The Risk Management Spectrum

This report explores the relationship between risk, strategy, and adaptation in business organizations. It discusses the importance of adaptation in an organization and provides examples of adaptation in businesses like Walmart and Amazon. The report also highlights the risks involved and strategies to address them.

Running head: THE RISK MANAGEMENT SPECTRUM
The Risk Management Spectrum
Name of the Student
Name of the University
Author Note

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Executive Summary
Risk in a business is associated with every phase of the successful work structure of a
business process. A risk can be described as the associated perils in a business that is totally
uncalled for but a business can still be prepared for the risks and also can strategize to
eliminate them before they even appear to cause negative impacts on the business processes.
There is a strong relationship between risk and the strategies to mitigate the risks. The way
risk, strategy and adaptation can be defined would help in establishing a clear relationship
between the three elements in a business structure. However, this is also an obvious effect
that business organizations need to identify these three before, during and even after the
propagation of a business process and needs to clarify how a problem to a business
organization can be easily mitigated with the implementation of a proper strategy that would
help in identifying the way by which the strategies can be easily adapted within the business
process. Therefore, the following report is based upon the understanding of risk, strategy and
adaptation and how the understanding of the risk management spectrum is formulated with
the understanding of the risk substrate.

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Table of Contents
Introduction................................................................................................................................3
The relationship between risk, strategy and adaptation.........................................................3
Meaning of adaptation for an organization............................................................................4
Importance of adaptation in an organization..........................................................................5
Examples of adaptation in businesses....................................................................................6
Risks involved and confrontation.......................................................................................8
Formulation of strategies to address these risks.................................................................8
Adapting the risk to execute the strategies successfully....................................................9
Reasons of the business being successful in the end..........................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

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Introduction
Any organisation is a potential effacing losses due to uncertain issues. In literary term,
the word risk is defined as a situation that exposes to a prospectus danger (Mullan et al.
2015). In case of organisations and business as well, risk is a potential of danger that the
organisations can face often due to uncertain situations (Pauw 2015). Strategy on the other
hand, can be defined as a plan of action that is designed for achieving and overall aim or a
long term goal (Schlosberg, Collins and Niemeyer 2017). This is a high level plan figured out
to fulfil one or more than one goals through the conditions of uncertainty. The process of
adaptation, can be defined as a process through which a new procedure, environment, action
is brought about in an environment where it was not implemented before.
The relationship between risk, strategy and adaptation
In literary terms the words risk, strategy and adaptation are different from each other
but all these three terms have a strong relationship between them. Mostly it has been found
that be it an organisation, a military area for the government, there are innumerable chances
of facing a risk on a risky situation that was uncalled for (Saebi, Lien and Foss 2017). A risk
spectrum is fulfilled by the identification of the risk situation before it occurs within the
organization and applying risk mitigating strategies with the help of the identification of the
severity of the risk factor. Every risk is associated with a negative impact that has the
potential of destroying or disintegrating whatever it is related to. Just like a risk in a business
scenario has the potential of destroying the business, in the same way, business organisation
can also face unknown situations that can exert risk factors in the already existing business
environment (Linnerooth-Bayer and Mechler 2015). There might be a need of changing the
business strategy to avoid the risk. When a business identifies the possible strategy to avoid
the risk, they need to implement it within the business organisation and adapted to replace the

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existing system or override the existing system. Therefore, the above mentioned paragraph
gives an idea about the relationship between strategy, risk and adaptation.
This is a common phenomenon for every organisation, military area or even the
government. Risk situation is easily avoidable either by adapting to a new strategy replacing
on older one for making changes to the old one for the existing system to thrive for the risk
situation has the potential of completely destroying the existing system (Mullan et al. 2015).
If an oncoming risk situation was faced by a country in the form of an enemy country
attacking, and in that situation there was no strategy adapted by the government and the
military to save the said country, without any doubt the country would obviously fall victim
to the attack and cease to exist.
Meaning of adaptation for an organization
Any organisation has a particular theory to adapt. The process of adaptation or the
theory behind adaptation is very natural for every organisation. Ever since the time of its
inception, an organisation falls in various situations that compares the organisation to keep on
changing the structures and procedures within the business organisation since it needs to cope
up with the ever changing environment (Amran et al. 2016).
This changing environment can either be the shift in the economic land space or even
an introduction of a new legislative system or even the introduction of a new technology that
would be beneficial for the business organisation to adapt. Adaptation within any
organisation is absolutely important for the business to you have a perfect balance against the
imbalances and inefficiencies that it processes within. Every organisation words in a certain
way, which is the way that the organisation has always planned to work in. However, it is not
necessary that it the planning of a business and its working structure would be just the same
as it has been planned (Nalau, Preston and Maloney 2015). It can also occur that right after

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the business was brought into existence, a change in the legislation has the potential of
making the business organisation cease to exist. This is why the organisation can think about
altering, editing even eradicating the planned business system that it had wanted to work with
in the first place and utilising the same resources and structure of the business the company
needs to strategize into adopting a new system according to the latest legislation so that the
business would not be affected or would not have any negative impact of the change
legislation.
Importance of adaptation in an organization
Change is inevitable in every business organisation. The way that people and their
requirements are changing along with the progress that technology has been making, it is
impossible for a business to thrive if they do not add up to this everlasting change (Serrao-
Neumann et al. 2015). The non-implementation of the inevitable change can form a risk in
future for a business organisation if did not understand the need of the business organisation
to adapt to the changes and change to be brought in the business organisation in response to
the changes in the requirement of people, the progress in technology or any other factor that
affects the business directly or indirectly.
There are many reasons for which a business may be affected in a negative or positive
way. The reasons that affect a business in the negative way can further form a risk for the
business organisation as a whole if they are not acknowledged. Changes in a business
organisation are just as similar (O'Hare, White and Connelly 2016). For a business to accept
the positivity and negativity of a change, it needs to understand how this particular change in
the environment would affect the business and what strategies would the business need to put
in the organisational processes so that these changes can be adapted to the existing business
practices. It is extension important as the negative effects of not adapting to change may

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bring about dissatisfaction of the customers and can even make the business lose their
existing reputation or total fallout in the business process.
As people and technologies are evolving there are various changes occurring
throughout the world. This is also bringing about several changes in the business
organisations as the people around the world are changing including the customers of the
business organisations. With the changing technological and environmental phase, it is
inevitable found that the requirements of the customers are ever changing (Schlosberg,
Collins and Niemeyer 2017). The priority of a business organisation is to fulfil the
requirements of the customers and to synchronise the business processes of an organisation
with the changing structure of the requirements of a customer the business organisation need
to adapt to the changes. The negative effect of this would result in to the business
organisation to lose their customers.
Examples of adaptation in businesses
To make this concept of risk, strategy and adaptation more clear through this
particular report, following is an example presented about a business that needed to change
its business process and completely overwrite its existing business process to thrive in the
market and adapt to the changes that the world has seen due to technological improvements.
Walmart is a world famous business organisation that mostly deals with the retail
sector of the market serving the customers all over the world. Walmart was mostly based
upon physical existence of huge departmental stores that sold various retail products to the
customers that would come and by the things as it has been established since its inception.
Walmart has been in business for a long time and the business strategy has not been changed
over course of time since they did not need a change in the business strategy to think of in the
first place (Spieth, Schneckenberg and Matzler 2016). The business was doing enormous

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business all over the world and making returns on their Investments in large amounts. The
customers will also satisfy with their services and the business of Walmart was reaching sky
high limits. Although it was found that in the later times, there was an introduction in the
business market about a new technology that business organisation has been adopting rapidly
to and that was e-business. E-business or electronic business was the new technology that
was introduced to the business world to provide enormous benefit to the organisations. In this
particularly advanced technology, a business can keep up with regular business functions
without having a physical existence. The entire warehouse, product display, warehouse
management and other business activities was capable of running online (Bastidas-Arteaga
and Stewart 2015). A huge resource investment on business organisation was in no need to be
implemented any further for a business organisation. The business adaptations and effect on
the customers where such that people started to show up less on the physical shops and big in
buying more from the online stores since it produced a lot of their efforts to physically be
present to certain area to buy certain things. This affected negatively to the business of
Walmart as it did not have an online business and other retail organisations in close
competition to Walmart did not have a physical existence and started write as a business
organisations providing huge returns on Investments to the stakeholders. This was a change
in the entire business environment that Walmart need to adapt to.
On the other hand, Amazon is in e-business organisation that has no physical
establishment and started only through to the setting up of electronic business. However, the
improvement in the technological phase introduced cloud implementation that slowly outdate
the physical existence of server and located everything to a virtual cloud which works as a
server (Termeer, Dewulf and Biesbroek 2017). Amazon also required to adapt to this
technological advancement to alter their business setting so that the risk of if the potential
competition cannot harm the business of Amazon.

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Risks involved and confrontation
In both the cases of Walmart and Amazon, the changes in the business procedure
made both the businesses see to it that they have been in the business without the
technological advancement and there were also other organisations that were starting to be in
the business adapting that advanced technology within the strategy of the business operation.
Risk from the competitors: Netflix is a popular online video streaming website that
is completely set in as an electronic business. this particular business organisation allows the
users to stream videos online at any time any place possible and their entire business
organisation has selected a virtual cloud server system that allows them to have endless user
storage space and even allows numerous user to login at the same time and store their data
along with the business data stored within the online cloud server (Lim and Winkenbach
2019).
On the other hand, Walmart has also faced competitions from business organisations
like Amazon and eBay that were established right from the start as an electronic business that
have no physical existence. If Walmart an Amazon were not keen on implementing changes
in the business organisation and adapt to this probable technological advancements, they
would be at risk of being substituted or eradicated from the market by their competitors since
they were allowing more comfort of services to the customers (Dwivedi et al. 2016).
Formulation of strategies to address these risks
Innovation strategy for combatting risk situations: Walmart had implemented
numerous strategies to fight with this particular situation of strategizing into a new
technological advancement so that other businesses like Amazon and eBay that exist initially
by starting as an e-business would not be a threat to the organisation. The started initialising
the strategy of having their own a business website but at the same time they did not want to

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eliminate their physically existing shops (Bengtsson and Tavassoli 2018). They understand
that not every people are so habit created with the internet and might want to visit a physical
shop. This is one strategy that Walmart formulated to not eradicate the existing system
completely for fighting the competition in the market but they just adopted these new
technological advancements along with their existing systems.
Amazon had also implemented the same and started to add cloud services to their
business at such a range that right now Amazon has an online video streaming portal, their
own manufactured smart devices having cloud services like Alexa and Fire TV Stick, and
many other options for the users to choose from (Saur-Amaral, Soares and Proença 2016).
Adapting the risk to execute the strategies successfully
Along with the risk of being eliminated by their competitors in the market, both the
organisations already had the risk of implementing new services in an already established
business process (Krishnan, Haselhuhn and Pearce 2017). However both the business
organisations understood the problem but took a much more trusted leap into adapting the
technological advancements to their business to make sure that the organisations do not fall
behind their competitors.
Reasons of the business being successful in the end
The reason that has been identified about both the business of Walmart and Amazon
is that they did not blindly strategize into their business processes to avoid risks of being
replaced by their competitors. Both the organisations at accepted the changing structure of
technical advancement and how business would be benefited if they are adapted into the
existing processes (Maria 2017). Along with that, both Walmart and Amazon understood that
losing their original business process would not let the business organisations have an
innovative structure. If Walmart lost their physical existence and tried to become a complete

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electronic online business platform, it would take a lot of time for them to come into the
competition with the already existing e-Businesses, and at the same time they would lose the
customers they had who would ok for coming into the shop and buy an item by themselves.
Amazon also kept their older business process of establishing a detailed online
business service and innovated into having their own products manufactured using the new
technological advancement, not just blindly following Netflix and its business process to
complete at the same time (Turban et al. 2018).
The reason that both Walmart and Amazon did not go out of business and kept on
functioning was that it had identified the risk of being substituted by other business serving
the customers with improved adaptations. Understanding the risk and strategizing innovations
to mitigate them had been the main reason why the business succeeded.
Conclusion
Therefore, in conclusion, it can be said that change in a business structure is inevitable
and it is necessary that every organisation identifies the change in business structure or the
business environment, implement them within their already existing business process, adapt
to them and avoid the impending risks. In this particular context, the above report had thus,
focused upon the implementation of strategies within business organisations understanding
the perils or impending risks that the business might face if the risk is not eliminated with the
help of a mitigation strategy. Then the relationship between risk, strategy and adaptation has
been set, the literal meaning for adaptation and the importance of adaptation in an
organisation with real world examples has been formulated. Following these examples, the
risk associated with the adaptation, its confrontation, the formulation of the strategies to
address this disk, adapting to the risk to execute the strategy successfully and the reasons of
the business being successful in the end has also been described.

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