The word 'Risk' is associated with the chance that there will be a hindrance in the achievement of an objective, in other words, we presume it to be a threat to reach our desired goals. In case of organizations, risk is often called strategic risk; it includes all the threats related to the strategic direction of the organization. They may be stirred by policies of the government, competition, legal matters etc. Risks can be categorized into systematic and unsystematic risks. Systematic risks influence the market as a whole, whereas nonsystematic risk is associated with a specific firm or industry. (Investopedia, 2009)
In such situations, organizations use various management practices to hedge against risks associated with production, finance or any other area of business.
In formal words, risk management is the process of identifying, assessing, communicating and managing the risks associated with an organization; this is to ensure that the organization meets its objectives. Some common practices to hedge are to introduce diversification, to hedge or make forward contract, maintain flexibility and to keep ample cash reserves. (Lesrisk, 2009)
In order to make such decisions, it is important to have access to all sorts of relevant information and correct information. All business decisions have an information risk component. This is the risk associated with having incorrect, inaccurate, irrelevant and untimely information, the source of information also plays a crucial role in decision making. All these influence the ability to forecast and make decisions. So reliable source information should be handy, based upon which trends are constructed, modeling is done, forecasts are made, and finally the decisions are finalized.
In risk management, risk analysis refers to the systematic use of information to assess opportunities and threats from a concurrent risk; the probable impact of the risk, the timing of the risk and it relation with other sorts of risks that might occur subsequently. (Lesrisk, 2009).
Organizations use risk management as a management tool to make rational decisions, it consists of a five-stage cycle: clarify objectives, identify risk, assess risk, plan and take action to manage risk, monitor risk. (Lesrisk, 2009)
Research helps managers to get a clear picture of the situation and to evaluate all possibilities of threats or opportunities that might influence the organization, and in the light of that it is measured that how a certain decision can have its influences. Risk evaluation is the process through which risks are assessed in terms of costs and benefits and in terms of reaching the acceptable level of risk, with taking due care in mind about the interests of the stakeholders. Through research, risk managers can get knowledge about how to deal with certain kinds of situations. Exposure to the information and situations can benefit organizations as well, because then they can apply the solutions faced by other businesses in similar scenarios.
Source referencing refers to acknowledging the original source of an idea or a piece of information. Referencing enables one to locate the source independently, whether it is out of interest in the subject or the need to verify the information. Referencing also shows that you have gone through ample material on a particular topic and you have relied on quality sources on a subject. It also reduces the editorial conflicts and you can avoid copyright issues, just through referencing. Here it is to note that words such as 'as said by someone...'
As risk management is becoming an increasingly important activity in the world of today, be it for financial institutions or some aspect of the corporation. There are a number of modeling tools available nowadays that enable the usage of statistics to evaluate the optimal solution to a problem. Similar is the case with dealing with a situation or making a decision where risk is involved, so taking aid from outside material or sources can add a lot of support to your work; however at the same time it is important to accept that it is not original material, and proper source referencing should be given. It is also unethical not to cite sources of material that you have taken be it from books, news articles, journals, technical reports, conference papers, video, TV, personal communication such as interviews or letters; electronic sources such as web pages, online databases or even websites. There is a need to provide a reference whenever one quotes, paraphrases or summarizes someone else's opinions, theories or data. Graphical information such as diagrams, tables and photographs should also be given reference. (Zott, 2008)
The act of not giving proper reference is called plagiarism, this can carry heavy penalty in case it is caught. Citations can be added in footnote, parenthetical reference, embedded links, endnotes, bibliography etc. Especially in academics, it is the right of the writer to be credited for their work
An example of it is that you make a financial decision based on someone else's analysis regarding the upcoming policy of the government; later the decision pays you really well, so in your report you should give the reference of that particular analysis and not take the credit of the achievement for yourself completely. Or if you incur a loss due to the decision based on the analysis you read somewhere, so later you can justify your decision by referencing the specific person, and give explanation.
Set rules, or system exist for referencing. Referencing can be in APA, MLA (Modern Language Association) style, Vancouver system or Harvard system. One can choose the referencing style according to the requirements of the instructor, journal, book or the organization for which one is working. Giving due credit to someone for his or her hard work is important and should be given due consideration by those who are responsible.