In recent years, and especially after the global economic crisis, it is an observation that some governments are endeavoring to reduce expenses so that they can cope with the crisis in different sectors. The Saudi government has concluded that operating a medical hospital by private companies result in the increment of costs for the government. Therefore, the government decided to begin operation of hospitals publicly to reduce expenses, as well as, to increase the quality of medical services provided to the people. This decision put some companies in big trouble because it was a sudden decision that were relying on only the operation of hospitals as their financial source.
At the end of 2008, experts witnessed anger of the public in Saudi Arabia due to lack of quality services of some companies associated with the field of medical operation of government hospitals. Government, as well as public noted that companies were not able to provide services equivalent to that of the government contracts. Therefore, the Saudi government issued a surprising decision to prohibit companies from running public hospitals, which led to the annoyance of associated companies that caused termination of the employment contracts with huge number of staff.
In this section, I will identify the basis of the problem, as well as determine the extent of the problem and its impact on the specific company. In addition, the paper will attempt to discuss confrontations of this risk and the way company resolved this risk in an efficient manner. For such purpose, graph including factors of the risk management cycle will provide a comprehensive understanding of the issue.
The first phase of the cycle of risk management is identification of risk and factors that caused the risk and circumstances that promoted the occurrence of risk. Although the dependence on a specific investment seems a