Essay: Risks in management

Brandon Navas

What are the different types of risk management

1. Strategic – One may consider the opening of a competitor in your niche a typical risk.
Like the example above you can reduce it’s impact, as you would deal with any other
competitor, by offering better service, product and experience. I had a client, unlike the
previous example, that was negotiating a lease for a great space on a busy Vancouver street
for his coffee shop. All the equipment was purchased, interior designer and staff in place
but the leasing agent kept raising the asking price per foot. I took over the negotiations and
realized there was an ominous problem – there had to be another bidder for the space.
There was competition and it was none other than Starbucks. Needless to say they won over
the spot. My client settled for the first space he could find that turned out to be inferior to
the detriment of his start-up. He opened and closed within a year.

2. Compliance – You may not see this coming. This is often new regulations or legislation
that will change the way you must do business. Vancouver cab owners are bracing for
legislation that will allow Uber to move to Vancouver this fall. It could be a game-changer
for the industry. Cab owners responded by automating their antiquated call systems.

3. Financial – There’s nothing worse than having completed that huge order and hoping
that the client will pay you before the 30 day payment option you gave them. A start-up is
not often funded properly to handle multiple accounts that take their time paying or not
paying at all. A contingency fund will come in handy.

4. Operational – It sounds silly but my landscaper called the other day to tell me his mower
broke down and could he use a weed eater to do my lawn – what? I’m not particularly loyal
to this guy so found a company on Google that took care of me within an hour.
Usingbroken equipment like this will take a business down without some backup plan.
Imagine what could happen if your partner or key employee dies suddenly, an operational
calamity.

Why is risk management important?

Risk management is important in an organisation because without it, a firm cannot possibly
define its objectives for the future. . The whole goal of risk management is to make sure
that the company only takes the risks that will help it achieve its primary objectives while
keeping all other risks under control

 What are the principles of risk management?

The five basic risk management principles of risk identification, risk analysis, risk
control, risk financing and claims management can be applied to most any situation
or problem. One doesn't realize that these principles are actually applied in daily life
over and over until examples are brought to light
What are the methods of risk management?

The basic methods for risk management – avoidance, retention, sharing,

transferring, and loss prevention and reduction – can apply to all facets of an
individual's life and can pay off in the long run. Here's a look at these five
methods and how they can apply to managing health risks.