Case Study Part III
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ISSC363_CASESTUDY1.docxRunning Head: RISK MANAGEMENT 1
RISK MANAGEMENT 2
Risk Management
American Military University
Andrew Southworth
ISSC363
Business risk refers to the possibility of a business receiving fewer returns on investment than expected or having a loss instead of profit. It could be terms of profit that the investment is expected to give. This exposes risk to the business bottom line and the financial plans of an organization. Numerous factors influence these risks to an organization, and hence an organization should put in place strategies to avoid or reduce chances of the risks and even lower the effects of the risks in case they occur. The risk manager should help in identifying and assessing potentials risks in the organization and putting effort to protect the organization from them (Tsoury et al., 2014).
Tuskys supermarket is a business organization that is spread and well known. It offers goods including clothes, shoes, food among other services. This organization is exposed to many risks which include: strategic risk which occurs when the business lays down business plan and strategies and the business fails to function as per the model. This will eventually lead the organization to be less effective over time and fails to reach its goals and objectives (Tsoury et al., 2014).
Compliance risk is another type of risk which arises in the organization because the company is highly regulated by laws of the sector. These laws must be adhered to in production and in all functioning of the organization. It will, therefore, restrict its functioning, and hence the expected returns may be lowered due to this. An example is a restriction on the cost of a product by the government which could be against its plans (Tsoury et al., 2014).
Another is technology risk which could occur in the face of new technologies that evolve each day. Online buying and selling can easily overtake the supermarket. This is because many people will prefer to buy online and save time and travel charges. Another form of technology risk is in the form of payment where customers would like to pay in their preferable means. A form of security in the organization is also key in order to monitor and record the operations in the supermarket all day long. The organization should have strategies to upgrade to every growing technology (Hopkin, 2017).
Employee risk is also there where the company may need more trained employees. This could occur if new services are introduced in the market, and the organization needs to employ staff that has the skills. The risk also involves finding enough people to work in each of the branches. Transparency and trust of the employees is also a risk it is exposed to since the money is I the hands of the employees (Hopkin, 2017).
Market risk is exposed to the organization since the organization depends on the market in order to function. The risk here is about the satisfaction of the customer needs and how the organization is placed in order to offer their services and goods. If the customers are not satisfied, they will move to other providers. Economic risk is also another risk which involves the economy rising or falling. When the cost of living becomes high, the customers tend to reduce and hence the sales volume may be lowered (Hopkin, 2017).
This business organization has a great ability to function since it offers a wide variety of products and is reliable due to its operating hours. They offer goods and services essential in the society and hence cannot be avoided by customers (Hopkin, 2017).
Reference
Hopkin, P. (2017). Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.
