Types of risks
The risk may have positive or negative outcomes or may simply result in improbability. Therefore,
risks may be considered to be related to an opportunity or a loss or the incidence of uncertainty for an organization. Every risk has its characteristics that require particular management or analysis. Below risk, categories are mentioned as so far
• hazard (or pure) risks;
• control (or uncertainty) risks;
• opportunity (or speculative) risks.
It is important to note that there is no ‘right’ or ‘wrong’ subdivision of risks It is, perhaps, more common to find risks described as two types, pure or speculative. Indeed, there are many debates about risk management terminology. Whatever the theoretical discussions, the most A significant issue is that an organization adopts the risk classification system that is most appropriate for its circumstances.
Certain risk events can only affect in negative results. These risks are hazard risks or pure risks, and these may be supposed of as operational or insurable risks. In general, organizations will have a tolerance of hazard risks and these need to be managed within the levels of tolerance of the organization. A good example of a hazard risk faced by many organizations is that of theft.
Certain risks give growth to uncertainty about the outcome of a state. These can be defined as control risks and are frequently related to project management. In general, organizations will have a repugnance to control risks. Uncertainties can be related through the benefits that the project produces, as well as uncertainty about the delivery of the Project on time, within budget and to specification. The management of control risks will often be undertaken to certify that the outcome from the business activities falls Within the anticipated range.
At the same time, organizations purposely take risks, especially marketplace or commercial risks, to achieve a positive return. These can be measured as an opportunity or speculative
risks and an organization will have a specific taste for investment in such risks.