Understanding Risk Management

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The term (risk), risk has a different definition. Risks associated with possible events or circumstances that may threaten the achievement of goals and objectives of the organization. [3] Vaughan (1978) suggested several definitions of risk as follows:
- Risk is the chance of loss (Risk is the chance of loss).
Chance of loss associated with an exposure (openness) against possible losses. In statistical science, chance is used to indicate the probability level will be the emergence of a particular situation. Some authors reject this definition because there is a difference between the level of risk with the level of losses. In the case of 100% chance of loss, meaning that the risk of loss is definitely not there.
- Risk is the possibility of loss (Risk is the possibility of loss).
The term possibility means that the probability of an event in between zero and one.However, this definition is less suitable for use in quantitative analysis.
- Risk is uncertainty (risk is the uncertainty).
Uncertainty can be subjective and objective. Uncertainty is an individual's subjective assessment of the risk situation based on knowledge and attitudes of the individuals concerned. Objective uncertainty is explained in the following two definitions of risk.
Statistician defines risk as the degree of deviation of a value around a central position or in the vicinity of the point average.
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