Risk_Management__Role_in_Justice_and_Security_Organizations

Risk Management: Role in Justice and Security Organizations Introduction Risk, as it applies to justice and security organizations means “the uncertainty of financial loss, the variations between actual and expected results, or the probability that a loss has occurred or will occur” (Broder, 2006, p. 3). Businesses and organizations all across the country have risk management programs in place to help minimize losses. Risk most often is associated with occurrences that have an undesirable outcome; referring to any potential hazard that a justice organization can suffer from. These are generally associated with three types of risk: personal, property, and liability (Broder, 2006). Justice organizations can be susceptible to human error, fraud, employee misconduct, environmental disasters and they need to be prepared by establishing a thorough risk management program that will help them answer the three most common questions: 1. What can happen' 2. How can it be prevented or how can we respond if it does' 3. If it does happen, who is going to pay for it' Risk Analysis and Assessment In preparing for a risk management program risk analysis must first be performed. This is a tool used by management to determine losses in whatever standard is acceptable or unacceptable by the organization. “This is process of distinguishing which risks can affect a business or institution, and who will be affected by the potential disastrous outcomes. Identification can involve various methods of analysis, depending on the situation or industry” (Risk Management, 1999). Risk analysis is accomplished by performing various tasks; the organization must first establish what assets might need to be protected. This could be people, money, products or processes. Secondly, identification of perils must be established; what kinds of things could happen within the organization' Certain types of perils could include employee misconduct, theft, fires, or any other kind of negative outcome event. Lastly, the organization must determine what kind of impact this will have; primarily financial (Broder, 2006). After these tasks have been completed, an assessment or evaluation can be done to determine the rational order in which things are placed in risk priority. What benefits does a properly performed risk analysis have on an organization' A strong, properly performed risk analysis has several benefits to a justice organization. First and most importantly, it enables the organizations to identify and understand the key areas that drive risk (Reiss, Young, 2006). For example, policies and procedures are put in place for police departments so that it can limit liability. It is not to say that something will not happen, but try and prevent the problem from happening altogether. Risk analysis ensures a clear understanding of whether the level of risk in a project is too great for the return on investment (Riess, Young, 2006). For example, if an insurance company were to tell the organization they could save a thousand dollars a year by implementing one particular thing; the company could look at the cost savings and determine if the cost of implementing the change would be worth the extra savings. Risk analysis also makes it possible for a more clear understanding the sensitivity of business decisions to alternative market and operational assumptions which in turn helps in the developing of robust strategies to cope with a changing market environment (Reiss, Young, 2006). Lastly, the most significant benefit that an organization can have with risk analysis is that it enables the organizations to make more informed decisions. If all the risks are clear, the organization has a much better chance at prevention. Conclusion Risk management is something necessary for organizations if they want to limit liability. Though certain objectives must be met in order to determine gains versus losses, the potential benefits to an organization can greatly outweigh the initial research. Knowing the perils that can happen to an organization and establishing best practices to try and prevent them are solutions to complex organizational problems. References Broder, J., (2006). Risk analysis and the security survey. Third edition. Elsevier Inc. Risk management. (1999). In Macmillan Dictionary of Toxicology. Retrieved from http://www.credoreference.com/entry/mactox/risk_management. Reiss, C., & Young, P. (2006). Risk and Reward in Local Government Management. (cover story). Public Management (00333611), 88(1), 10. Retrieved from MasterFILE Premier database.