1
Risk Challenges and Integration
Jena' S. Brown
Liberty University
BMAL 714
Dr. Sarita Wesley
May 12, 2023
2
Risk Challenges and Integration
Abstract
In the aftermath of the Global Pandemic, which shook the world in a manner that our generation
had never witnessed, organizations were forced to act swiftly to survive. The retail sector of the
global economy was negatively impacted because consumers stayed at home, and non-essential
businesses remained closed. One company has risen from the muck to become a significant force
in the business world. Amazon is the name of this organization. With malls closing, many
consumers turned to online purchasing to acquire the necessary items. Things could be delivered
directly to their homes to keep consumers secure during the Covid-19 outbreak. In the aftermath
of a time that altered our perception of the world, this organization and others needed strategic
leadership to think fast. Like many other businesses in the aftermath of the Covid-19 outbreak,
Amazon has had to take measures to compensate for staffing shortages. In response to the Covid-
19 pandemic situation, organizations have devised risk plans to prepare for and respond to
potential threats. Businesses should adapt in three stages: first, by meeting immediate pandemic
demands; second, by redistributing resources for stability; and third, by implementing new
practices to ensure long-term success.
3
Introduction
The innovative risk management paradigm aids organizations in detecting, evaluating,
and managing enterprise-wide risks. The Amazon corporation faces numerous financial,
technical, and strategic threats. Risk management is an ongoing process that entails searching for
potential dangers, analyzing them, and developing countermeasures based on what they reveal.
The Framework employs risk management methods to supply businesses with the ability to
understand and prioritize cybersecurity options. The Framework is adaptable and flexible enough
to provide a risk-based implementation for a wide range of cybersecurity risk management
techniques.
Risks can be perceived as either a loss or an opportunity, depending on their outcome
(Hagen, 2018). Globalization has increased recently, encouraging businesses to recruit and retain
highly qualified employees. Strategic leadership encompasses many tasks, including planning
and preparation, strategic recruiting, employee training, development compensation
management, efficiency, worker relations, health care, employee satisfaction, and the provision
of employee services. The COVID-19 pandemic has increased the need for cyberattack
protection and the demand for more stringent cybersecurity systems. Several nations have
implemented non-pharmaceutical measures, such as social isolation, confinement, and
quarantine, to combat the rapid spread of the disease.
Flights have been canceled, travel restrictions have been imposed, and large public
gatherings and social events have been made illegal. The COVID-19 pandemic has caused a
significant slowdown in global economic activity, resulting in furloughs, cutbacks, and an
increase in the unemployment rate in several nations. With new operating procedures and special
4
new regulations, healthcare facilities have remained operational, and no one knows when this
new functioning will end. Amazon was one within the retail business sector that remained
operational throughout the pandemic. Leadership within the company had to develop strategic
ways to ensure customer satisfaction by receiving consumer goods promptly and keeping up with
supply and demand.
Strategic Leadership
Strategic leadership is the process of developing a future vision, communicating it to staff
members, inspiring and motivating followers, and engaging in strategy-supportive interactions
with peers and subordinates. Managers exercise strategic leadership when they utilize their
creative problem-solving abilities and strategic vision to assist team members and an
organization in achieving long-term objectives. It emphasizes the symbolism and social
construction of top-level executives, who represent the dominant coalition within the
organization. Idealized Influence offers a strategic vision, a sense of mission, insight, and
knowledge. Inspirational Motivation conveys high expectations, articulating and representing a
distinct vision, optimism, zeal, and organizational culture. Organizational culture consists of
shared assumptions, values, and beliefs reflected in corporate practices and objectives.
The theory of managerial cognition (Adobor et al., 2021) demonstrates that a manager's
response to an incident in the external environment is influenced by what the manager observes
about the event. The framing theories indicate that how managers frame issues is most crucial
during periods of uncertainty. Framing is how individuals develop a specific conceptualization of
an issue or reorient their thinking. At least three techniques, such as issue selling and prospective
sense-making, can be employed by strategic executives to frame issues. The focus of issue
marketing is how managers determine that an issue is significant and has consequences for
5
organizational performance. Prospective sense-making entails the engagement of actors with
uncharted and unfamiliar trends and allows the protracted and conscious articulation and
elaboration of tentative interpretations. Prospective sense-making is a strategy used to pacify
situations within an organization attempting to make sense of a disruptive event. It requires
managers to be attuned to the event and aware of their previous mental models so that the past
does not dictate how organizations and managers interpret new events. Managers can frame
events as both a threat and an opportunity, causing employees and stakeholders some distress.
Sensemaking focuses an organization's attention on rapidly identifying and comprehending
pertinent threats, which should positively influence how it responds to environmental
disturbances.
Given the uncertainty of the future, the most critical lesson from CAS is that leaders
cannot rely on traditional control of their followers by proposing a vision for the future. Under
conditions of uncertainty, strategic leaders must foster an environment conducive to self-
organization. Self-organization is predicated on localized control, which means that individual
actors interact directly with one another. According to Adobor et al. (2021), strategic leaders can
cultivate self-organization by providing simple rules for interaction and encouraging novelty.
Self-organization presupposes self-management and self-leadership on the part of employees and
necessitates a degree of democratization and shared leadership to increase intrinsic self-
motivation. It also improves self-directed behavior, local action, and emergent behavior, which
should increase the strategic adaptability of an organization. There are at least three main ways
for organizations to enhance their adaptability. Organizations can increase their adaptability by
incorporating redundancy. The rate at which an organization can modify its behavior in response
to a disturbance is determined by the organization's capacity for learning, which is a crucial
6
factor in its adaptive capacity. Additionally, the loose coupling can increase an organization's
adaptability.
According to Adobor et al. (2021), a system is loosely coupled if its elements share few
variables in common or if the variables are feeble compared to other factors that influence the
elements. Weak ties promote the search for non-redundant information, whereas strong ties
encourage conformity, impede the development of new ideas, and inhibit creative thought.
Adaptive capacity is directly related to a system's ability to recognize, mobilize, and stabilize a
response to prospective disruptions, which should positively affect strategic adaptive capacity.
According to the Black Swan theory, robustness can defend against disruptions caused by
unanticipated, high-impact events.
Redundancy can also contribute to robustness, as function duplication increases the
likelihood of survival during a disturbance. Robustness enhances a system's ability to detect and
withstand disturbances without compromising integrity. In an era of Black Swans, the capacity of
a system to adapt and transform may be more essential than its robustness, as organizations
suffer the most damage from unpredictable disruptions. Resilience refers to a system's capacity
for readiness, response, recovery, development, or transition to a new and more desirable state
following a disturbance. In the organizational sciences, resilience has been discussed as a tool for
managing trauma and disruption. Organizational resilience is the firm's capacity to effectively
assimilate disruptive surprises, develop situation-specific responses, and ultimately engage in
transformative activities to capitalize on them. A resilient organization is characterized by
redundancy, resourcefulness, effective communication, and the ability to self-organize in the face
of unanticipated demands, according to (Adobor et al., 2021). Organizations can promote
7
individual resilience by fostering a climate in which employees feel empowered, and a culture
that fosters optimism and social cohesion also promotes individual resilience. There is team
resilience when there is social support, cohesion, and network connections within a group.
Individual and team levels of resiliency exert an upward influence on organizational resiliency.
Flexible structures, collaborative leadership, and organizational learning facilitate it.
Pérez et al. (201) propose cognitive, behavioral, and contextual resilience as sustaining
organizational resilience. Cognitive resilience prepares an organization to cope with uncertainty,
whereas behavioral resilience is the capacity to develop and implement new methods of
operation in response to a disruption. Contextual resilience is the capacity to mobilize quickly
and draw on its stockpile of social capital in the event of a disruption. An organization’s
resilience ensures it can withstand disruptions, adapt, and transform in response to change.
Organizational learning is essential for managing uncertain situations. Consensus exists
that complexity limits the utility of scientific knowledge and that learning based on extant mental
models is unsuitable for managing uncertainty. Second and triple-loop learning is a second and
more effective mode of learning. During sense-making, double-loop learning acknowledges
uncertainty as the new reality and encourages the development of new alternatives. Triple-loop
learning surpasses double-loop learning by fostering the formation of novel worldviews in
response to novel events.
Strategic executives must prioritize their organization's business model, a component of
organizational resilience. Uncertainty and high-impact events, such as COVID-19, can disrupt a
business model. The challenge for businesses is to simultaneously manage the impact of
uncertainty and disruption on customer value-creation drivers and profit models. In order to
prepare organizations for disruption, strategic executives must focus on their business models.
8
They must abandon the conventional belief and mentality that developing flexible business
models is only required in extreme environmental change and turbulence. Using formal design
processes, organizations can configure and recalibrate their business models.
Ambidexterity is the capacity to manage existing systems and adapt to environmental
changes simultaneously. Leaders with a strategic mindset must be able to detect changes and
identify opportunities to respond to them. As it confers flexibility and robustness to the business
model, business model resilience should positively influence strategic adaptive capability. In an
era of "black swans," this conceptual research presented some ideas for strategic leadership
(Adobor et al., 2021, page number). Strategic leaders play a crucial role in constructing adaptive
organizations and dynamic capabilities that support the deployment of flexible business models
to ensure the continued delivery of value and profit under uncertain conditions and during
disruptions.
Strategic leaders and organizations may require new worldviews more consistent with
unpredictability and uncertainty considering the new normal. To be successful in the face of
significant environmental uncertainty and unpredictability, strategic leaders may need to develop
new cognitive mechanisms and mental models, broaden their often-narrow conception of
environmental turbulence in terms of technological shifts, and demand to include the possibility
of novel forms of disruption when engaging in business model innovation. Traditional
management theories emphasize avoiding uncertainty, whereas leadership theories, such as upper
echelon theory, pursue control and emphasize effectiveness. In organizations still predominately
bureaucratic, reconciling traditional and emergent leadership approaches would be difficult, and
managing this "entanglement" requires new leadership skills. Complexity leadership is a novel
concept, but it may contribute to developing novel insights regarding strategic leadership under
9
ambiguity. The interpersonal network structure of a company to its strategic adaptability. This
result is consistent with previous findings regarding the significance of the upper echelon.
Risk Management Plan: Amazon
Amazon sales soared in the wake of the pandemic. Amazon had to hire
more employees to keep up with the influx of sales. In the age of many companies outsourcing to
companies, such as Amazon, more companies are reverting to the original security model
provided by contractors (Wright, 2017). Amazon has expanded its reach through tv, warehouse,
and online sales. Amazon's first-quarter 2021 sales rose 44% to $108.5 billion (Weise, 2021). It
earned $8.1 billion, up 220 percent from the previous year. Merchant revenue from its website
and warehouses rose 64% to $23.7 billion. Its "other" business area, mainly advertising, grew 77
percent to roughly $7 billion (Weise,2021). Amazon reported 200 million Prime subscribers and
about $7.6 billion in subscription revenue for that program and others in the quarter. Amazon has
run its warehouses closer to capacity, while delivery drivers have made more stops and spent less
time driving between customers. Amazon sold 44% more things but just 31% more to fulfill
them. Amazon Web Services earned $13.5 billion. Amazon spent about $50 billion on capital
expenditures last year to grow (Weise, 2021). Amazon's founder and CEO, Jeff Bezos, claimed
AWS is a $54 billion annual sales run rate business competing with the world's most outstanding
technological companies. Amazon lost 27,000 workers to 1,271,000 between December and
March. Amazon increased compensation for half a million workers and hired more to keep up
with supply and demand. Marketing the perks of working for Amazon would continuously bring
in new hires to keep the number of workers needed and promote product sales at a consistent
rate.
10
Amazon is developing advanced digital fashions and Luxury Stores as the apparel
industry undergoes a digitally driven, solution-oriented transformation (Demek et al., 2018).
Synchronizing ADFs, Luxury Stores, and on-demand manufacturing can result in a cloud-based
platform for fashion that enables personalization and customization on demand. Amazon's effort
to transition to an omnichannel strategy based on seamless switching primarily results from
learning orchestration externality. Amazon's patented on-demand apparel manufacturing (ODM)
can assist luxury brands in streamlining their supply chains, despite their reluctance to
collaborate with Amazon. Digital innovation plays a significant role in the emergence of
omnichannel as a new approach to channel integration.
Enterprise Risk Management
According to research, financial performance, risk, diversification, ownership
structure, philanthropy, and board quality can all affect a company's reputation. Enterprise risk
management (ERM) systems are recommended by several consulting companies for reputation
management. Academics stress the need to test this idea. These studies aim to develop arguments
for the relationship between enterprise risk management and corporate reputation, test their
validity, determine which audit committee characteristics influence enterprise risk management
system quality, and investigate the role of enterprise risk management system quality as a
mediator. The hypothesis that ERM system quality affects a company's reputation is examined,
along with its theoretical support. It proposes a relationship between ERM system quality and
business reputation and argues that audit committee features affect ERM system quality.
Additionally, audit committee characteristics affect ERM system quality.
11
Reputational risk is the risk of harming a company's reputation. Company risk. The issue
arises when a company's behavior differs from stakeholders' expectations. In a crisis, this gap
could damage the company's reputation. Every risk a business faces—financial, operational,
environmental, economic, or otherwise—increases its reputational risk.
Enterprise risk management (ERM) anticipates probable events that could affect a firm
and manages risk to stay within its acceptable risk level (Shad et al., 2019). It involves
identifying, evaluating, and prioritizing a company's risks, mapping them, developing
mechanisms to address them, and continuously monitoring the system to ensure efficiency and
update it with new strategies and environments (Pérez-Cornejo et al., 2019). Organizations
struggle to recover from reputational catastrophes. Enterprise risk management (ERM) solutions
lower the possibility of a company crisis and its reputational harm. Even if the previous study
showed that fewer risks are better for a company's reputation, the literature has focused on
financial concerns. Audit committees review enterprise risk management (ERM) systems, which
positively impact a firm reputation. The research shows that ERM system quality increases with
organization size. Agency theory states that governance systems should encourage diverse
stakeholder interests to cooperate and distribute value fairly (Pérez-Cornejo et al., 2019). These
protocols should also foster stakeholder collaboration. The efficiency of the audit committee
depends on its makeup, independence, knowledge, and attentiveness. These traits affect the
conduct and performance of boards of directors and their committees (Shad et al., 2019). These
traits impact organizational performance. Independent directors have no ties to the company's
managers or owners.
Biblical Integration
12
Throughout the Bible, God shows us how to deal with business, risk, and opportunities.
In the 4th chapter of Esther, Queen Esther, the wife of King Ahasuerus, risked her life to save her
people, the Jews. God had allowed her to be groomed by her guardian Mordechai to become
more significant than her circumstances as an orphan. Ester rose to become Queen of Persia. She
had all the Jews fast for three days before she was to approach her husband, the King, not to kill
the Jews as the Haman had plotted.
Queen Ester went to her King after three days, which was a risk because only those
summoned by the King could approach him. She could have been executed, but she took the
opportunity and risked saving her people. She did so, and the King stopped the execution of all
Jews. Haman, who had plotted against the Jews, had been executed instead, and Mordecai had
taken Haman’s place as the King’s advisor. Queen Ester created a risk management plan by
fasting for three days and planning how to approach the King to save her Jewish people from
execution. She was led by wisdom to face the risk and seize the opportunity to speak with the
King. In our personal and professional lives, we make decisions about three things: how to
resolve problems, mitigate risk, and capture opportunities (Hagen, 2018). Queen Ester’s story
showed this to be very accurate.
Conclusion
As a result of the pandemic, specific industries experienced terrible financial
catastrophes, which turned out to be a blessing in disguise for Amazon. Amazon became one of
the world’s most significant online retailers due to their online sales, making it one of the largest
employers in the United States. This occurred at a time when other retail businesses were facing
bankruptcy. Amazon has had many problems, but it does not appear to have prevented them
from reaching profitable sales. During the pandemic caused by Covid-19, one of the challenges
13
they encountered was receiving reports that personnel were not safeguarded adequately during
the outbreak. Because of this, there is now a problem with employee safety and satisfaction with
the organization. Although these problems occur, there is a continual increase in the number of
sales, and new employees are starting each week. The pandemic showed that one must be
prepared in and out of season, as 2 Timothy 4(NIV) teaches.
14
References
Access your bible from anywhere. BibleGateway.com: A searchable online Bible in over 150
versions and 50 languages. (n.d.). https://www.biblegateway.com/
Adobor, H., Darbi, W. P., & Damoah, O. B. (2021). Strategy in the era of “Swans”: The role of
strategic leadership under uncertainty and unpredictability. Journal of Strategy and
Management. https://doi.org/10.1108/jsma-09-2020-0242
Demek, K. C., Raschke, R. L., Janvrin, D. J., & Dilla, W. N. (2018). DO organizations use a
formalized risk management process to address social media risk? International Journal
of Accounting Information Systems, 28, 31–44.
https://doi.org/10.1016/j.accinf.2017.12.004
Hagan, B. W. (2018). The problem, Risk, and Opportunity Enterprise Management. Probabilistic
Publishing.
Pérez-Cornejo, C., de Quevedo-Puente, E., & Delgado-García, J. B. (2019). How to manage
corporate reputation? The effect of Enterprise Risk Management Systems and audit
committees on corporate reputation. European Management Journal, 37(4), 505–515.
https://doi.org/10.1016/j.emj.2019.01.005
Rehman, A. U., & Anwar, M. (2019). The mediating role of enterprise risk management practices
between business strategy and SME Performance. Small Enterprise Research, 26(2),
207–227. https://doi.org/10.1080/13215906.2019.1624385
Saeidi, P., Saeidi, S. P., Sofian, S., Saeidi, S. P., Nilashi, M., & Mardani, A. (2019). The impact of
enterprise risk management on competitive advantage by the moderating role of
Information Technology. Computer Standards & Interfaces, 63, 67–82.
https://doi.org/10.1016/j.csi.2018.11.009
15
Shad, M. K., Lai, F.-W., Fatt, C. L., Klemeš, J. J., & Bokhari, A. (2019). Integrating
sustainability reporting into enterprise risk management and its relationship with
Business Performance: A Conceptual Framework. Journal of Cleaner Production, 208,
415–425. https://doi.org/10.1016/j.jclepro.2018.10.120
Shao, Z. (2019). Interaction effect of strategic leadership behaviors and organizational culture on
IS-business strategic alignment and enterprise systems assimilation. International
Journal of Information Management, 44, 96–108.
https://doi.org/10.1016/j.ijinfomgt.2018.09.010
Songling, Y., Ishtiaq, M., & Anwar, M. (2018). Enterprise risk management practices and firm
performance, the mediating role of competitive advantage and the moderating role of
Financial Literacy. Journal of Risk and Financial Management, 11(3), 35.
https://doi.org/10.3390/jrfm11030035
Thomas Nelson. (1991). King James Bible.
Weise, K. (2021, April 29). Amazon’s profit soars 220 percent as pandemic drives shopping
online. The New York Times. https://www.nytimes.com/2021/04/29/technology/amazons-
profits-triple.html
Willumsen, P., Oehmen, J., Stingl, V., & Geraldi, J. (2019). Value creation through project risk
management. International Journal of Project Management, 37(5), 731–749.
https://doi.org/10.1016/j.ijproman.2019.01.007
WRIGHT, L. A. N. C. E. (2018). People, risk, and security: How to prevent your most
significant asset from becoming your greatest ... liability. PALGRAVE MACMILLAN.
