In all but the smallest organizations, decisions of one sort or another are made at various levels and by many people.
Since every decision is partly a decision about risk, organizations delegate the responsibility for risk management and the authority to make risk decisions (for short, “delegate risk”) in the same way they delegate decision-making authority.
“Likelihood” is one of those words, like “risk” itself, that appears repeatedly in the risk management literature but casts as much shadow as light on the subject. In this article, we’ll see that likelihood is a probability, and why it is sometimes best expressed as an expected frequency of occurrence.
A recent article in the Harvard Business Review advocates explicitly modeling risk as part of evaluating a firm’s strategy options. Businesses today face an ever-increasing range of risks. Managing risk is itself a strategy; one becoming vital to more firms. FAIR is a natural vehicle for evaluating any kind of operational risk.
FAIR can be extended to the analysis of risk scenarios that have multiple impact variables, such as in public safety. This post reports lessons learned from a simple model inspired by an Amtrak crash.
