ASSIGNMENT- Strategic Risk Management
Questions to answer about the Strategic Risk Management:
1. How does an organization determine the right amount of risk for the value it is
trying to create for stakeholders and how should it communicate its risk policy to
stakeholders?
Risk is a futuristic precaution that a business must consider. It must be well planned
and well managed in order to be efficient enough. Also, risks must be conveyed before,
during and after a project in order to secure the stakeholders ideas, opinions and
expectations really does matter. A risk can be managed by considering the following steps:
(1) Planning, (2) Organizing and (3) Writing. A back up plan for every risk that might come,
organizing/analyzing the financial statements and writing down the essential advantages
and disadvantages that solely reflects the financial statement. With these being followed, an
organization may be able to keep track of its internal and external risks that is essential
enough in valuing right amount of risk that an organization must have. Financial Statements
are the living weapon that an organization must take a look upon. The ups and lows of the
statements will help them determine if the organization is at risk or not. A right portion of risk
is distributed to its stakeholders based on Earnings at Risk (EAR), Value at Risk (VAR) and
Economic Value of Equity (EVE). It can only be determined by assessing risk analysis
towards the financial performance of an organization. An analysis became easier once an
individual used Risk Strategy. Very reason why a Business Strategy is very important in
conducting an analysis.
On the other hand, communication is said to be the bridge for understanding. This is
the very reason why risk policies and management must be well communicated to its
Stakeholders, with accountability and transparency. But how should it be communicated?
(1) There must be an involvement of the team >> It is important that there must be an
involvement with the team. This will build strong relationship and communicates ideas and
thoughts with each other. Once the relationship is restored, risk policies are applicably
instilled in their hearts and minds.
(2) It is important to consider the location >> “A distant relationship make it harder to
, Communicate, for the absence of presence isn’t strong enough to withstand”. A
stakeholder’s location must be considered well. But in the modern world that we have today,
there are applications and systematic tool that is used in order to communicate to
stakeholders in different areas of the world. This can be done through skype, Gmail, zoom
meetings and amongst. This item is correlated to the next factor which is:
(3) Utilizing the use of Technology >> The innovation of technology is prosperous
enough that made it possible for distant regions to communicate. The use of technology
made it easier to communicate with the valuable people that we wanted to talk with. With
technology, the dissemination of risk policies is easily distributed to stakeholders. Risk
analysis technology molds an individual a team member with the capability to
communicating to stakeholders through quantitative analysis. There are also different
technology tools and innovations that helps disseminates the risk policy to its stakeholders,
wherever they are located in the phase of the universe.
(4) Using reports as an alert to common risks >> Project Managers made it sure that
communications are efficient and effective enough for the both sides. That stakeholders and
the organization are well engaged with each other. And that stakeholders are well equipped
and knowledgeable enough of the organization risk projects and risk policies. This can be
done by having a regular project report. With this, project managers (who are obliged in
disseminating the risk policies to stakeholders) can keep track of the common issues that an
organization undergoes. Reports towards the potential issues with interactive links is also
vividly track. With these reports, it can be a subject for submission and an instrument for
making sound and meaningful strategy.
2. What is the relationship between effective strategic risk management and
improved financial reporting and transparency?
Strategic Risk Management plays a vital role in managing risks that greatly affects a
company’s ability to achieve its strategic goals and objectives. It’s not an easy task to obtain
an effective and efficient strategic risk management, for it takes several steps to go along
with. A company must be able to well established the context, as well as, analyze and
identify that will help them to thoroughly assess and monitor the subject for a treatment. It is
significantly important to consider a strategic risk management effective because it serves
as a security in a company. Wherein it offers the initiative to reduce the possibility of risk
and its potential impact that might come in a certain company. By implementing risk in a
company, an organization can manage its management which reduces unexpected and
Questions to answer about the Strategic Risk Management:
1. How does an organization determine the right amount of risk for the value it is
trying to create for stakeholders and how should it communicate its risk policy to
stakeholders?
Risk is a futuristic precaution that a business must consider. It must be well planned
and well managed in order to be efficient enough. Also, risks must be conveyed before,
during and after a project in order to secure the stakeholders ideas, opinions and
expectations really does matter. A risk can be managed by considering the following steps:
(1) Planning, (2) Organizing and (3) Writing. A back up plan for every risk that might come,
organizing/analyzing the financial statements and writing down the essential advantages
and disadvantages that solely reflects the financial statement. With these being followed, an
organization may be able to keep track of its internal and external risks that is essential
enough in valuing right amount of risk that an organization must have. Financial Statements
are the living weapon that an organization must take a look upon. The ups and lows of the
statements will help them determine if the organization is at risk or not. A right portion of risk
is distributed to its stakeholders based on Earnings at Risk (EAR), Value at Risk (VAR) and
Economic Value of Equity (EVE). It can only be determined by assessing risk analysis
towards the financial performance of an organization. An analysis became easier once an
individual used Risk Strategy. Very reason why a Business Strategy is very important in
conducting an analysis.
On the other hand, communication is said to be the bridge for understanding. This is
the very reason why risk policies and management must be well communicated to its
Stakeholders, with accountability and transparency. But how should it be communicated?
(1) There must be an involvement of the team >> It is important that there must be an
involvement with the team. This will build strong relationship and communicates ideas and
thoughts with each other. Once the relationship is restored, risk policies are applicably
instilled in their hearts and minds.
(2) It is important to consider the location >> “A distant relationship make it harder to
, Communicate, for the absence of presence isn’t strong enough to withstand”. A
stakeholder’s location must be considered well. But in the modern world that we have today,
there are applications and systematic tool that is used in order to communicate to
stakeholders in different areas of the world. This can be done through skype, Gmail, zoom
meetings and amongst. This item is correlated to the next factor which is:
(3) Utilizing the use of Technology >> The innovation of technology is prosperous
enough that made it possible for distant regions to communicate. The use of technology
made it easier to communicate with the valuable people that we wanted to talk with. With
technology, the dissemination of risk policies is easily distributed to stakeholders. Risk
analysis technology molds an individual a team member with the capability to
communicating to stakeholders through quantitative analysis. There are also different
technology tools and innovations that helps disseminates the risk policy to its stakeholders,
wherever they are located in the phase of the universe.
(4) Using reports as an alert to common risks >> Project Managers made it sure that
communications are efficient and effective enough for the both sides. That stakeholders and
the organization are well engaged with each other. And that stakeholders are well equipped
and knowledgeable enough of the organization risk projects and risk policies. This can be
done by having a regular project report. With this, project managers (who are obliged in
disseminating the risk policies to stakeholders) can keep track of the common issues that an
organization undergoes. Reports towards the potential issues with interactive links is also
vividly track. With these reports, it can be a subject for submission and an instrument for
making sound and meaningful strategy.
2. What is the relationship between effective strategic risk management and
improved financial reporting and transparency?
Strategic Risk Management plays a vital role in managing risks that greatly affects a
company’s ability to achieve its strategic goals and objectives. It’s not an easy task to obtain
an effective and efficient strategic risk management, for it takes several steps to go along
with. A company must be able to well established the context, as well as, analyze and
identify that will help them to thoroughly assess and monitor the subject for a treatment. It is
significantly important to consider a strategic risk management effective because it serves
as a security in a company. Wherein it offers the initiative to reduce the possibility of risk
and its potential impact that might come in a certain company. By implementing risk in a
company, an organization can manage its management which reduces unexpected and
