Lakhasly

obtained from the successful management of that risk at whatever level of sophistication is appropriate at the time.The development in risk management approach can be summarized as follows: o Hazard management specialists may fi nd that there has been a trend towards a desire to retain more insurable risks (and buy less insurance) as a result of a more holistic approach to risk management.In summary: o awareness of non-compliance - REFORM; o actions to ensure compliance - CONFORM; o achieve business opportunities - PERFORM; o inactivity caused by obsession - DEFORM.o Strategic planners must recognize that risk management tools and techniques can contribute to better strategic decisions and the successful exploitation of business opportunities

obtained from the successful management of that risk at whatever level of sophistication is
appropriate at the time. In summary, risk management need only be as sophisticated as the
organization requires in order to bring benefi ts.
Although the three levels of risk management sophistication illustrated in Figure 4.2 represent
an improved approach to risk management, there is a danger that organizations will become
obsessed with risk management to the point that important decisions are not taken. At this
point, it may be said that too much attention and concern about risk and risk management
will cause the organization to deform its operations. In summary:
• awareness of non-compliance – REFORM;
• actions to ensure compliance – CONFORM;
• achieve business opportunities – PERFORM;
• inactivity caused by obsession – DEFORM.
As the level of sophistication increases and risk management professionals become aware of
the alternative approaches to risk management, they should value the contribution that can be
made by other approaches. The development in risk management approach can be summarized as follows:
• Hazard management specialists may fi nd that there has been a trend towards a desire
to retain more insurable risks (and buy less insurance) as a result of a more holistic
approach to risk management.
Development of risk management 45
• Control management specialists must not squeeze entrepreneurial spirit and effort out
of the organization.
• Strategic planners must recognize that risk management tools and techniques can
contribute to better strategic decisions and the successful exploitation of business
opportunities