Effects of Risk Management on the Organisation Performance and Competitiveness

Effects of Risk Management on the Organisation Performance and Competitiveness

            Risk management refers to the process of identifying risks, the process of assessing, and a method of controlling organization threats that are likely to happen in the future or the ones that have already happened (Abdel-Basset et al., 2020, P 247). Risk management aims to ensure that there is a better performance of the organization; the organization is performing in an effective way and above all to make sure that all the people working in an organization are in a safe condition (Adiguzel and Zafer, 2020, P 116). Risk management ensures that there are no risks that can make an organization not fit in the competitive field as a result of its poor performance (Andersen et al., 2019).

Risk identification is defined as the procedure of determining dangers that have the possibility of preventing the programs, innovativeness, and investments from achieving the set objectives (Anwer et al., 2019). Risk identification is an independent variable because it does not need other variables when it is identifying the risks in the organization (Bao et al., 2019, P 1491). As a project manager who works in a website company, despite that the project might be small in size, there is a need for carrying out the analysis risk management. To make sure that the website is working as per the agreed due time and with the cost of agreement Risk management will make sure that the sites are functioning well. Work is delivered and designed as per the requirements of the customer

Risk assessment is defined as an identification of risks that may bring a negative impact in an organization and hence making the organization not to attain its objectives. It helps in identifying business risks that may be inherited as well as coming up with the possible measures and controls of reducing the chances that limit the business operation. Risk mitigation is defined as the act of taking a series of risks that may currently exist and attempt to minimize the negative impact on an organization. Generally, some risks are expected in an organization, and they cannot be entirely removed. However, they can be eliminated in a way that they cannot interfere with the operation of the organization. Risk monitoring is defined as the process of keeping track of the risks to know the risks that happened as well as being aware of the risks that are likely to happen. In most of the organization studies, the performance and competition are considered as a dependent variable hence seeking to identify the variance which produces the variation in performance (Pradabwong, Jiraporn, et al.,2017). The researchers that surveyed the two variables typically provide less attention towards the complication of using such methods in characterizing the phenomena of performance.

Those complications involve ways in which the performance of the organization is volatile; there is casual complexity that surrounds the organization’s performance (Queiroz, Magno, et al.,2020). There are the limitations of accessing the database in recalling of informants. Researchers are in a better place of understanding the problematic cities that appear when inferring casual order, which arise from the corrections that are generated by the histories of organization, specific to those correlations which implicate within the measurement procedure used. The project aims at showing the effects of risk management on the organization’s performance and competition in both independent variables and dependent variables

Literature Review

Independent variables

Risk identification

Mostly risk identification is made at the beginning of a project to identify the possible risks that are likely to occur as well as identifying the reasonable measures on how to deal with the threats (Chuang et al.,2018, P1000). Therefore, identification of risks at an early stage helps the organization to have a better performance because it will be aware of the risks that are likely to happen and the possible measures. As a result, the performance is always the best because even the employees are aware of what is expected and how they can deal with the situation in case it happens ( Braumann et al.,2020). Therefore it is advisable for organizations always to exercise this variable as it helps a lot in achieving the objectives and the goals of the organization (Costa et al., 2020, P 107110)

Risk assessment

There are several steps of assessing risks, and they are applied according to the nature of risks and the type of business (Dehgani et al., 2019). They include: Identifying risk, the risk is first identified, the possible loss that is likely to bring as well as identifying the reasonable measures towards the risks (Deberdieva and Frolova, 2020, P 2). Second, determining what or who could be harmed in case the risks happen, the organization needs the assessment to be don o to see who is likely to be damaged and therefore come up with the preventive measures in case such risks happen (Deselnicu et al., 2017, P8). Third, evaluating risks as well as developing control measures. This happens after the organization has identified who will be harmed and therefore looking for the possible actions to prevent loss of people’s lives or else creating more damages in case risks happens(Hangman et al.,2019, P 2172). Forth, recording the findings as a way of creating awareness to the management that there are possibilities of danger to happen. Finally, reviewing and updating risks assessment on a regular base to ensure there are changes done depending on the risks which have been occurred. With this variable, it is an assurance that the organization will be conducted, and its performance, therefore, will be expected to be better ( Ifrim, Ana Maria, et al. .2020, P 178)

Risk mitigation:

As long as the organization is operating, there are expectations of making losses. Under this circumstance, the organization will compare the losses its making and the profit and make the final decision on whether to continue operating or to close it (Just and Vanessa, 2020,p 50). Although it may not be in a position to reduce all lose because of the breakdowns and expiring of the products, which are known as the ordinary losses (Malik et al., 2020, P 100178). Therefore the best way it can do is to eliminate those losses by maybe checking the expiring days in advance as well as avoiding all means to prevent breakages(Manab and Aziz, 2019, P, 590).

Risk monitoring

Monitoring of risk is used in ascertaining whether proper policies are followed in identifying dangers as well as applying the same assumptions to come up with the possible measure of chances (Park, Kyungmo, et al.,2019, P 320). Control of risk is essential in an organization because it helps in highlighting and analyzing whether the strategies are valid or not. With the help of risk monitoring, the organization can perform well because it can monitor the new risks appearing in the organization as well as coming up with the possible measures towards these risks(Mazurek and  Marica, 2020, P 120).

Dependent variables:

According to the researchers, the performance of the organization and competition fall under the independent variables because they depend a lot on many variables for them to be very useful in an organization (Saeidi, Parvaneh, et al., 2019, P 68). For instance, for the organization to perform well, there must be rewards, promotions, and motivations as a way of encouraging employees. The employee needs to be rewarded when they did excellent work; promotions need to be done to those with a lot of experience in business, and most importantly, the motivation part is essential in any organization (Šoško et al.,2019, P 13). However, without this, employees will not show a lot of interest, and most of them will be working In such an organization just because they have no other places to work in (Wijethilake et al.,2019, P 150).

On the competition side, for business to fit in the competition field, it must have quality and quantity products but must be willing to consider customers fist, and it must be ready to meet the expectations of the employees as well (Yunis et al.,2018, P 350). Therefore they are dependants who rely much on other variables for them to perform effectively as well as enabling the organization to meet its expectations (Zhang et al.,2019,p 220).

Conclusion

Based on the above presentation, it is clear evidence that when a business is operating, it has dependent variables and others, which are independent. Meaning that some rely on others while other variables they can function very well on their own. The organization is always advised to ensure that they utilize well variables such as risk identification, risk assessment, risk monitoring, and all other variables that, in one way or another, helps a lot in preventing risks. From the information provided above, it shows that the organization can only achieve its goals and objectives if only there is cooperation in eliminating and avoiding all the possible risks in an organization. As a result, the performance of the organization will be expected to go higher, and the company will be in a position to meet its target. To the independent variables, such is performance, and the competition organization should be able to meet all the expectations of the clients, employees, and all people that play any role in the success of the business. Therefore we conclude that organizational performance and competition are variables that are essential in the market. The management of the organization should do all that it takes to ensure that they have met the expectations of the employees and clients to make the organization’s performance to be better as well as making them fit in the competition field. Generally, the work shows that there is a need for every variable to participate, either dependent or independent because they are all needed in the operation of the business.

Work Cited

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