Risk Management Proposal

HOW DOES RISK MANAGEMENT AFFECT A COMPANY$$S FINANCIAL PERFORMANCE

Issue: Examine the affiliation between different strategies and types of risk that impact the overall corporate finance performance.

Research Hypothesis: Risk management meaningfully impacts an organization$$s capital and earnings in challenging situations if appropriate risk management strategies are executed carefully.

Research Approach:

Quantitative approach: Key Risk Indicators $($KRI$)$ a system of measurement that assists an organization in observing and assessing the level of risk they are exposed to$.$ The Key Risk Indicators investigates all scenarios for any potential risk factors. Once the KPI identifies the risk potentials, the corporation builds strategies to avoid potential risks.

Qualitative approach: Key Performance Indicators $($KPI$)$ a measurement system that determines the results or outcomes of the organization$$s performance. The purpose of the KPI approach is to assist the organization in identifying, observing, and limiting potential risks to minimize negative value to the organization$$s capital and earnings.

Risk Management Strategies $$ Having identified the KRIs and KPIs, the organization can begin to develop and implement risk management strategies to avoid potential risks and minimize negative value to the organization's capital and profits. Considering the following strategies: Risk Avoidance, Risk Sharing, Risk reduction, Risk retaining.

Thesis$/$Predict Results: Risk management tools can significantly influence economic and social factors and inevitably benefit a company$$s financial performance due to mitigating risk factors.

Major Themes:

SWOT Analysis predicts pitfalls for a company. Companies that perform accurate SWOT analysis are more successful than those who fail to analyze their organization$$s strengths, weaknesses, opportunities, and threats.

Emerging technologies like machine learning enable more accurate data collection and positively impact managing risk factors.

Five basic techniques of risk management.

The changing role of risk managers to higher level thinking and implementation by automating simpler tasks improves risk management outcomes.

Risk management is a growing department within businesses that leads to better outcomes through anticipating the possibility of negative value to the businesses capital and earnings.

Drawbacks of risk management can restrain innovation by anticipating risks that may not be a threat to the business.

How paying too much attention on failure and threats to the business can become a counter in productivity by limiting the actions a business takes to avoid any risks even they are not a potential threat to the organization$$s value.

Critical Lens Proposal to Use:

The critical lens we will be using is Socioeconomic $($Marxist$).$ Our crucial focus will be on how wealth and social networks have an impact on Risk Management in Big$/$Small organizations. We will be looking at how access to certain tools can impact the overall financial performance of Big$/$Small organizations. Policies involving their actions toward managing and mitigating risk through various methods including the use of machine learning. We will then look at how those policies are reflected in financial statements and the benefits they create. As well as evaluate how Big$/$Small organizations are impacted by avoiding implementing risk management strategies and it affects the organization$$s value.