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How Strategic Risk Impacts Business Strategy

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Added on  2020-03-16

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Nowadays the technology innovations, and along with the new trends in mobilisation the social media and the expanding connectivity[3] are combined with globalization created a business environment of strategic impact to develop into a worldwide crisis. Technology itself is also cited as a major source of strategic risk, with 53% of companies saying that technology enablers and disrupters – such as social media, mobile, analytics, cloud computing, and big data – could threaten their established business models.

How Strategic Risk Impacts Business Strategy

   Added on 2020-03-16

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How is strategic risk different from other types of risk?1.The risk which has the effect on a organization business strategy decision, or created by thedecisions. They have a tendency to have a big and more ubiquitous contact than the othertypes of risk that businesses have traditionally focused on, in areas such as operations,finance, and compliance. Let us take an example that the shift from mature[1] markets topromising markets as the world’s primary growth engine presents a company with strategicrisks that affect every part of the business.Why the increased urgency, if strategic risk has always been a part of business?2.Companies had lots of time to take actions to the strategic risks, so they could follow “waitand see” approach. Nowadays the technology innovations, and along with the new trends inmobilisation the social media and the expanding connectivity[3] are combined withglobalization created a business environment of strategic impact to develop into aworldwide crisis.How should companies respond to this new focus on strategic risk?3.Strategic risk has become a board-level issue. In the recent survey 67% of companies andtheir board member say that the risk committee now has directed[2] for managing strategicrisk. The majorities of the companies have changed their approach to manage the strategicrisk.Increasing the frequency and budget for monitoring and managing strategic risks.Monitoring and managing strategic risks continually.Increasing the number of executives allocated to managing strategic risksWhich strategic risks are the most critical today and why?4.As per the survey, reputation is the biggest risk concern. This is due to large measure totechnologies such as social media that enable instantaneous global communications. Thetime – or lack thereof – that companies have to respond to a crisis that’s reputational innature once it erupts. Technology itself is also cited as a major source of strategic risk, with53% of companies saying that technology enablers and disrupters – such as social media,mobile, analytics, cloud computing, and big data – could threaten their established businessmodels. These new technologies[4] are changing the way businesses are run and managingthe risks associated with them is likely to remain a strategic priority for the expected future.References:1.http://www.innovationgame.com/invgame/srpaper.htm2.https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Governance-Risk-Compliance/dttl-grc-exploring-strategic-risk.pdf3.https://www.careersinaudit.com/article/the-importance-of-risk-management-in-an-organisation/4.http://businessfinancemag.com/business-performance-management/risk-strategic-planning-process
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