The Relationship Between Risk and Strategy

Risk Management 1
Risk Management Spectrum

Risk Management 2
Contents
Introduction.................................................................................................................................................3
The relationship between risk and strategy..................................................................................................4
The implications of the strategy..................................................................................................................7
The possibility of strategy not aligning.......................................................................................................8
Due diligence and strategy reviews.............................................................................................................8
Adaptation of the organization for strategic objectives even having risks...................................................9
Conclusion.................................................................................................................................................11
References.................................................................................................................................................12

Risk Management 3
Introduction
The risk management source for sustainable enlargement and a key to sustainable viable benefit
is an organization's risk management. It permits organizations to focus on their intangible
assets in order to improve organizational performance; on the other hand, the knowledge-based
economy of higher education institutions has a significant role to play in the economic
development of nations. Hence, this study endeavors to investigate the relationship between risk
and strategy of the organization. The risk is the notion that inherent to any business activity, but
the establishment of formalized functions of risk in organizations is a recent phenomenon.
There are many corporate governance frameworks that service to develop structures in order to
facilitate management accountability in a world features by a separation of divorce of
ownership from control, but such control pretends so far to have unable to stem the repetition of
corporate scandals across the globe.
The main focus of this assignment is to focus on the relationship between the risk and strategy
in which the various examples will be drawn. Along with the explanation regarding how
adaptation can enable an organization to achieve its strategic objectives and win despite the
risks, it may face will be made. It would facilitate to bring understanding regarding various
concepts of risk management and strategies for risk mitigation. With the support of real
examples, the research on topic will justify the involvement of different companies on the same
topic.

Risk Management 4
The relationship between risk and strategy
The risk in the term of the business can be depicted as the possibility for the company to have
lower than assumed advantages or experiences rather than taking a profit. It is an essential to
process of any kind of business because, without risk, the business cannot move beyond its
capabilities. Business risk is attracted by a number of aspects, involving sales volume, costs of
input, government regulations and entire economic climate. On the other hand, strategy in the
business is helpful for the company to attain the strategic objectives, in order to achieve its
goals and meet the expectations of its customers. Cost leadership, differentiation and focus are
major examples of business strategies that are helpful in developing the growth of the company
(Yazdanpanaha and Saharkhiz, 2015).
There is a huge relationship between risk and strategy that contributes to the success of the
company. Risk and strategy are integrally related- and they always have been. Certainly, most
strategy-selection processes do consider risk (Sadgrove, 2016). Majorly, however, those risks
are focused in term to their future effect on the ability to initiate the strategy. There are times
when risks found in implementation become so vital that they intimidate the strategy itself. The
risk moving towards the strategy, which are vital enough that the board must focus on revisiting
the strategy. Risk can affect the objectives of the company through which the set target can be
hampered but with the help of effective strategies, the risk can be mitigated and opportunities
can be increased (Rostami, Sommerville, Wong and Lee, 2015).