Tuesday, August 13, 2019

PhD Finance - Risk Management Tools Assignment Example | Topics and Well Written Essays - 250 words

PhD Finance - Risk Management Tools - Assignment Example e high investment in terms of knowledge, time and other resources, it is important that all organizations develop and implement these techniques to mitigate or eliminate the apparent risks that might be facing the organization. According to Youngberg, Risks in the organizations can appear in many ways, and when the management has not put appropriate measures to reduce to reduce the impact of the risk, it can have serious and significant consequences on the performance of the firm (2011, p. 24). In many occasions, organizational risks appear with no or very little warning and thus organizations should always equip themselves with the appropriate risk management tools. A good example of this is the recent worldwide financial crisis which had negative impacts on the performance of many organizations that had not put appropriate risk management measures in place. Even though it is impossible for an organization to completely eliminate risks, it is not impossible to manage and reduce the impact of risks (Munier, 2012, p. 75). Therefore it is the responsibility of the managers to develop processes and policies which can assist in identifying the various risks facing the organizations as well as analyzing the risks. Frame points out that there are various techniques which can help in the management of risks in the organizations (2003, p. 59). The risk management techniques may include, formation of specialized committees to deal with risk other than those from accounting or finance, employment of risk officers, creation of a risk management enterprise, and giving particular attention to the microeconomic risks which do not usually receive much attention (Calabro et al., 2011, p. 49). Some of the microeconomic risks could include environmental risks such as climate change, political risks such as elections and the general risks affecting the ind ustry. Even though investing in tools and techniques of risk management can seem as an expense to the organization, lack of

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