Karla Andrea V.

Oñas

IV-CMA

A strategic risk is the possibility of an event or scenario that could be both

internal and external that inhibits or prevents an organization from achieving their
strategic objectives. There are different possible strategic risks. There are two examples
under external risk; competition and market changes. Knowledge, staffing and
employee theft are example of risk under human resource risk. In financial risk; cash
flow, capital and price or cost pressures. Physical Resource Risks; disasters and
bottlenecks. And in relationship risks; reputation and vendor performance.

Strategic Risk Management (SRM) is a continuous process performed by

management that requires regular analysis and updates. It strategic suggests to the
possible strategic risk is to follow the method of managing strategic risk; avoid, transfer
accept at existing level then reduce to an acceptable level.

There are six guidelines for proper control. First is the control should involve only
the minimum amount of information necessary because too many information can
create confusion. Second is you have to monitor only activities and results that are
meaningful. Next is the control should be timely, means you have to correct it before it’s
too late. Fourth is there should mix of long and short-term orientations or controls. Fifth
is there should be control to pinpoint exceptions, it means that you have to take action
only if it goes beyond tolerance limits. Last is emphasizing rewards for meeting or
existing standards.

Vision and mission statements summarize a company’s business strategy in a

form that can be communicated and understood easily by stakeholders. The
development of vision and mission statements is an essential part of the strategic
management process. Having clearly defined the vision and mission of an organization,
managers then can set strategic objectives that are aligned with the long term goals of
the company.