Risk Assessment Is an Integral Aspect on Essay

Excerpt from Essay :

Risk Assessment is an integral aspect on any business irrespective of industry. Every business has some form of inherent risk embedded within its underlying business operations. This risk, through proper assessment can be minimized and practically prevented under certain conditions. Through proper risk assessments, businesses can abate the influences of danger that ultimately erodes both profitability, and reputation. In addition, risk assessments allow the company to reduce the prevalence of incidents that are within its span of control. In many instances, the risks of doing business are often beyond the corporation's control. Risks such as political risk, macro economic uncertainty, consumer sentiments, market turmoil, terrorism, and war are often beyond a corporation's span of control. As indicated in this document, proper steps can be taken to help alleviate many of the above mentioned risks associated with conducting business in the United States. Factors affecting international corporations such as exchange rate risk can be properly hedged through financial markets for instance. The most beneficial aspect of a properly conducted risk assessment, are the aspects that are within the corporations span of control. Aspects such as cultural risk, chemical handling risk, criminal activity, and transportation risk can be adequately diminished. Americans are working in a more dangerous environment than ever before. Threats of terrorist attacks, cyber attacks, toxic chemicals, faster vehicles, and globalization all increase risk to American workers (Kluger, 2006). As such proper risk assessment can help mitigate many of these risks as they relate to job activity. These documents will attempt to first outline many of the broad and specific risks associated with conducting business. Then, after outlining the proper risks, methods in which to help diminish their influence will be discussed. Through this risk assessment, the company will be better able to ascertain the viable risk components of the business and subsequently take corrective action to remedy the situation.

Macroeconomic Factors effecting the operations of the business

In the midst of our current economic slowdown and subsequent contraction, risk assessment is now becoming a very contentious issue. Record levels of individuals are now either unemployed or underemployed. Developed nations such as Europe are also experiencing economic and political uncertainty as the nations respective governments continue to curtail mounting debts. Even, China has a potential crisis in its economy as demand from this export driven country has dramatically abated. These macroeconomic events are the foundation for which many physical and personal protection risk issues arise from. As jobs and employment becomes scarce, crime, particularly theft will become more profound. Individuals will result to physical and personal damage as a means of retribution for the misfortunes of their lives. Others wanting to take away the prosperity of others may also attempt to vandalize or destroy innocent property in order to provide, "justice." Still others, with nothing to do, will simply attempt physical harm to others simply out of pure fun or need for enjoyment. Many examples of excessive physical and personal damage have resulted from extreme poverty and misfortune. Crime rates in New Orleans for instance after hurricane Katrina resulted in the theft and burglary of innocent businesses and homes. Miami, which has the highest debt per capita in the United States, has some of the most corrupt crime syndicates in the world. The company is no different in this regard. With declining incomes, high unemployment, and unfavorable sentiments towards the wealthy, the company is at risk for damages due to spite.

Proper risk assessment, therefore is a very important issue as the world becomes more global. Crises as apparent from the examples above can occur instantaneously and from anywhere in the world. Due to globalization, the resultant damage or crisis in one area of the world can have a profound impact on another. For example, one crisis that resulted in major physical and personal lose was the earthquake and subsequent tsunami off the coast of Japan. This crisis caused extensive production issues in Japan. The uncertainty as to the future of the country caused the yen to appreciate relative to the dollar causing the costs of exports to rise. This cost was transferred to American consumers as the cost of Japanese products rose. This subsequently provided an opportunity for American automakers to gain market share as they could better compete with Japanese automakers on price due to the tsunami. As such, during the year of the tsunami struck, General Motors overtook Toyota as the number 1 auto manufacturer in the world. The crisis in Japan, due to globalization helped the American auto industry while harming the Japanese economy. As such, it will be important to have a comprehensive and crisis management plan to help protect constituents in the event of physical or personal lose. In order to protect schools and churches in the community it is best to guard against economic uncertainty within the market place. This can be done by having an investment portfolio for the church and schools that emphasize diversification. The company must have various means of income in the event that the economy begins to decline. By having multiple forms of income, the church or school can continually operate effectively without a corresponding loss of productivity.

Chemical Risk Factors effecting the operations of the business

The overall business is predicated on the handling of chemicals both directly and indirectly. Employees, particularly those with heavy exposures can sustain very serious injuries due to the mishandling of certain chemicals. Spills, slips, trips, and falls can also result from chemical leakage with the facility. Very minor spillage could result in devastating consequences for the both personnel and the overall business. In addition, the mixing of chemical can result in very toxic fumes that can be potentially fatal to staff (Fuerst, 2011). Air pollutants are of primary important to prevent, as their side effects can remain dormant for many years. Staff, unbeknownst to them, may be developing harmful side effects to deadly air pollutants without their knowledge. Air pollutants are particularly troublesome because of their difficulty to detect. In many instances, air pollutants are both colorless and odorless. This allows harmful pollutants to remain undetected within the facility. Separation of chemicals and properly handling therefore become very important in regards to risk of chemical injury (Committee on Risk Assessment of Hazardous Air Pollutants, 1994). As such, the company should ensure proper lighting of all aisles and pathways. Staff is also required to wear very strong safety shoes with steel toes and grip to prevent falls. The company should also separate all chemicals to prevent toxic mixtures (Mumtaz, 2011). It is also prudent to clean up any chemical spillage, however minor, immediately as to prevent common injuries to staff.

Electrical Risk Factors

Employees, particularly those working directly within our facilities are at risk for electrical injuries. Electrical injuries pose significant risks for our staff as our business is predicated on electrical usage. Many of our machinery, printers, faxes, chemical maintenance, vehicles, and transportation equipment are rely extensively on electricity. As such, mitigating many of the risks associated with its use would help minimize overall risk. For example, building the residual current drive (RCD) directly into the switchboard will reduce overall exposure to staff. Proper training to staff to spot, identify, and subsequently correct damages, will also prove helpful. Finally, the company should not allow personal appliances to be used by employees. These appliances include personal toasters, personal microwaves, etc.

Transportation Risk Factors

Transporting material is of vital importance to the company. Timely transportation, arrival, and overall logistic processes will allow the company to grow market share. As such factors affecting the company could materially effect the underlying operations of the firm. These factors may include antiquated trucks and other vehicles used in transportation, inefficient logistic systems resulting in late delivery, improper training of personnel, accidents on the road, drug and alcohol abuse on the part of employees, and much more. These risks will have a profound impact on the underlying business if subsequent action is not taken to remedy their occurrences. Proper training of associates in regards to handling of chemicals, and timeliness will be very important. Frequent drug and alcohol tests should also be instituted. Frequent preventive maintenance and mechanical assessments of vehicles will also help alleviate transportation risk (O'Brien, 2002).

Criminal Activity and Unforeseen event Risks

Proper risk assessment is a very important issue as the world becomes more global. Crises as apparent from the examples above can occur instantaneously and from anywhere in the world. Due to globalization, the resultant damage or crisis in one area of the world can have a profound impact on another. For example, one crisis that resulted in major physical and personal lose was the earthquake and subsequent tsunami off the coast of Japan. This crisis caused extensive production issues in Japan. The uncertainty as to the future of the country caused the yen to appreciate relative to the dollar causing the costs of exports to rise. This cost was transferred to American consumers as the cost of Japanese products rose. This subsequently…

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