Risk Management Process

Risk Management Process

1. Name of company – Transparency International
2. Location – Nairobi, Kenya
3. Nature of Business –Non-Profit Organization
4. Annual gross revenue –$500 Million
5. Number of employees – 2,500 employees
6. Others – Barclays Bank

 2(a)

The 5 internal Stakeholders: Managers, Employees, Board Members, Subordinate staff, Owners of the business.

Manager: Managers ensure that the business is operational and profitable. Mangers face risks of fraudulent and misappropriations of funds.

Board members: Board members are tasked to come up with robust policies to ensure that the business attains its objective, they face risks associated with oversight management of the company, and some risks are related to economic crimes.

Employee: Employees are part and parcel of business operational activities; they face the risk of losing jobs should the business stop running and making profits. .

Subordinate staff: Subordinate staff is crucial in supporting managers and employees in the business. They face risks of job losses should the business fail to make profits.

Owners of the business; Owners of the business are critical to the business since they invest capital in running the business and making profits. They face risks of losing their investment should the business report losses.

3.(a)

–           i)Creditors       ii)Customers    iii)Government Agencies

–           iv)Suppliers       (v)Business Partners

b.)

Suppliers: The focus is that they get paid for their products and services. Suppliers face risks of financial losses for goods and services supplied.

Creditors face risks of financial losses for capital borrowed by investors and owners of the business,

Government Agencies: The concern of these agencies is that all the regulators are being followed. They ruled, such as contaminants put into the air they have to monitor and measure. Government agencies face risks of losing tax revenues should organizations fail to generate profits.

Business partners: Their concern is that it is viability to expand the business. Business partners face risks of financial losses when the venture does not yield benefits.

Customers: The customer risks are about the price, quality of products, and fraud.

 4

a.) Political – the big concern is the change of the government party, reform of the law.

b.) Economical – The matter is that happened a crisis, slow down, unemployment, and the balance of the payments

 c.) Social – Impact on the students by increment alcohol and drugs, technology revolution with the students, change I attitude towards healthy living.

d.)        Technological – Cybercrimes, credit card issues, and also the impact of the new digital revolution and better chaise of the people.

e.)        Legal – the impact of implementing the new laws and the money that it would cost.

f.)        Environmental – Could impact the operations of the environmental guidelines can put pressure on the operations business. There is limit natural resources and they have to respect it. The business has to respond on this facts.

 5

1. The two strengths of the risk management process are mitigation and training.

Strength:  First and foremost risk management attempts to assess the possible risks that occur in an organization and come up with ways of how to mitigate said risks.

Through adequate training of the stuff, there is sufficient instruction on what to do in case the risk occurs.

1. One demerit of risk management is that not all risks are factored, and secondly a mock training.
2. Not all risks are factored: some risks may be left out during the formation of the risk management process.

Inadequate training: Mock training is done ones in a while; without adequate training, the stuff can forget what they learned, and thus they would not deal effectively with the risk.

7

There are five steps in conducting research about risk management practices.

1. Ascertaining the risk- This is identifying the risk through the use of a risk register.
2. Analyzing the risk- the probability of the risk to reoccur is taken into consideration.
3. Evaluating the risk- this is the ranking of the risks by determining the consequence of the risk. If the risk is severe, then it will warrant treatment; if not, then it can be overlooked.
4. Treat the risk-risk mitigation models are created in order to bring the risk to a satisfactory level.
5. Monitoring and evaluating risk- the risk is monitored and reviewed through the risk management register, and various improvement measured put in place.

8

Examples of risk in an organization

1. Security risk, this can be theft and  terrorism
2. Operational risk- failure in companies’ day to day operation
3. Economic risk- These are risks that will reduce company sales or increase the company’s cost.

9

1. The first action is to try and prevent the risk if the risk is foreseeable. The second action plan is transferring the risk to outside sources. The third process is mitigating the risk to an acceptable level.
2. The timeline for the implementation of each is three and six months, respectively.
3. Using the risk management monitor register to monitor, track, and review the process.
4. Communication will be done through the email, memos, and during meetings, or even through the noticeboard.

10

The documents required for the action plan contained in the risk: Risk Registered: it s a tool to identify all risks for a business and includes additional information about each risk.

Risk action plan templates: is a course of action that the company agrees to help to indicate the risk, reduce the likelihood, and minimize the impact of these.

Communication about risk control: is the way to communicate to the workforce and the community about potential hazards:

11:

The methodology that I will use to evaluate success is the following:

1. Prepare- Make a checklist of the action plans to review; this is done by use of the risk management register.
2. Elicit and verify- To test whether the action plan worked to bring the risk to an acceptable level.
3. Analyze gaps and evaluate- Gap analysis and evaluation are done to establish the effectiveness of resolving the risk.
4. Report to the oversight committee- The risks findings are made, and the evaluation results submitted to the oversight committee.

 12

Professional liability insurance: it shields the professional and companies from the burden of financial losses when accidents occur. Employees have medical covers that ensure they enjoy medical benefits when they get sick, and car owners have insurance covers, which ensure they are compensated when car accidents occur.

References

Aven, T. (2016). Risk assessment and risk management: Review of recent advances on their foundation. European Journal of Operational Research, 253(1), 1-13.

Bodnar, G. M., Giambona, E., Graham, J. R., & Harvey, C. R. (2019). A view inside corporate risk management. Management Science, 65(11), 5001-5026.

Hubbard, D. W. (2020). The failure of risk management: Why it’s broken and how to fix it. John Wiley & Sons.

Rampini, A. A., Viswanathan, S., &Vuillemey, G. (2019). Risk management in financial institutions. The Journal of Finance.