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Managing Strategic and Operational Risk (Essay Sample)

Critically assess the following statement: The case for an enterprise-wide approach to risk management. _________________________________________________________________ Note: The Citation Guide, which can be found on the University Library web pages, should be followed with regard to the correct way in which to reference different types of source material. The examiners will be looking for evidence that: *the essay content clearly relates to the essay title; that the argument is well-structured, logical and consistent throughout; *the essay draws on a range of literature and is appropriately referenced throughout; *referencing, and footnotes (if used) are presented in line with the Citation Guide; *presentation and layout are neat, free from typographical and grammatical error, and the essay is ‘readable'. *English standard (2:1 standard) source..
Managing Strategic and Operational Risk
[Course Title]
[Instructor Name]
Risk is the probability of happening of something that might affect the performance, profitability and stability of an organization. In an organization, a scenario where risks are inevitable is difficult to find. An organization without risks can only be a theoretical myth but in reality, risks are present in each corner of an organization. In order to save an organization from the threats posed by the risks, an organization must implement upon certain safeguards. Such safeguards might include; periodic risk assessment, establishment of Standard Operating Procedures (SOPs) and internal audits (Alexander, 2005).

In accordance with the effect they might have, risks in organizations are normally classified as low, medium and high. It is a function of the organization to classify a risk in one of these categories. Some risks are of a trivial nature but some risks are so significant they threaten the survival of an organization. Since risks are also a part of an organization, they can never be ignored (Crockford, 1986). If an organization ignores the risks it faces in its day to day operations, the organization might not survive in the industry for a significantly long period of time. Ignorance of risks does nothing but escalates the situation and makes it even worse. Periodic review of risks is highly important for the unhindered performance of the operations of an organization therefore assessment of risks has been adopted as a full fledged function of each organization. The main function of the risk management department is to ensure that all other functions of the organization are performing just as they are supposed to perform. This function is given significant importance in new organization because the business world has realized the threats posed by risks, irrespective of the nature of the risks (Heldman, 2005).  
As mentioned earlier, risks are of various intensities. Some risks are classified as low intensity risks which can be temporarily ignored and can be dealt with later. On the other hand, some risks are so significant, they need to be dealt with on timely basis otherwise they might harm the existence of the organization. Significant risks can be found in almost all the operations of an organization. An organization faces risks when it makes any new investment, when it recruits new employees, when it delegates authority and at so many more instances (Coyle, 2004). 
At the time of a new investment, the possible risks that an organization might face are; the anticipated returns might not be achieved and the organization might have to face loss. The project in which the organization makes investment might not be successful due to any unforeseen change in economic situation of the region, any unforeseen development in the technology, or any social or environmental changes (Newman, ...
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