Risk Management in the Global Economy and outlook for 2017

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Risk management in the global economy is a highly challenging field for risk managers from any part of the world. With most of the world’s countries almost becoming part of the global economy in this era of globalization; it is emerging that risks that apply to one part any one nation’s or group of nations’ economy could affect many more in a chain reaction, or domino effect.

The Judge Business School of Cambridge University, in its estimate for risk management in the global economy for 2017, has a rather bleak outlook for the global economy. The report analyzes that no fewer than 25 dozen of the world’s urban centers could face close to two dozen different kinds of major shocks of primarily an economic and also of a political and social nature.

risk-management-in-global-economy-and-outlookThis is going to likely impact these important nodal cities of the global economy to the extent that the world’s GDP is going to shrink by as much as 1.5% percent till 2019. This translates to something in the order of $ 1.2 trillion.

Factors determining risk management in the global economy in 2017The report pins down a few important factors that have contributed to the need for risk management in the global economy in 2017:

    • The world is producing more than it ever did in its history. This is because of the high level of human population, which is the highest ever recorded in history, and the economic, agricultural and industrial growth of many underdeveloped economies
    • There has been an unprecedented increase in crises and disruptions in the geopolitical, financial and technological fronts, making risk management in the global economy for 2017 an important area to be addressed by the political and financial leaders around the world


  • The financial sector has come under greater strain in the past few years following the slowdown of 2008 than it had in the few preceding ones, making the prospect of a global meltdown any time in the future a possibility, if not a certainty
  • Added to these, risk management in the global economy for 2017, like in any other year, does face prospects that are of a natural order, such as natural disasters and wars.
Global economy will bear the brunt

risk-management-in-global-economy-and-outlookAll these factors would not have had the same impact as they are likely to have in the current scenario and in the immediate and intermediate future, if not for globalization. The world’s shift towards globalization is now certain and irreversible. The interconnected nature of the global economy has ensured that a shock in one part of the global economy is sure to cause ripples of either a minor or major nature in any other part.

Other important factors for risk management in the global economy in 2017risk-management-in-global-economy-and-outlook

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Benefits of Risk Management in all Industries

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The benefits of risk management can be felt across all industries. Risk management is a process that needs to be applied if the risks have to be mitigated and contained, if not fully eliminated. The benefits of risk management in all industries came into greater focus following the financial debacle of 2008.

Firstly, why does an organization need to implement risk management strategies? Simple: Risks can offset the potential benefits and convert them into drawbacks. The benefits of risk management in all industries always outweigh the drawbacks of non-implementation of risk management strategies. In addition to helping the upper management get a better idea of the state of affairs of the company, benefits of risk management in all industries also help to reduce the financial burden for the organization and to meet regulatory requirements.

benefits-of-risk-managementIt needs to be understood that risk management is a set of processes that need to be implemented extremely stringently and diligently at every possible stage. Risk management is a journey, not a destination. For the benefits of risk management in all industries to be felt thoroughly, it is important to understand that it is intuitive.

Each industry has its unique risksRisk management is not a standard set of processes or exercises that can be applied into every industry. For example, the benefits of risk management in the finance sector could be different from those of the manufacturing industry. Likewise, the benefits of risk management in all industries in the life sciences sector could be way different from the risk management that is implemented in say, human resources.

benefits-of-risk-managementYet, even though the dynamics of risk management are different across all industries and are unique to each of them; the benefits of risk management in all industries are there to be felt and experienced.

Look out for the sleeping monstersEven though risk management is implemented in accordance with its own set principles or standards; there is still a possibly that some risk that was not obvious at an earlier stage could spring an unpleasant surprise later. This makes the benefits of risk management in all industries all the more worthy of consideration.

If the benefits of risk management in all industries need to be felt; the most important quality for risk managers is to inculcate the ability to see what is called the “unknown unknowns”. In simple terms, this is a phase used to describe the ability to foresee beyond the known factors.


The ability to see beyond the obviousA few factors could become manifest in clear ways, but it is the obscure and latent ones that need greater attention. It is not always possible for even the most farsighted business risk manager to sometimes grasp the dormant risks that could crop up out of nowhere and pose a threat to the business. Developing this ability helps to realize the full benefits of risk management in all industries, because this is a quality of risk management that is common across all industries.

benefits-of-risk-managementIn order to realize the benefits of risk management in all industries fully, risk managers need to be on their guard all the time. This is obvious and goes without saying, but in the light of the fact that some risks can become enormous and uncontrollable at later stages, it is best for risk managers to understand ways of deriving the benefits of risk management in all industries.


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Ways of managing risk in construction projects

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The ways of managing risk in construction projects need to be drilled down into the systems that are used in construction projects. Managing risk in construction projects entails not just ensuring the physical safety of the workers involved in the construction project, but goes much beyond.

Projects that are executed on time and in compliance with safety regulations go a long way in contributing to the creation and building of infrastructure projects that are vital to an economy and for ensuring the smooth movement of goods and services and the overall conduct of life for people in the country. On the other hand, delays and cost overruns in construction projects, which are a direct result of not managing risk in construction projects, set the project backwards, leading to higher cost on the project, added labor costs and delays in implementing infrastructure.

Inherent risks in construction projectsA proper grasp of the inherent risk is often the first means to managing risk in construction projects. Some of the risk factors in construction include:


Implementing risk management in construction projectsIn line with risk management principles laid out in many other industries; managing risk in construction projects also involves taking a few steps and implementing processes and safety standards.

It is important to note that like in many other industries, when managing risk in construction projects, one has to take the important factor of variables into consideration. That is, risk factors keep changing over the duration of the project, meaning that risk factors are hardly ever static.

The process of managing risk in construction projectsLike in most other industries in which systematic application of risk management principles is called for; managing risk in construction projects also requires professionals in this industry to do the same. The steps start with:

Risk assessmentBeing the foremost among the means of managing risk in construction projects; risk assessment is a comprehensive set of steps which starts with understanding the hazards. Hazards, as we know, are all pervasive in the construction industry, and are the precursors to a risk. While a hazard is the possibility of an adverse event; a risk is the actual occurrence of that event. So, managing risk in construction projects involves looking at the issue from the hazard stage.

It involves the following:

Risk assessment:

Project controls:
Risk mitigation

managing-risk-in-construction-projectsViewed from the overall perspective of ensuring safety and quality and also in view of the importance of the industry to the economy; managing risk in construction projects is a major exercise that needs to be handled with care and precision.


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How is Risk Management Important to Project Success?

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The answer to how risk management is important to project success is best illustrated by the fact that no project has ever succeeded without proper risk management. In other words, project management into which risk assessment has not gone in is as good as a doomed one.

Risk management’s importance to project success can never be overstated. Success at any project is unthinkable and unimaginable without proper and critical risk management. Risk management is a means by which the risks that accrue into a project are foreseen, assessed and mitigated, so that the project does not run into hitches at later stages, from where it would be all but impossible to rectify the same.

Understand what risk is, first

risk-management-important-to-project-successThe answer to the question of how risk management is important to project success has to start with a basic understanding of risk. In the context of project management, risk, as we all know, is the occurrence of a danger or an unwanted, undesired event in a project. It succeeds or is the next stage of a hazard, which is described as the potential for or the possibility of an event to cause danger.

How risk management is important to project success is to be understood from the standpoint of the fact that absolutely every activity, not only something concerning project management, has a risk. There are risks in simple and completely mundane activities such as brushing one’s teeth or putting a baby to sleep.

Diligence and thoroughness are important elements of risk management

risk-management-important-to-project-successIn order to manage a project successfully, the first step is carrying out risk management thoroughly and diligently. Risk management, if done properly, is the first and most fundamental aspect of success in a project. It is mainly about taking identifying, analyzing and mitigating risks in a business vis-à-vis its strengths and weaknesses.

It is accepted in the discipline of risk management that risks cannot be completely eliminated. However, having a sound risk management plan helps to anticipate and be prepared for risks. The ways in which this is done mainly depends on the kind of project which the organization is carrying out, and the risk manager’s ability to understand it in its fullness and implement risk mitigation strategies effectively.

Palpable benefitsRisk management’s importance to project success is illustrated by the following benefits of carrying out a Risk Analysis:

The stages of risk managementGiven the importance of risk management to project success; it is important to understand and implement risk management in its stages:

risk-management-important-to-project-successPlanning:This involves understanding the importance of risk management to project success by planning the risk management in terms of its size. It is generally true that the bigger the project from the operational, logistical and financial perspectives; the greater the risk, and vice versa.

Preparing: The next stage of risk management is to prepare for it. The right knowledge of the project in all its detail helps project managers to prepare for any exigency and for taking steps to mitigate its effects.

risk-management-important-to-project-successMeasuring the result: Judicious and farsighted project managers measure the fallout of a risk management activity by what it fetches. If a risk management activity has accrued a certain expense that cannot be justified in the light of the benefit it brought, then such a risk management action is not effective and has not understood the importance of risk management to project success.

Evaluating the impact: A risk management plan may have been planned, prepared and executed very diligently, but risk managers ask what impact such an action had on the project, and eventually, on the organization. How many resources did it consume? How much time did it take? What kind of risk did it mitigate and what was the impact of this risk, had it been allowed to continue? These are some of the questions insightful risk managers ask. This perceptiveness is a result of their sharp understanding of how work management is important to project success.


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200+ followers. WOWWWWWW…

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Hello Everyone,

Today we have the pleasure of celebrating the fact that we have reached the milestone of 200+ followers on WordPress. Since we started this blog, we have had such a great time connecting with everyone.  we never expected to actually to connect with other people in the blogging community.

we are so incredibly thankful for each and every one of you who follows and comments on my blog posts. Please know that!

we would continue our blogging in these areas FDA Regulation, Medical Devices, Drugs and Biologics, Healthcare Compliance, Biotechnology, Clinical Research, Laboratory Compliance, Quality Management ,HIPAA Compliance ,OSHA Compliance, Risk Management, Trade and Logistics Compliance ,Banking and Financial Services, Auditing/Accounting & Tax, Packaging and Labeling, SOX Compliance, Environmental Compliance, Microsoft Excel Spreadsheet, Geology and Mining, Human Resources Compliance, Food Safety Compliance and etc.

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What is risk-based monitoring?

Sponsors of clinical studies adapt many methods that are aimed at reducing the complexity of clinical trials. They also look for methods by which they can increase the efficacy of the results, while keeping the costs low. Risk-based monitoring is one of these methods.

How is risk-based monitoring understood?One can understand risk-based monitoring in several ways. This varied understanding is because there is no one definition or application of this concept. Risk-based monitoring is a method of evaluating and preventing risk in a clinical trial. This broad definition of course, conceals more than it reveals, since risk-based monitoring can happen in a number of ways and can be applied in a number of areas concerning the clinical research.

FDA and EMA guidelines on risk-based monitoringIn 2011, the FDA, as well as the European Medicines Agency (EMA) their respective sets of draft guidance aimed at helping sponsors of clinical research get a better understanding of the regulatory requirements and obligations for the conduct clinical trials using risk-based monitoring. However, these guidelines were not specific. Moreover, they did not make any procedure or methodology or rule relating to risk-based monitoring mandatory. Since these guidelines on were more or less prescriptive and suggestive by nature; they did not address the core issue relating to risk-based monitoring, leaving the topic rather hazy.

Since this is the current state of risk-based monitoring regulations, most clinical trials sponsors have stuck to the traditional mode of risk-based monitoring. These generally include:

The importance of cloud technology to risk-based monitoringSince all these are generally disparate from each other; risk-based monitoring has now required more and more extensive use of technology that will enable his. Risk-based monitoring has now increasingly become technology-driven and technology reliant. As new technologies such as the cloud gain more acceptance; risk-based monitoring has grown with it, since it will help keep track of the various activities at various levels and helps integrate these in real time.


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