The major risks faced by my company

The major risks faced by my company

Running a company involves hard work, which can reap the rewards of customers, particularly satisfaction and maximizing revenue for future growth and expansion. But in the process of running a company, there are different types of risk. Some of these potential hazards can destroy the operations of the company, while others can cause severe damage that can be costly and time-consuming to repair. Despite the risks implicit in doing business, CEOs and risk management officers can anticipate and prepare for potential risks regardless of the size of the company. The significant risks I experienced in the company that I was working are; economic slowdown, volatile financial markets, inability to achieve organic growth, regulatory changes, and the failure to attract and retain top talent.

Volatile financial markets

During that time, the company faced increased volatility in financial markets, which has a significant impact on credit availability, interest rates, and currencies. For instance, the financial challenges in the Eurozone once trickled into Latin America and North America, where currency appreciation and capital outflow have given rise to significant fiscal concerns. However, the risk of volatility of financial markets should be taken into consideration and should account the external factors such as interest rates and foreign exchange rates.

Economic slowdown

The recent economic crisis that occurred in 2007-2009 was just two years after I was employed in that company, and as a worker and a growing company, we felt that shake. For now, our economies are still lowly recovering from the crisis of 2007-2009, the overall fragility of the global financial system impacted the general operations of our company. Uncertainties relating to fiscal policies in the US, on-going financial weakness in the Eurozone, recent monetary policy changes in Japan, decreased economic growth in China and India, and alarming unemployment figures all over the world are some of the factors that had the potential to cause additional loss of revenue in most of the companies.

Even though this risk is challenging to manage, but companies should try to examine their daily financial operations, especially cash flow. If the company is too dependent on a single customer and they are unable to pay for their activities and employees, this could have serious implications for the company’s viability.

Regulatory changes

Although policies and regulations on business operations are implemented and placed into action across the federal state, they can cause a great impact. I remember in the year 2011, the government changed the regulations for the production and delivery of goods and services in the industry where our company belongs. Although the new rules are expected to impact the overall economic climate positively, the fact that governments continue to change legislative acts affects the strategic direction of many organizations. The time devoted to ensuring compliance with the sheer volume of evolving regulations often means businesses neglect other essential matters, such as crisis readiness and risk management. So, to comply with the policies consumed a lot of time, and at the same time, it was costly, which lowered a company’s liquidity and hindered investment potential. The appropriate measure that should be used to avoid this risk is accepting the change because, after a while, the company will get into its regular operation.

Failure to attract and retain top talent

After the 2007-2009 financial crisis, there was a slow economic recovery that forced many organizations and companies to operate with fewer resources. We experienced the same impact because our company was still growing, and it did not have adequate resources to run it. So, we were not able to attract and retain top talent and clients simply because we were unable to compete with other big companies and businesses in terms of wages and benefits offered. Irrespective of any case, companies should work smart on advertising their products at the international level, they should have the policy of giving out offers and promotions to attract many customers.

Inability to achieve organic growth

Our company did not have adequate resources to run effectively and efficiently. However, we did not create the opportunity to expand it because, at the same time, there was still some economic tension and pressure. For my understanding, organic growth can only be achieved by those companies that manage to expand their customer base. This can be done by improving business activity and supporting innovation initiatives in the company. Improvement and innovation can help the company achieve organic growth regardless of the market conditions in which they operate by merely enabling it to produce more differentiated products, adapt to market dynamics, anticipate customer needs, increase output per customer and generate new sales.