Answered: Factors surrounding strategy and risk…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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Question

Factors surrounding strategy and risk management in public administration

Expert Solution

Step 1 Risk Management Defined

Risk management can be defined as a process of identifying, analyzing and controlling threats to an organization's capital and earnings these risk could possibly be from financial uncertainties, legal obligations, Technological challenges or natural disasters.

Risk management is the key element in the corporate governance of public administration and can be taken into consideration by following steps:

Identifying future events or occurrences that threaten success rating the level of risk in terms of likelihood and extent of impact
Considering whether to tolerate, treat, transfer or terminate a risk
Reviewing mechanisms for ensuring risk management decisions are up to date and robust, and stand up to stakeholder scrutiny.
Reporting process updates to management and others charged with governance.