RISK MANAGEMENT

Importance of Risk Management in Events

Importance of Risk Management in Events

Introduction

Risk management is the process of adoption and implementation of management decisions aimed at reducing the likelihood of an unfavorable outcome and minimizes potential losses resulting from its implementation. Modern economics is a risk as a probable event, resulting in the onset of which can occur only at neutral or negative effects. (If the event requires the presence of both positive and negative results, and in separate publications called speculative risk, it is examined by experts are not in good faith (Alexander, Carol, et al, 2005, p. 47). These events (and not the event) have a dual nature, and always can be separated by "chance" (estimated event that can bring someone usefulness, benefit, profit) and the "risk" (the alleged event that can bring someone harm, loss) (Alexander, Carol, et al, 2005, p. 36). Dual events can be associated (implementation of a chance may entail risk or vice versa), mutually exclusive (chuck) or independent (implementation of chance and risk are not independent of each other, as determined by the circumstances and uncertainty). That is why, in order to create a coherent system of views on risk management should recognize the risks clear, and certain dual event as "speculative" to expose the re-analysis) (Alexander, Carol, et al, 2005, p. 36).

In ideal risk management are treated for one thing, the risks related to a big loss and a great chance of happening, but the risks with low probabilities of occurrence and lower loss are handled with a lag. In practice the process can be extremely complex, in fact, risks with high probability of occurrence, but with low loss, and risks with high loss but lower probability of occurrence, may be poorly governed (Alexander, Carol, et al, 2005, p. 47). Risk management is often faced with the difficulty of properly allocate resources, and this concept is called opportunity cost. Time and resources spent on risk management may be spent on more profitable activities. Moreover, the ideal risk management spends the least amount of resources needed in the process of reducing the negative effects of risks. The opportunity cost (or marginal cost) differs from the monetary cost because it includes not only the money to buy the asset but also the value of time spent to consume it, the expectations and lost opportunities. If an asset has no cost, however, can always have an opportunity cost (Alexander, Carol, et al, 2005, p. 36).

As is known that due to the increase in criminal activities, as well as terrorism, risk management has become an increasingly important aspect at events. Therefore, this paper would focus on critically evaluating the importance of risk management at different events.

Critical Evaluation of the Management of Risks at Events

It happened in history that ever since ancient times, all sports have been a time of peace and tranquility. Even in ancient Greece during the Olympic Games was declared a sacred truce that has become a tradition for many ...