Risks may be classified in different ways, depending on the type of business you do, and the approach that you have taken to risk management. For starters, though, we may just define them as hazard risks, control risks and opportunity risks.
Hazard risks
These are the risks that you do not want to happen at all. They are threats to the success of your business. Hazard risks include health and safety incidents and operational risks like theft, fraud and process bottlenecks. Your aim is to minimize the probability that these risks will occur and to reduce their impact on your business.
Control risks
Control risks are sometimes called ‘uncertainty risks’. These risks may affect project-based activities in particular. With control risks, the challenge often is to manage timelines, budgets and expected benefits within a range that the business can tolerate.
Opportunity risks
Opportunity risks are those risks that your business will deliberately take because of the likely benefits associated with them. These include investment decisions and strategic moves such as business expansion and product diversification. Opportunity risks often have a ‘flip-side’ or chance of failure.
Effective risk management will help you to mitigate hazards, manage uncertainty and optimize opportunities.
WINR Risk Consultancy 