Adoption of a Formal Risk Management Process - Dissertation Example

Download file to see previous pages Companies today face a considerable number of risks also because of international factors such as globalization, outsourcing, and intense competition. Therefore, it is important for all companies to satisfy their risk needs through a formal risk management system. However, careful analysis and planning must precede the entire operation. This not only helps in smoother implementation, but companies can also develop plans to tackle some of the inherent limitations and disadvantages of the system beforehand. It will also help the company determine the best course of action with regard to the risk management strategy eventually adopted. Once selected, the actual system is guided by a number of standard processes and phases each with its own set of requirements and objectives. The entire process is of a cyclic nature that starts with the identification and analysis phase and ends with the monitoring phase for a company new to the process, whereas in existing systems all the phases are carried out continuously.

This is the only way to ensure the effectiveness of the system. However, it need not be overhead and the entire process can be integrated into the schedules of the employees of the company. Senior management involvement also goes a long way in ensuring the effectiveness of the system. Once implemented as per guidelines and having taken appropriate precautions, it is possible not only to achieve a safer degree of operation within the company; other benefits can also be reaped. For instance, risk management systems can offer one of the ways of developing a long-term competitive advantage which is critical in today's competitive environment. Risk management systems are still evolving and are in a dynamic state. Future work that establishes better guidelines for the implementation will assist several companies in understanding and implementing their own systems that are based on a unique structure and satisfying demands.

Research Question
“In an increasingly dynamic environment, strategic management of risk has become a critical competency for organizations. From the perspective of an Operations Manager, present a case to the board of directors for the adoption of a formal risk management process.”

Objectives
To achieve the aim of the report following objectives will have to be met:
A. Demonstrate the importance of the Risk Management Process in an organization
B. To present the advantages and disadvantages of adopting a formal risk management process
C. To Analyse and Discuss why the organization should adopt a formal risk management process
D. To Conclude the findings of the report and present recommendations to the board

Risk management is a hotly debated topic today. Companies debate about the nature and importance given to formal risk management systems. However, risk management has been an integral part of the business ever since the early years of trade. Risk management today, on the other hand, looks nothing similar to that practiced even as late as the 1970s (Skipper & Kwon, 2008). ...Download file to see next pages Read More