Risk Assessment, 2nd Edition

17 Assessing Operational Risks at an Organizational Level

Bruce Lyon

Brown & Brown

OBJECTIVES

• Introduce Organizational Risks
• Examine Elements within Organizational Risks
• Provide Guidance on Conducting Organizational Risk Assessments

17.1 Introduction

The world is ever changing, presenting new and oftentimes complex risks to businesses every day. In the globally connected and interdependent marketplace, risks are no longer isolated to a single location or entity. Risks that threaten the market, supply, or distribution chains for an organization, affect all parties. Some risks are known and accounted for in an organization’s risk management plan. But many risks remain hidden and unquantified, creating uncertainty and a potential for disruption and loss to an organization. Some of these risks left untreated can destroy key assets of an organization, damage its reputation, or prevent the successful achievement of business goals and objectives.

Previous chapters in this text have addressed risk assessment methods for functions within an organization such as its processes, systems, machines, workstations, and tasks. This chapter takes a broader view of risks at a more strategic level; specifically, risks that are capable of impacting an organization’s ability to stay in business. Done well, an organizational risk assessment gives management a clear picture of internal and external exposures to the organizations and enables decision‐makers in making better decisions.

An organizational ...