Risk Mitigation Strategies for Hasbro
About the Company
Hasbro is a company that manufactures toys in Europe, and it is one of the largest companies in the region that produces toys (Technavio, 2018). Hasbro has a strong partnership with Disney, and it also produces merchandise for megabrands such as Star Wars, Marvel, Frozen, and other numerous DreamWorks features. Nevertheless, Hasbro’s weak earnings beginning the year 2018 indicate that the company has been experiencing some challenges; its earnings have been declining (Vena, 2019). For Hasbro to be able to manage its risks efficiently and minimize the impacts of risks, it needs to come up with effective risks assessment plan. It is obvious that the company has been facing uncertain and tough economic times in the past few years. Effective risk assessment will enable the company to mitigate some of the causes of its woes and also enable it to come up with strategies for managing future risks before they occur. Additionally, an effective ERM plan will also enable Hasbro to be able to minimize the effects of risks.
Proposed Risk Management Strategies for Hasbro
With an effective risk management strategy, Hasbro t will be able to identify uncertainties and understand the issues in its line of business. An effective strategy is one that prioritizes risks, assigns ownership to risks, and integrates risk accountability and management into the decision-making processes of a business (Simone, 2017). There are so many benefits that Hasbro can gain from having or developing an effective risk assessment plan. Successful businesses use risk assessment and management strategies to grow their profits and revenue. Additionally, risk management plans can enable a business to be able to bounce back from adverse conditions than competitors. Discussed below are some of the strategies that Hasbro can use to assess and mitigate the risks that it currently faces in the market.
Put Risk-Assessments into Real-Time Use
For true impact, Hasbro can incorporate or integrate its risk assessment results into its business decisions. Hasbro must efficiently assess identified risks and implement actions that address immediate risks or challenges. The company management must also cultivate a robust or strong risk culture and conduct regular assessments of identified risks. Continuous monitoring, identification, and assessment of risks will also enable the business to be able to its risk appetite with business strategies (Simone, 2017).
Develop Actionable Insights and Guidance for Leadership
Hasbro must ensure that its risk assessments are actionable and relevant. Its risk management officials must interpret risk information and make recommendations for the company’s management can incorporate into strategic decisions. The interpreted information and proposed recommendations should also be easy so that management does not struggle to understand them, If the recommendations are made in a manner that they can easily be understood, management will have no difficulty interpreting the information and integrating it into decision-making processes.
Use Lay Terms
Other leaders who do not participate in risk management functions may interpret risk assessments as burdensome processes full of abstract language and heavily focused on negative outcomes (Simone, 2017). Because risk management should be the responsibility of every leader in an organization, those within the risk management function should use a language that will enable other leaders to value their assessment. This means that Hasbro must define risks and their consequences in terms that are familiar to others to avoid complications.
Automations must be balanced with the Human Touch.
Automation in risk management can enable Hasbro to collect mass data for analysis. However, the company must ensure that risk assessment surveys are facilitated and combined with human discussions. Once qualitative information has been gathered, humans can then be allowed to provide their multiple viewpoints. Ultimately, Hasbro must incorporate risk assessment reports into its decision making processes.
It should, however, be remembered that business environments change: demands evolve, technologies improve, competition increases, and regulations get modified from time to time (Minsky, 2016). As such, Hasbro must revise the above strategies constantly (and add new ones where necessary) to accommodate the dynamics of new markets. In other words, an effective risk management or mitigation strategy is one that can allow a business to adapt to new changes. Minsky (2016) uses recent scandals in companies such as Dwolla, Wells Fargo, and Volkswagen to illuminate the necessity of organizations to have robust risk management strategies for the prevention of possible catastrophic and stressful surprises.
Minsky (2016) continues to assert that “When Plains All American Pipeline failed to detect corrosion in its pipeline…the result was a 3,000-barrel oil spill and millions of dollars in fines”. The company had failed to maintain proper systems and procedures and to delegate sufficient resources to prevent the problem from escalating. But with proper risk management strategies, this company (and the ones mentioned above) could have prevented disasters from happening. These companies are in a different line of business than that of Hasbro, but all businesses face risks at different points in their life cycles. Hasbro must, therefore, ensure that it complies with all regulations that govern its activities and constantly review its risks strategy for it to be able to effectively mitigate identified risks. Only then will the company be able to focus on value-added activities such as customer service and product development (Minsky, 2010). The strategies above are only meant to serve as starting points, and Hasbro can either refine them or add new ones. As stated above, risks are dynamic, and no single approach can fit all needs. The trick is to always be on the lookout for new ways to respond to better respond to challenges.
References
Minsky, S. (2016). Key Steps to a Robust Risk Management Program. Risk Management Monitor. Retrieved from https://www.riskmanagementmonitor.com/key-steps-for-a-robust-risk-management-program/
Simone, D. (2017). 5 Strategies to Maximize Your Risk Assessments. Risk Management Monitor. https://www.riskmanagementmonitor.com/5-strategies-to-maximize-your-risk-assessments/
Technavio (2018). Top 10 Toy Companies in Europe 2018. Retrieved from https://blog.technavio.com/blog/top-10-toy-companies-in-europe
Vena, D. (2019). Hasbro’s Weak Earnings Show Challenges Remain. The Motley Fool. Retrieved from https://www.fool.com/investing/2019/02/09/hasbros-weak-earnings-show-challenges-remain.aspx