Investment activity

What is the most important risk from your point of view?

RISKS MANAGEMENT

Risks management is one of the problems solved in the framework of projects management. This problem is not «isolated» from other func­tions of the projects management. Problems connected with protection of project participants against different risks are solved during determina­tion of financial needs, calculation of the estimate cost and budget, preparation of contracts, control over the project implementation. As risks occur at all stages and phases of the project activity, function of the risks management does not disappear until the project is closed.

Risks management is very complicated because the number of project risks is very big and risks management covers almost all other aspects of the project management activity. In risks management the following issues deserve a close attention:

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  Project risks classification
  
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  Methods of project risks assessment
  
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  Information provision of project risks management
  
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  Monitoring and forecast of risks
  
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  Methods of risks elimination
  
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  Assessment of risks management efficiency.
  Risk management contains the following stages:
  
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  Risk identification
  
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  Risk assessment
  
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  Selection of the method and tools of the risks management
  
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  Risks prevention and risks control
  
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  Risks financing
  
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  Assessment of results
  

First two stages are called risk analysis. Risk identification is con­sidered to be a qualitative analysis, risk assessment is a quantitative analysis. The stage which is called «selection of the method and tools of the risks management)) is very important. Terms «method» and «tool» are quite different. «Method» is used in a wider sense than «tool». In the framework of the selected method it is possible to use concrete tools. There are four main methods of risks management: 1) risk elimination; 2) risks prevention and risks control; 3) insurance of risks; 4) takeover of risks.