Scribd
Upload
28 views8 pages

Module 3. rISK Evaluation

Module 3 focuses on risk evaluation, which compares risk analysis results with established criteria to determine acceptable levels of risk. It emphasizes the importance of making informed decisions regarding risk treatment options based on social, economic, and political contexts. The Risk Evaluation Matrix is introduced as a tool to assess business exposure and guide management responses to identified risks.

Uploaded by

Rosemarie Fulgar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
28 views8 pages

Module 3. rISK Evaluation

Module 3 focuses on risk evaluation, which compares risk analysis results with established criteria to determine acceptable levels of risk. It emphasizes the importance of making informed decisions regarding risk treatment options based on social, economic, and political contexts. The Risk Evaluation Matrix is introduced as a tool to assess business exposure and guide management responses to identified risks.

Uploaded by

Rosemarie Fulgar
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 8

MODULE 3.

RISK EVALUATION
Group 3
learning outcomes;

Describe the principles of risk.

Summarize the factors to consider in risk analysis.

Discuss the importance or risk evaluation to risk


assesment.
WORDS TO REMEMBER

Risk Evaluation is a process that is used to compare


risk analysis results with risk criteria in order to
determine whether or not a specified level of risk is
acceptable or tolerable.
Risk Evaluation Matrix is management tool which
accurately assess business exposure, based on the
frequency and severity of identified potential risk.
DISCUSSION

A. Risk assessment and Risk Evaluation

The purpose of risk evaluation is to support decisions. Risk


evaluation involves comparing the results of the risk analysis with
the established risk criteria to determine where additional action
is required. This can lead to a decision to:

do nothing further;
consider risk treatment options;
undertake further analysis to better understand the risk;
maintain existing controls; and
reconsider objectives.
Decisions should take account of the wider context and the
actual and perceived consequences to external and internal
stakeholders. The outcome of risk evaluation should be recorded.
communicated, and then validated at appropriate levels of the
organization.

Risk evaluation, to simply put, is what is acceptable and what


needs to be treated. For each tourism destination and their national
government, decisions about which risks are acceptable and which
are not, need to be made against the background of social,
economic, and political priorities. It follows then that risk shall be
treated accordingly. Risk treatment involves identifying the range of
options available to operators and destinations, making plans, and
acting upon them. A useful way to visualize this process is through the
Risk Evaluation Matrix.
B. RISK EVALUATION MATRIX

Cuskelly and Auld (1989) suggest the use of a risk


evaluation matrix as shown in Figure 1.4 containing
four management response options according to the
level of identified risk which include risk retention, risk
transfer, risk reduction, and risk avoidance.
Reduce Risk Avoid Risk
High

Frequency of
Risk Potential Retain Risk Transfer

Low
High
Severity of Risk Potential
Figure 1.4. The Risk Evaluation Matrix
Wilks and Davis (2000) defined the level of identified risk as follows:
Risk Retention
Risk Transfer
Risk Reduction
Risk Avoidance
THANK YOU

You might also like