MARK JAMES L.

UMALI ACC 312 b – BSA 3

I. SUMMARY
Implementing risk management plan and considering the various potential
risk or events before they occur, an organization can save money and protect
their future. This is because a robust risk management plan will help a company
or business establish procedures to avoid potential threats, minimize their impact
should they occur and cope with the results. This ability to understand and
control risk enables organizations to be more confident in their business
decisions.

II. BODY
First, what is risk management? Well, risk management is the process of
identifying possible risks, problems or disasters before they happen. It increases
the likelihood of successfully achieving your business objectives. Every business
faces risk that could threaten its success. As a student, we are also aware of
strategic risks – a new competitor entering the market. Risk is all too often
something we aim to avoid or react to. Higher risk is associated with greater
probability of higher return and lower risk with a greater probability of smaller
return. In other words, the higher the risk the higher the return and it means you
will expect more profit to come. For example, the money you save or deposited in
the bank will only earn for, let’s say 3% in a year and it is not really risky you will
not lose your money but literally there’s no return, and this is also in doing
business if you’ll not invest you should not expect to have a profit. When putting
business one factor in risking is that you will risk your money. You should invest
a huge or lot of money, well there is only two result in investing first, if your
business is not really in to the market you will go bankrupt, but if your business is
booming it only means profit. The result will depend on your risk and decision to
made but when you risk something you should know the possibility or effect in
the future. The correct or proper way of strategic ways will help your business to
be more profitable and stable.
There are many strategic ways in how risk management can help in
profitability one if it is improving efficiency, by being unprepared for risk, your
best people can be drawn into those reactive, firefighting issues, diverting them
away from your core business objectives. For example, if a product is delivered
late to a customer your account managers will be diverted to dealing with the
crisis in order to protect your reputation, rather than on building their reach within
the customer to gain additional new business contracts.

III. APPLICATION
As a student the essence of this topic is that this will only not apply into
business or company but it will also apply into my life. Everyday we make a decision

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MARK JAMES L. UMALI ACC 312 b – BSA 3

in what we are doing and every decision we make there is always a risk. Having
knowledge about risk management I am now aware of what will happen if I risk
something and how will I cope up if there will be a problem will occur. I can say now
that risk is part of decision making but with proper handling or having strategic ways
we can always face or welcome the problem with a smile and arms wide open. As a
future accountant this will serve me a lesson and give me knowledge in the future.

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