Abstract :
Business and Government must act positively in an increasingly risky environment. In particular, when making a decision, it is important to consider whether its prospective benefits justify the risk of failure. Risk analysis can contribute to answering this question, so helping to ensure that an organisation takes only the right risks and gains control of its overall exposure to risk. This paper reviews some of the ways in which risk analysis can aid the decision maker in assessing and managing risk. Topics covered include the identification of risk areas, approaches to risk assessment, strategies for risk reduction and control, and the limitations of risk analysis. As a practical example of how risk analysis can be applied, an approach to the risk screening of projects is described. This is based on a method developed by the PA Consulting Group to assess the level of risk it takes on when tendering for consultancy work; the higher the perceived risk, the more scrutiny given before a proposal can be approved for submission. The benefits of this approach are discussed
