Using an example of your own critically analyze the responses to Organizational Risk in modern corporations.

 

Organizational risk in businesses refers to the factors that affect the organizations income. They hinder the business from attaining their objectives. There are responses to deal with such risks employed by modern companies. These measures help companies to mitigate the chances of risks and effectively respond to them.

Step-by-step explanation

Most modern corporations have established codes of conduct that monitor and guide people's behavior in their line of duty. This is done through the identification and management of potential risks. Customers are attracted to entities that offer a high level of ethical standards. Companies have also invested in safety standards at the work place which reduces the possibility of injuries. For example, an energy company reported a reduction in the number of casualties after installing improved safety measures. These companies employ the enterprise risk management framework to identify potential risks around the corporation and implement measures to deal with those risks. Furthermore, products such as cars that guarantee safety for their users record an increase in sales. Pharmaceutical companies monitor their potential of risks through addressing the quality of their products and seeing to it that these products comply with the general health requirements. This reduces the risks from defective products and guarantees increased returns. Organizations like JPL have developed risk review boards which challenge the products' design and risk-management measures. Such organizations face multiple risk as they strive to enhance technological advancements. The risk-review experts analyze the risks throughout the development period. They also ensure that they analyze the organization's budget in relation to risk management. The boards assist ,modern corporations to understand and focus on risks and evaluate their performance based on such risks. In the event of a risk, the organization should have enough money to mitigate the problem. Companies like the Canadian electricity company involve their employees in risk management strategies. The company runs annual meetings where employees identify and rank the most hazardous risks and present them to the company's principals. Employees are often encouraged to voice out their ideas on how to respond to risks in the work environment.

Investment banks need experts who work within the organization to monitor business risks regularly due to the ever changing dynamics of the business market. The JP Morgan Private Bank took this initiative when its finances were declining. They employed risk managers who reported to the executives on potential risks and how to manage them. These managers formulated a risk model to assess how proposed sales would affect the risk of the whole organization. They also identify risks that could make the organization fail to meet their goals. Risk managers ensure that the organization is cushioned form uncertainties in the market. These risks could be financial or strategic. For example, Airline companies are protected from future fluctuations in oil prices. They are therefore able to maintain an increase in income when the oil prices increase. . Modern corporations invest in self-testing to help company principals to analyze whether the company has the capacity to bear risks without affecting its productivity. Most organizations have used this approach to cater for behavioral biases through making informed decisions. Modern hi-tech corporations use supply-chain risk mitigation to get increased cost savings and improved margins. Such companies involve the use of risk-educative contracts, making distributers to decrease the costs and risks of trading with the production company. These measures give assurance to key shareholders during uncertain times such as market shortages, and improve the predictability of prices for goods that have cost volatility. They also develop a risk operating model which maintains the probability of risks and encourages better compliance within the organization.