms of probabilities*."

*organization to achieve its planned goals.*2 *"* 

probability and consequences.

development, regardless of the domain of activity.

opportunities.

following:

or

or

**2.1. Conceptual approaches for risk** 

In general terms, risk is part of any human effort. Once we leave to go back home, we are exposed to risks of different levels and degrees. It is significant that some new risks are

The word *"risk"* derives from the Italian word *"risicare"*, which means *"to dare"*. In this sense, *the risk is a choice, not fate*1*.* From this definition it follows that the risk is not an option, but we are permanently exposed to risk in everyday life, what is really important is that

Nowadays there is no unanimously accepted definition of the concept of risk by all specialists in the field. Among the most commonly used definitions, we present the

*"Risk is the possibility of obtaining favorable or unfavorable results in a future action expressed*

*"Risk is the threat that an event or action to affect in a negatve manner the capacity of an*

a. Probability versus consequences. While some definitions given to risk focus only on the probability of the occurrence of an event, other definitions are more comprehensive, including both the probability of risk manifestation and the consequences of the event. b. Risk and threat. In defining the concept, some experts have put an equal sign between risk and threat. We specify that a threat is an event with a low probability of manifestation, but with high negative consequences, since the probability of manifestation is difficult to assess in these cases. A risk is an event with a higher probability of occurrence, for which there is sufficient information to rate the

c. Comparing only negative results. Some concepts about risk are focused only on negative events, while others take into account all variables, both threats and

d. Risk is related to profitability and loss. Achieving the expected result of an activity is under the influence of random factors that accompany it in all stages of its

completely voluntary, and some are created by us through the nature of activities.

"*Risk is a possible future event whose production could cause some losses*."

The analysis of these definitions of risk gives rise to the following conclusions:

Internal and external environment in which the organization operates generate risks. In these circumstances the organization should identify its weaknesses and threats it faces, in order to manage and minimize them. Also, strengths must capitalize and exploit opportunities.

In this respect, designing and implementing a risk management process at corporate level, is appropriate and necessary due to uncertainties of threats in achieving organizational goals.

Integrated Risk Management System – Key Factor of the Management System of the Organization 257

Risk management is a preventive attitude on the elimination or limitation of damages, if any possibility of a risk materializing, namely a process of identifying, analyzing and

In these conditions, the role of risk management is to help understand the risks the organization is exposed to, so that they can be managed. This role varies depending on



The advantage of implementing the risk management system within the organization is to ensure economic efficiency. To achieve this requirement, the organization's management has the responsibility to make known the risks they face and manage them properly, in

Risk management is the responsibility of the organization's management, and the central objective of this process aims the risks management so that resources to be used efficiently and effectively in order to maximize profit and minimize threats, while safeguarding the







In this respect, the entity's management must act in the following directions:

concerning the implementation of risk management process;

continuous improvement of risk management process;

**2.3. The importance of risk management organization** 

responding to potential risks of an organization.

order to avoid consequences for their materialization.

**2.4. Responsibility for risc management** 

organization and also the types of risk;

interests of employees and customers.

assessment system;

system accompanying activities.

when the analysis is done, as follows:

the occurrence of this event;

The implementation of this concept leads to certain changes within the organization, whose effects should be materialized through a better use of available funds and obtaining levels of profitability planned, namely:


Risk management is characterized by the establishment and implementation of concrete activities and actions of identification and risk assessment leading to determine the risk level and by this act to implement adequate internal control devices to limit the probability of the risk occurring or the consequences if the risk materializes. The process must be coherent, integrated to the objectives, activities and operations carried out within the organization.

The staff within the organization, regardless of the current hierarchical level, should be aware of the importance of risk management to achieve planned results and to form necessary skills in order to perform monitoring and control based on principles of efficiency and effectiveness.

The functional structures responsibles within the organization have the task to identify and analyze regularly the risks related to their activities, to propose and substantiate appropriate measures in order to limit the possible consequences of risks and ensure approval by decision makers within the organization.

Practice3 recommends that any organization needs to manage its risks, because in many cases the occurrence of risks can have serious consequences upon the activities, sometimes these consequences jeopardizing the very existence of the organization4.

The complexity of risks and their increase has led organizations' management to understand that it is better to manage a risk than to cover a loss. Based on this requirement, many organizations have proceeded to implement risk management, developing specific strategies that have defined the organization's behavior towards risk and risk management arrangements.
