Report on Managing Risk in Business

Added on - 06 Jun 2020

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Managing Risk in Business
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1...........................................................................................................................................11.1 Role of risk management......................................................................................................11.2 Functions of risk management activities and structure.........................................................13.1 Types of risks........................................................................................................................23.2 Operations that expose businesses to risk.............................................................................33.3 Types of security risk............................................................................................................33.4 Business areas which are vulnerable to fraud and security breaches....................................4TASK 2............................................................................................................................................42.1 Techniques and methods used for risk assessment...............................................................42.2 Actions used to manage risks................................................................................................55.1 Advantages and disadvantages of business who have risk management system..................55.2 Responsibilities and roles of manager for risk management................................................65.3 Role of budgeting and monitoring in risk management........................................................6TASK 3...........................................................................................................................................74.1 Effect of external influences on managing risks...................................................................74.2 Importance of integrated risk management in reducing impact of external influences........77.1 Relationship among marketing strategy and risk..................................................................77.2 Key areas in which business are vulnerable to marketing risk.............................................87.3 Importance of benchmarking in reducing risks.....................................................................8TASK 4...........................................................................................................................................96.1 Links among crisis management and contingency planning.................................................96.2 Vulnerability of business as it breaks in business continuity................................................96.3 Contribution of crisis management system.........................................................................10CONCLUSION.............................................................................................................................10REFERENCES..............................................................................................................................11.......................................................................................................................................................11
INTRODUCTIONIn the last two decades, the economy of a world has vital changes on management oforganisations and various new strategies are also implemented and introduced in order tosuccessfully deliver and manage projects within the given time and the budget which isallocated. One of the major factor which affect the execution of project and also cause fail andloss is called risk factor (van der Vegt and et.al., 2015). After the occurrence of financial crisiswhich was there in 2008, many global organisation focus on management of risk and analyse theimportance and methods of controlling risk in their business. This report is prepared which willassist in understanding risk management and will give ways for reducing risks.TASK 11.1 Role of risk managementRisk management can be defined as the way for mitigating, managing and assessinglosses. There are several types of risks in a business which affect its overall operations and alsoaffects on the growth of business.It is the process used for analysing, identifying and respondingto the risk throughout the whole project so as to achieve the objectives and goals. This processevaluates the risks which my arise from a hazard by taking adequacy of existing control intoconsideration and make decision regarding whether a risk is acceptable or not. Risk managementplays a main role in analysing, identifying an controlling risk, these roles can be defined as:Risk management helps in identifying potential problems before their occurrence so as toplan risk handling activities. There are different problems which may be in relation tofinance, assets etc. and can be solved with the process of risk management.It address various issues that may hinder achievement of various objectives. Objectivesand targets are set up by company which will help them in their success. Riskmanagement assist in finding issues which hinder growth.It mitigate and anticipate the risks which have critical effect on the business project.It identifies risk at early stages with the involvement an collaboration of stakeholders.1.2 Functions of risk management activities and structureAs an employee of the Abacus Ltd, it has been analysed that risk management structureconsists of three level in order to make management of risks. Escalation levels and1
responsibilities in order to deal with risks are clearly defined in a company. The major bodiesare:Risk Executive Committee: Responsible for controlling risks and managing groups, itconsists of two members from the board of management. Mainly, this type of committeeis focus on handling risk that occur at workplace.In this, It is major role of riskcommittee to review all the methodologies that help in risk measurement. With the helpof this management of the company can easily minimize the risk factors.Group Credit Policy Committee: It is the sub committee of risk executive committee andhandles responsibilities regarding group wide credit principles.Under this, a group ofpeople in business organization is highly responsible for evaluating the credit standingand ability to effectively rebound the debt prospectives. This will contribute ineffectively managing as well as minimizing the risk factors at workplace.Group Reputational Risk Committee: It is the sub-committee of risk executivecommittee and make decision regarding questions which are in relation with reputationrisks.Under this, it is formal governance committee which provide recommendationsand advice to the senior management group with the aim of reputational risk.2
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