When we think of risk management techniques, our first thoughts are to evaluate what are risks are then create value by purchasing insurance to protect potential financial loses. Others start creating financial nest eggs by placing money into savings. While both techniques are valid techniques, they are but pieces of a larger risk management pie that requires techniques to consider when looking into solutions for optimal risk management.
There are many perspectives on how to manage financial risk but for the purpose of this analysis I will be evaluating two specific experts Dr. James Kallman and Robert S. Kaplan and Co-Author Annette Mikes on their techniques for managing risk. Dr. Kallman utilizes a risk management solution tree which involves the GEICO approach, these risk prevention techniques include: Government mandates, Education, Information management, Contractual Transfer, and Operations Management; these techniques preserve assets, save lives, and save risk financing costs. In analyzing Robert Kaplan & Annette Mikes techniques requires a qualitative distinction between the risk levels in order to properly categorize them as Preventable risk, Strategy Risks, or External Risks, with the belief that we can influence risk by not buying into standard forecasting and biases which leads to misreading ambiguous threats. After analyzing both Dr. Kallman’s assessment of Financial Risk Management techniques and comparing to Robert S. Kaplan & Annette Mike’s techniques I believe it will be clear that that Dr. Kallman’s technique for risk management provides solutions that are manageable and reasonable approaches to eliminating and reducing risk taking into consideration numerous factors, and the biggest factor is that is does not require a lot of “buy in”; whereas Kaplan’s technique relies on “buy in” of too many people and calls out to many uncertainties to