This risk management assignment is focusing on the relationship between the organizational risk and strategy.

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Risk Management Assignment Exploring The Relationship
Between Threat, Strategy And Adaptation To Succeed
1. Introduction
This risk management assignment will be focusing on the risks that organisations are
facing. They are also trying to mitigate it through some strategies. These will be helpful
in succeeding the problems. There is a scope of adaptation which will also be solving
the issues. The risks always give a potential for losses and it mainly happens due to
uncertainty (Sadgrove 2016). It becomes quite difficult for companies to find out the
risks. There are many levels of management in the organisation and keeping a check
on each of them is not possible. The leaders do lose some values that were gained
earlier. It can be like financial wealth, the status of the organisation and well-being of
people. The company sometimes takes the risk because they feel that success can be
gained through it. There is some relation between risk and strategy. Further concept of
risk, strategy and adaptation will be studied in details.
2. Organisational Risk explored in risk management assignment
When there are some losses due to uncertainty then it is known as organisational risk
(Sadgrove 2016). This includes the top level of management. There are some materials
included in risks. They are legal, reputational, strategic, security, regulatory and
operational risks. There is a broad category in organisational risk. This is applied to
events so that the goals and objectives cannot be achieved. There are four main types
of risks in the business. They are:
 Strategic Risk (Due to competitors coming in the market)
 Financial Risk (Rise of interest rate on the business loan or non-paying
customers)
 Operational Risk ( Key equipment theft or breakdown)
 Compliance and Regulatory Risk (Introducing new legislation or rules)

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The above risks might not be rigid and might fall in some categories of business. There
are data protection risks in organisations. This especially happens in the IT companies
where they have to review their compliances and operations. The risk in organisations
arises due to some sources. They are:
 Management of employee risk (handling a sufficient number of staffs and their
safety)
 Environmental risks (Natural Disasters)
 Risks of health and safety
 Instability in the economy and politics in the foreign markets for exporting goods
 Commercial risks (key customers or suppliers failure)
It is important for organisations to understand the importance of risks. This will allow
them to handle the finance and other ramifications. Risks might have positive and
negative effects on the company (Hillson and Murray-Webster 2017). It is difficult to
define the objectives of the companies without identifying the risks. There are many
different ways of identifying the risks in an organisation. The leaders have to break
down the big picture in small ones. This will allow them to access all the departments
easily. An expert should be consulted like accountant, financial advisors and insurance
broker. Both internal and external research will be helpful in knowing the risks well. The
feedback from the employees must be taken on a regular basis. It is usually seen that
employees are the most valuable resources for finding out the risk. The complaints from
the customers should not be taken lightly.
These days’ organisations are not following the traditional method of risk management.
However, they are following the enterprise method of risk management. It is because
the approach is holistic. The overall risk in the organisation is studied properly. This
method used in the risk management assignment helps in increasing sustainability and
lower risks are focused. The companies are assessing the asset portfolio which
includes employees, suppliers, innovative processes and customers (Bromiley et al.
2015). There are certain strategies to mitigate risks.

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3. Organisational Strategy
The set of actions that the organisations are taking for achieving their long term goals is
known as an organisational strategy (Johnson 2016). These plans are taking a lot of
time and many levels of the companies need to be involved in this process. There are
certain reasons due to which the strategies of the companies fail. It can be a lack of
understanding between the employees, insufficient resources, poor decisions on
finance and no proper planning on the projects. Organisational strategies are important.
The leaders should ensure that the priorities are set in the correct direction. It is
important for everyone to be on the same page. Decision making should be clear and
aligned with the business.
At the time of developing the organisational strategies, there should be a clear
understanding of the marketplace, customers, competitors, competencies and
weaknesses. This will also provide clarity in the mission and vision of the organisation.
An analysis can also be done on priority issues. There are four different types of
strategies that can be followed (Van Staveren 2018). They are the defender, prospector,
reactor and analyser. In the case of strategies, the corporate culture of the companies
needs to be considered. For example, the strategies of Google support depend on their
constant development and innovation. Pricewaterhouse Copper is having a culture
which is there is a band between the employees of various generations. They are also
trying to overcome the differences.
4. Relationship between risk and strategy of the organisations
It is stated in this risk management assignment that there is some link between the risk
and strategies of the organisations. One of the strategies is to plan on the business
accordingly. Both risk management and business planning are not separate activities
(Hillson 2017). The companies are making many action plans for managing their risks
and enhancing their opportunity. The business planning cycle is having some key
activities that also include the audit program of the organisation. Hence, risk

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management will be identifying these activities and finding ways of controlling it. There
are some new controls that can also be implemented.
A careful analysis is always required by the companies to handle the risks. There is a
continuous process of feedback taken from the employees (Franzetti 2015). It is difficult
to mitigate the risks without an analysis. It will lead the companies to suffer some
losses. It is important to protect the operations, profitability and international trade
ventures. The strategies can be developed for managing the risks. Hence, the below
categories must be considered carefully.
 Avoidance of Risk: There are options available to the organisation from
refraining from the activities which might be having some risks. If companies are
setting up a subsidiary in the foreign location which was earlier a place of
chemical manufacturing then there is a risk. There can be some environmental
damages related to it. However, it is difficult for practitioners to use the avoidance
formula in each of the cases. It would simply mean giving up on the opportunities
that the company was getting. It could also be profitable for working worldwide.
 Reduction of Risk: By finding some methods, risks can be reduced. It is
because there are chances of a loss occurring or severity of a loss. One of the
common ways discussed in this risk management assignment for responding
against the risk is by installing a security system (Teece, Peteraf and Leih 2016).
However, the challenge is to ensure between the loss potential from theft and
cost and effectiveness of the security system. There are some other ways of
handling the risk. It is by adopting some practices. Like for example, in IT
companies, software development is risky. But these days the software is
developed and delivered in an incremental way. In this way, the performance can
be tested before the next step is taken. Outsourcing the functions is another way
of reducing risks in organisations. These functions are handled by those who can
manage and reduce risks.
 Risk Transferring: It simply means that the risk is transferred to another party
who is ready to take the risk. This can be done through some contacts. Like in

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construction projects when the builder assumes that there is a risk and it is
transferred to someone else. They are then searching for some hedging
strategies, derivatives and futures contracts. The pooling of risks can be done.
Groups may decide to spread the risks among their members. Only one person
will not be suffering the loss.
 Retention of risk: Organisations do have a choice of accepting some risks.
There might be some losses which will come on the way. This is known to be a
viable approach mainly to the small risks. Here the mitigation cost or insurance
would be greater than the total losses that would be sustained. All risks cannot
be transferred or avoided (Sweeting 2017). Hence, by default, it needs to be
retained. It might include some risks that are large and cannot be insured.
There are some examples used in this risk management assignment which are
explaining the risk and strategy relationship. It is usually seen that economic changes
are mainly related to the political risks of the companies. There are times when the
government brings some changes in the policies. The taxes of some particular product,
company or industry might increase. The ability to make a profit in companies reduces
due to the downturn or the changes. In the year 2000, a risk issue occurred in the
telecommunication company named Econet. There was some business risk due to the
government of Zimbabwe. It was the unstable economy, high rates of inflation and
opaque government. However, the company had a strategy for handling the situation.
They diversified and entered the markets of Africa. They were focusing on handling the
high rates of inflation in Zimbabwe. So the company was sending their employees and
technicians to the new countries where it was operating. This helped in saving a lot of
money to the technicians. It also helped the company to retain its best people. This
example explained that if there is a risk then some solution is also available. It is not
possible to keep these two factors away from each other. It showed that the company
handled the situation and also gained some profitability. They did not shy away from
looking at the problem.

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Uber is one of the biggest companies in the world. They are also facing some risks in
their business. They are facing competition from many companies in the world. They
are having difficulty in switching the cost between the products. Uber is dropping their
prices at the time when they need to hit the gas. The company illustrated in this risk
management assignment was having risks because they were unable to match the
heavy subsidies and discounts. In the year 2018 Uber had lost $3 billion. This thing is
getting worse for them. They are trying to manage the risk by increasing their
operational expenses. But they might not be achieving profitability. This is not an
uncommon thing for the company. They are trying to add efforts by generating revenue.
The drivers in the company are not being known as independent contractors. They are
being known as employees. Hence, there are many legal matters coming up globally.
The company is using different kinds of technologies and strategies for mitigating the
risks coming on their platform. The company is trying to delete the fraudsters. They are
using some tactical methods and improving their experiences. The product is also being
improved by Uber. They are not compromising on the needs of the users. Uber is
having a machine learning model that is collaborating with data science and analytics to
provide top services (Franzetti 2015). The risk engine is helping the drivers and an
assessment is being run on the frauds. There is a data-driven decision-making system
in the company and so they are able to manage the risks. These are the strategies of
the company for improving their risk issues and profitability.
5. Adaptation enabling the organisation to achieve strategic
objectives
The rapid changes occurring in the global economy demands that the organisation
evolves to maintain economic sustainability. Risk adaptation explored in risk
management assignment is currently being integrated into the business processes of
organizations all over the world to remain abreast and attuned to the identified changes
in the global economy. Risk professionals in different companies are tasked with the
responsibility of adjusting to an uncertain environment, incorporating the digital changes
in risk management and the shifts in the intrinsic culture of the company.

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Complex Environment
In this facet, the environment is changing dynamically. Technologies fresh in the market
are becoming obsolete even before companies can adopt them. Clients are asking for
immediate results and gratifications. There is a new business threat almost every day in
terms of innovations introduced by competitors in the market. It is discussed in this risk
management assignment that drastic evolvement of technologies is posing veritable
challenges to risk professionals of the organisation for the high volumes of data
transfers and cleansing needed each time. The risks associated with cyber-attacks as
well as the enhanced abilities of hackers are making companies more vulnerable than
ever (Zhang, Welch and Miao 2018). The companies in order to adapt to these
strategies should conduct and analysis emphasizing the risks and values of
technologies before jumping on the board and making rash decisions. Risk
professionals tackle thus challenges by measuring the costs and benefits before taking
the ultimate decision. If instead of new instalments a strategic up gradation in software
can serve the purpose is decided by risk professionals.
Digitisation in Management
In order to tackle the challenges and threats posed by the external environment risk
professionals are adopting the strategy of implementing flexible and robust Risk
Management Systems to deal with all the facets of risks. With the adoption of Risk
Management Systems in the business processes, there is a clear focus on high-value
strategic activities (Bloemen et al. 2018). The policy has been crucial in making key
stakeholders realise the underlying factors driving the organisation as well as the limited
areas in which the company should concentrate. Routine manual processes for instance
claims processing are being automated through the new programs. Hence, it is provided
in the study of risk management assignment that risk management teams within an
organisation are empowered with sufficient time and efforts to concentrate on
formulating risk protection and measured mitigation strategies. Dashboards and reports
automated and being attuned to real-time are providing companies with the best
possible information empowering the decision-making process. The increase in access

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to data has resulted in enhanced analysis for companies. Visual tools adopted by
companies are making them realise the costs and prospective benefits and identifying
the specific trouble areas. For instance, Apple took the risk of introducing Air Pods
without wireless after calculating the data collated depicting expectations of customers.
Changes in Culture
Risk management is being embedded in the culture of organisations rather than being
perceived as a separate activity. Collaboration between risk teams and key
stakeholders of the organisation are being arranged and even multiple risks in the
supply chain of the business are being considered(Goldstein et al. 2018). The various
structures of contemporary businesses including operations, marketing, legal and
finance are incorporating the methods of risk management to tackle the dynamic
changes occurring in the industry.
6. Conclusion
There are risks in the organisation. However, it is important to identify them and take
some acts. This risk management assignment is focusing on the relationship between
risk and strategy. Both of them are some link with each other. Risk management is
possible only when companies are making some strategic plans. This will also help
them in focusing on their goals and objectives. Firstly, a brief introduction is given on the
topic. Then the basics of risk and strategy in the organisation were studied in details.
After this, the relationship between risk and strategy was reflected and was supported
by an example. It is also seen that adaptation is necessary for the organisation. This is
because it is helping the leader to achieve the strategic objectives of the company. In
this way, a lot of knowledge on risk management, strategic planning and adaptation was
gained.