Concept of Risk
Concept, Sources and Type of
Risk
Toga B. Simatupang
SE, MM, CPLHI, CICA, RFP
PPAK Univ. Trisakti – Risk Management
Origin of Risk
• Arabic word : Risq “anything that has given to you (by GOD) and from which you draw profit”
• Latin word : Riscum “unfavourable event”
• French word: Risque “nothing venture nothing gained” • English word : Risk
chance of negative outcome
unexpected outcome
chance of bad consequences
hazard, loss, etc
Definition of Risk
“the likelihood of something undesirable happening.”
“the potential for unwanted negative consequences of an event or activity”
The word of ‘risk’ is often perceived in a negative way. However, managed in the correct way prevailing risks can often have a positive impact
Risk: the effect of uncertainty on objectives
ISO 31000: Risk Management - Principles and Guidelines
Concept of Risk
Most people think of risk in terms of 3 components:
Something bad happening
the Chances of it happening
the Consequences if it does happen
“Risk affects every aspect of human life.”
Concept of Risk
UNCERTAINTY
EFFECT
PROBABILITY
PROBABILITY
DISTRIBUTION
Risk parameters
SUSCEPTIBILITY
to change
SEVERITY of
Impact
RISK
DEGREE OF
INTERDEPENDE
NCY with other factor of Risks
PROBABILITY OF
OCCURENCE
Uncertainties
• Risk : The uncertainty associated with estimates of outcomes
• Risk is an unwanted implication of a phenomenon being uncertain
• Uncertainty exists when there is more than one possible outcome of action but the probability of each outcome is not known.
Risk awareness
“There are known knowns.
these are things we know that we know. There are known unknowns.
that is to say, there are things that we know we don't know.
But there are also unknown unknowns. there are things we don't know we don't know.”
Donald Rumsfeld
Video: undesirable happening
Risk awareness
“If you can’t manage risk, you
Risk
Toga B. Simatupang
SE, MM, CPLHI, CICA, RFP
PPAK Univ. Trisakti – Risk Management
Origin of Risk
• Arabic word : Risq “anything that has given to you (by GOD) and from which you draw profit”
• Latin word : Riscum “unfavourable event”
• French word: Risque “nothing venture nothing gained” • English word : Risk
chance of negative outcome
unexpected outcome
chance of bad consequences
hazard, loss, etc
Definition of Risk
“the likelihood of something undesirable happening.”
“the potential for unwanted negative consequences of an event or activity”
The word of ‘risk’ is often perceived in a negative way. However, managed in the correct way prevailing risks can often have a positive impact
Risk: the effect of uncertainty on objectives
ISO 31000: Risk Management - Principles and Guidelines
Concept of Risk
Most people think of risk in terms of 3 components:
Something bad happening
the Chances of it happening
the Consequences if it does happen
“Risk affects every aspect of human life.”
Concept of Risk
UNCERTAINTY
EFFECT
PROBABILITY
PROBABILITY
DISTRIBUTION
Risk parameters
SUSCEPTIBILITY
to change
SEVERITY of
Impact
RISK
DEGREE OF
INTERDEPENDE
NCY with other factor of Risks
PROBABILITY OF
OCCURENCE
Uncertainties
• Risk : The uncertainty associated with estimates of outcomes
• Risk is an unwanted implication of a phenomenon being uncertain
• Uncertainty exists when there is more than one possible outcome of action but the probability of each outcome is not known.
Risk awareness
“There are known knowns.
these are things we know that we know. There are known unknowns.
that is to say, there are things that we know we don't know.
But there are also unknown unknowns. there are things we don't know we don't know.”
Donald Rumsfeld
Video: undesirable happening
Risk awareness
“If you can’t manage risk, you