In an increasingly dynamic environment, strategic management of risk Dissertation

In an increasingly dynamic environment, strategic management of risk has become a critical competency for organisations. From th - Dissertation Example It has also grown from a hot topic, one that was dealt with only by the most prestigious companies to one that has become a necessity to every company irrespective of its size and nature of business. Companies today face a considerable number of risks also because of international factors such as globalization, outsourcing and intense competition. Therefore, it is important for all companies to satisfy their risk needs through a formal risk management system. However, careful analysis and planning must precede the entire operation. This not only helps in smoother implementation, companies can develop plans to tackle some of the inherent limitations and disadvantages of the system before hand. It will also help the company determine the best course of action with regard to the risk management strategy eventually adopted. Once selected, the actual system is guided by a number of standard processes and phases each with its own set of requirements and objectives. The entire process is of a cyclic nature that starts with the identification an analysis phase and ends with the monitoring phase for a company new to the process, whereas in existing systems all the phases are carried out continuously. This is the only way to ensure effectiveness of the system. However, it need not be an overhead and the entire process can be integrated into the schedules of the employees of the company. Senior management involvement also goes a long way in ensuring the effectiveness of the system. Once implemented as per guidelines and having taken appropriate precautions, it is possible not only to achieve a safer degree of operation within the company; other benefits can also be reaped. For instance, risk management systems can offer one of ways of developing a long term competitive advantage which is critical in today's competitive environment. Risk management systems are still evolving and are in a dynamic state. Future work that establishes better guidelines for the implementation w ill assist several companies in understanding and implementing their own systems that is based on a unique structure and satisfied demands. 1. Research Question â€Å"In an increasingly dynamic environment, strategic management of risk has become a critical competency for organisations. From the perspective of an Operations Manager, present a case to the board of directors for adoption of a formal risk management process.† 1.1. Aim The aim of this report is to provide and propose to the senior management a detailed case for adopting a formal risk management process. 1.2. Objectives To achieve the aim of the report following objectives will have to be met: A. Demonstrate the importance of Risk Management Process in an organisation B. To present the advantages and disadvantages of adopting a formal risk management process C. To Analyse and Discuss why the organisation should adopt a formal risk management process D. To Conclude the findings of the report and present recommendat ions to the board 2. Literature Review