Borrow furniture company risk management

Risk can be defined as a combination of hazards, uncertainty of loss, unpredictability, the possibility of loss or a probability of an unexpected outcome in an organization (Hoyt, & Liebenberg, 2011). Risk, therefore, revolve around uncertainties and expectations of occurrence of a phenomenon which might cause harm to the organization. It is essential to consider risk evaluation in an organization due to the positive impacts it will bring on it. Organizations that do not consider risk management could get harmed by several factors which they ought to have addressed long ago (Gupta, 2011). There are also some risks that are concurrent and expand when not mitigated or addressed which can lead to a decline of an organization when left unattended for a long time.

The threats can be analyzed and be used to identify the potential risks that the organization might incur. Another aspect is the resources in the organization. Many resources exist in the organization including financial resources, human resources equipment, materials, customers and buildings which the organization significantly depends on. These resources can be tabled appropriately and analyzed one by one putting down the type of risks which might affect them or changes which might occur on them that will entirely affect the organization (Pettigrew, 2015). Another significant consideration in the risk charting is consequences which refer to the undesired impacts which could occur upon acting on the resources. Organizational charts can be significantly used to show the management structure, and operational structure of the organization include significant areas such as marketing, accounting, production, distribution among other factors.

The BFC can, therefore, rely on its organizational chart to reveal some of the key areas where risks might arise and concentrate on. Flow charts The BFC can utilize the organization flow chart which implies the presentation of product movement and activities from the suppliers to the customers. The flow charts through the detailed explanation of product movement and activities can be used to identify the areas which are highly exposed to risks and areas which are affected. It is also easy to evaluate the impacts of the threats upon identification and the factors of the organization which will affect. For example customers, the satisfaction which will be expressed by the views of the customers will establish some of the dangers the organization might be having that might lead the customers away from the organization.

It might, therefore, lose a lot of customers within a short period when the issues are not identified and mitigated or responded to appropriately in time. Internal analysis of the organization There are many factors and considerations that could lead to risk within the organization; internal analysis provides the opportunity to study the operations of the organization and identify their strengths and weaknesses. The internal analysis also includes internal records of the organization such as financial statements, locations, products, and production processes. With a proper analysis of these elements, the BFC will identify specific risks and in what areas within the organizations affected or are likely to be affected by the risk. This will make sure and will result in full support of the philosophy of risk management that will motivate the organization to manage and eliminate the risks accordingly from the company.

Having support from the top executives in the company regarding the approach of managing risk will include various advantages and support such as financial support moral support and also motivation towards achieving organizational success. The involvement of the stakeholders will also create a state of confidence in the organization which will be considered purposeful in risk management. All these will, therefore, define and lead to successful risk management in the organization. The risk manager, Collins, therefore, should present the risk management philosophy to the executive managers and staff to approve it to implement the risk management strategies effectively in the organization. The organizational view of risk, therefore, promotes a sense of unity in concern of the risks in the organization which attracts everyone's attention to deal with the specific risks and work towards the goals of achieving a risk-free organization.

The engagement of all the stakeholders also assists in proper decision making and resolution methods which will come from different perspectives in the organization. Looking at risk management in the organizational perspective also promotes the formation of strategies and goals that aim towards achieving the organizational success and protecting the entire organization from the risk but not individuals (Pettigrew, 2015). The risk management philosophy also helps significantly in creating and focusing attention on the risk management department. It also creates attention to the significance of the risk in the organization. The management, therefore, achieves its opinion and need to use human resources in the organization to identify the risks within the organization. Consequently, the risk management philosophy will play significant role information and measurement of the effectiveness of the risk management strategies which are used or are intended to be implemented in the organization.

They will, therefore, be presented to all the stakeholders of the company who holds different interest to the risk management plans. This approach will also prepare the company for different results, for example, the negative impacts of the risks. Lastly, his philosophy also encourages employees to identify the risks and evaluate them. Positive effects Risk retention can have positive economic benefits on BFC such as the insurance premium which made up of loadings for expenses, expected claim cost, and profits. BFC decision of choosing retention of risk will make a lot of savings that is equal to the amount of the insurance premium loadings. The organization will, therefore, save the cost of insurance on the products or the risk which it can utilize or plow back to increase its production.

Retention of risks will also economically benefit the BFC through savings on the risk control measure which it can at times operate without. The insurance companies will implement or suggest high-risk control measures such as fire extinguishers which might not be necessary and costly. This ensures that the funds meant for insurance are not misused in the organization and are controlled appropriately. For example, the BFC can decide to utilize the funds for insurance on increasing the stocks and retaining the risks which might affect it in the future (Pettigrew, 2015). The risk management approach to risk retention is also significant for effective loss control in the organization. It, therefore, means that the losses can be in different parts of the organization.

The BFC will benefit from the awareness of the cost of risk that it creates in all the sectors of the organization which will reduce the losses. The risks can also impact negatively on the organization when not controlled. For example, fire risk can consume all the properties in the company including all of its assets and products leaving the company with a lot of losses (Pettigrew, 2015). Risk retention also overestimates the risk that results in steep opportunity cost. The company can miss opportunities for money reserved for certain overrated risks. For example risks of earthquakes which are very rare to happen. He should select the company which has the highest insurance coverage upon risk occurrence. Moreover, Mr. Collins should consider selecting the insurance companies that are cheap and have excellent rates of insurance, preferably low to save money for insurance and the cost (Pettigrew, 2015).

To effectively use insurance, Mr. Collins should be able to determine the intensity of the losses or the number of losses upon risk occurrence. He should, therefore, go for insurance if the terms and conditions are conducive and give assurance of covering all the risks of the company effectively (Rejda, 2011) Additionally, the BFC should consider premium insurance which will spread all the risks of the organization. The premium package is very convenient and caters for a wide range of risks that might occur in the company. Since it is a business organization, it is essential to consider securing all the assets which are also costly in the market. This will reduce the losses of the organization in case any risk occurs.