In this research, I will explain the corporate risk management from the perspective of one of the largest companies in Saudi Arabia, Samama group of companies that have been an efficient platform for my personal employment. Since a while, the company was relying exclusively on…
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 ...
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(Corporate Risk Management Essay Example | Topics and Well Written Essays - 2000 Words - 1)
“Corporate Risk Management Essay Example | Topics and Well Written Essays - 2000 Words - 1”, n.d. https://studentshare.net/miscellaneous/386100-corporate-risk-management.
Sophisticated examples such as Rail track and Barings in United Kingdom, Adelphia, Enron and Worldcom in United States and Parmalat, portray outcomes of lack of risk management. For instance, the companies which do not entirely apprehend the perils of adopting policies and stratagems are probable to fail.
Thus the cost and benefit analysis of the risk management is done so as to determine the viability of the project in association with the risk attached with it (Crouhy et al, 2000). For every single operation in the company the company bears a cost. Risk management is one of the major operations in most of the companies.
This is the insurance which is purchase by individuals who owns cars, trucks, motorcycles etc. The primary use of this insurance is to provide financial protection against any damage from traffic collisions that occurs when in operation. It can result from physical damage caused by traffic collision.
The consideration of the physical risk of the business to the fullest extent would help the companies to calculate the rational value of business and decide on the feasibility of the business investment. The physical risk could be posed to the business in the form of fire explosions, accidents at workplace, hazardous material spills, etc.
And at the same time degree of risks to be faced by organizations also may vary from one another depending upon their size, nature, diversity of business line and also their sources of capital to which they are depending upon. An organization is claimed to be risky when its liabilities exceeds than its assets or other way when they are seriously suffering from any physical dangerous while carrying out their operations.
The risk is beyond the control of the house owner (risk taker) and there would not be any potential benefit to the risk. Similar is the case with whole organization, which is manufacturing concern. If the factory is destroyed due to natural
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