The issue of risk in non-financial companies - Free Essay Example

Sample details Pages: 7 Words: 2231 Downloads: 7 Date added: 2017/06/26 Category Business Essay Type Narrative essay Did you like this example? Risks have always been at the centre of business activities. Risks were routinely accepted by traders in historical times, as well as by commercial expeditions in post-medieval periods. They are similarly now being faced by a range of modern day businesses in the course of their operations for the fulfilment of their objectives. Don’t waste time! Our writers will create an original "The issue of risk in non-financial companies" essay for you Create order (Buljevich, Park, 1999, P 1)The systematic management of risk is not a new phenomenon either; insurance companies specialising in making money out of methodical risk identification, assessment and management have now been in existence for more than a century (Buljevich, Park, 1999, P 1). Apart from insurance companies, other financial organisations like banks and financial institutions also deal with risk as part of their mainstream activity and approach the issue in a planned and methodical manner (Buljevich, Park, 1999, P 1). The issue of risk in non-financial companies however takes on different dimensions (Carlton, 1999, P 83 to 107). Whilst the activities of non-financial companies do not specifically call for continuous application of risk management techniques, many of their major activities, (like selling goods in the market place, buying material or services from external vendors, procuring and applying new technology, opening new branches, or putting up new factories) , involve significant elements of risk (Carlton, 1999, P 83 to 107). It is also widely accepted by management and financial experts that modern day, non-financial business corporations need to often engage in activities with high elements of risk (Esty, 2004, P 213 to 224). The contemporary business environment is much different from what it was even two decades ago. Globalisation and economic liberalisation, along with the dismantling of physical and economic barriers, astonishing technological progress, the emergence of instantaneous communication technology and the spread and sophistication of the internet have led to the creation of enormous business opportunities for commercial firms (Esty, 2004, P 213 to 224). Business organisations who were in the past content to grow in set patterns along reasonably pre-determined routes are now faced with a bewildering range of business opportunities (Esty, 2004, P 213 to 224). Modern day businesses are also shedding the inhibitions, apprehensions and constraints of the past and engaging in substantial expansion and in new projects, both on a local and an international basis (Esty, 2004, P 213 to 224). Cross country investment and trade has expanded dramatically. Whilst a few companies like McDonalds, Coca-Cola and some other iconic organisations were in the past associated with extensive international activities, a number of UK based companies like Tesco, Mark and Spencer, Costas Coffee, and Next, are steadily increasing their global footprint. Although business opportunities have exploded in contemporary times, and modern day businesses are exploiting them aggressively, such opportunities do entail significant risks (Carlton, 1999, P 83 to 107). Non-financial organisations are also under pressure, not just from their share holders, but also from the larger, high pressure, and fast changing economic and competitive environment to engage in new projects with various degrees and dimensions of risk (Carlton, 19 99, P 83 to 107). Risk management is now one of the most important activities of non-financial organisations, albeit not in the way it is for banks and other financial companies (Carlton, 1999, P 83 to 107). This study deals with the various risks that are faced by non-financial companies engaged in new projects, the identification, measurement and management of such risks and the importance of effective risk management for organisational security and success (Carlton, 1999, P 83 to 107). 2. Identification of Risk Contemporary businesses engaged in setting up new projects are likely to face risks of diverse types and with different dimensions (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). It is thus important for such organisations to formulate and develop efficient systems of risk management (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Effective risk management systems start with construction of processes for systematic identification of risks (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Risks associated with new projects can broadly be classified under the broad categories of operational risks, financial risks, market risks and reputational risks (Carlton, 1999, P 83 to 107). With such categories however being too broad for actual measurement and management, most firms isolate and identify risks under the more specific and narrower categories described below (Carlton, 1999, P 83 to 107). Market Risk Market risks concern the market demand for products or services that are proposed to be generated by new projects (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). The market demand originally assessed and projected at the time of preparation of feasibility studies, can be adversely affected by unavoidable increases in costs, the development of more effective or economical substitutes, alterations in customer industries, and political or environmental developments (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). The economic recession that set in towards the middle of 2007 and continues even today affected the fortunes of many new projects (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). With market demand for products and services diminishing sharply in the wake of the economic recession, new projects in the UK, as in many other parts of the world, took a severe beating (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Operating Risks Such risks concern the different resources that are required for the successful operations of new projects (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). They can emerge from factors that are controlled by organisational managements like labour and cash availability, or be caused by external factors like fluctuations in exchange rates or faults in design, planning or construction (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Risks of this type can lead to the surfacing of problems that could make it difficult for new projects to meet their scheduled output of products or services (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Completion Risks Completion risks refer to the possibility of projects getting delayed because of various factors like unavailability of essential material, labour unrest, delayed delivery of supplies and equipment, delays in disbursal of bank loans, and even inclement weather (Carlton, 1999, P 83 to 107). Inflation Risks Inflation risks can arise from actual inflation rates exceeding the rates projected at the time of preparation of feasibility studies (Carlton, 1999, P 83 to 107). It is pertinent to note that the unprecedented increase in oil prices during 2007 adversely impacted the progress of numerous big and small new projects across the world (Carlton, 1999, P 83 to 107). Currency Risks Currency risks are essentially part of the operating and construction risks of new projects (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Such risks arise when the inflows and outflows of a project are denominated in different currencies (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Unexpected and sharp exchange rate fluctuations can severely affect the operations and profitability of such ventures. New projects that are overly dependent upon export or import of goods or services are likely to be more exposed to such risks (Wibowo, Kochendà ¶rfer, 2005, P 963 to 972). Political Risks Political risks are important for new projects that are proposed to be put up in other countries with different political environments (Carlton, 1999, P 83 to 107). Whilst most business organisations are reluctant to invest in new projects in politically volatile areas, competitive pressures and the need to get early entry in attractive markets often force business organisations to invest in new projects in politically sensitive countries (Carlton, 1999, P 83 to 107). Apart from arising out of political volatility, such risks could emerge from the possibility of legislative or regulatory changes in host countries leading to significant changes in market conditions (Carlton, 1999, P 83 to 107). To elaborate, businesses in the United States have been engaging in substantial outsourcing of activities for improving their competitive advantage. The ongoing recession is however forcing US policy makers to enact legislative changes for protecting American jobs, which in turn could have significantly adverse results on the many Asian companies who have invested in new projects for supplying offshore services to the Unites States. Regulatory Risks New projects in regulated areas like supply of water or power, or the construction of toll roads, often face uncertainties about the future pricing of their products or services. Whilst the initial paperwork for such projects includes clauses regarding the future pricing of generated services, it is not uncommon for such agreements to be adversely impacted by regulatory change. The huge Dabhol Power Project set up in Western India by Enron in the late 1990s came to a virtual standstill because of sharp downward revisions in the price of generated power after the election of a new and hostile state government (Esty, 2004, 213 to 224). Other Risks Even the risks given above are illustrative and not exhaustive. New projects can be adversely affected by other causes like changes in technology or the possibility that the natural resources needed for a project may not be available (Carlton, 1999, P 83 to 107). Force Majeure risks represent a basket of unanticipated and practically uncontrollable natural or manmade conditions like floods, earthquakes, war or civil riots that can severely affect the operations and feasibility of new projects (Carlton, 1999, P 83 to 107). 3. Measurement and Management of Risks Whilst many of the risks detailed above are self evident and intrinsic to new business projects taken up by non-financial companies, a large number of modern organisational managements still do not take comprehensive steps for the management of such risks. A survey by Ernst and Young, a leading firm of management consultants, reveals that more than half of the CFOs and CEOs of major business firms appreciate that their organisations do not have comprehensive and systematic processes for managing their important risks (Izaguirre, 2009, P 1). In fact the majority of such companies tackle different risks individually, and whilst some standard precautionary methods are adopted, most risk control actions tend to be reactive rather than proactive and take place only after or during the development of risk environments (Priddy, 1999, P 1). Risk management experts state that non-financial companies need to adopt far more comprehensive and holistic strategies towards risk management, not just for new projects but as an integral component of modern day business activity (Carlton, 1999, P 83 to 107). Managements of new companies, at the time of initiation of new projects, need to not only exhaustively identify the various risks that are associated with new projects, but also investigate whether their organisations are taking the right risks, whether they are undertaking acceptable amounts of risk, and whether they are capable of taking action to manage such risks (Carlton, 1999, P 83 to 107). Apart from the need for identification of risks, risk management experts also point to the necessity of adequately measuring such risks, deciding whether the benefits from new projects are sufficient for organisations to accept such risks, and finally of taking specific and centrally controlled measures to manage such risks (Carlton, 1999, P 83 to 107). Investigation and measurement of risks primarily involves (a) getting to know the important risks that are being undertak en by organisations, (b) the relationships of such risks with the objectives and strategies of the firm, (c) the relationship of such risks with the creation of organisational value and (d) the connection of risks with enhancement of organisational competitive advantage (De Wit, 2005, P 2 to 25). Such an exercise if conducted methodically can help significantly in localising risks that need to either be compulsorily be taken for organisational benefit or otherwise be partially or totally avoided (De Wit, 2005, P 2 to 25). Business organisations usually measure risks by different methods (Priddy, 1999, P 1). Identifying and localising risks help businesses in deciding upon various project features and in altering and managing risk profiles to ensure that only risks necessary for organisation benefit are accepted (Priddy, 1999, P 1). Risks are measured through four main methods, namely the proxy method, the earning volatility method, the assessment method for loss modelling, and th e method for direct risk estimation (Priddy, 1999, P 1). Whilst the loss modelling method involves some amount of statistical work, the others are basically dependent upon the application of sound business sense to different risk bearing situations (Priddy, 1999, P 1). Such risk measurement enables organisational managements to predict the potential profitability of particular new ventures, locate areas of risk and take action either to avoid such risks or mitigate their potential impact (Priddy, 1999, P 1). Managements manage risks through the application of a range of strategic choices, organisational policies and operational actions after their identification (Carlton, 1999, P 83 to 107). Whilst the appropriate identification of risks can help managements in aborting excessively risky projects, they are also helpful in increasing managerial focus on specific areas and take appropriate risk mitigation actions (Carlton, 1999, P 83 to 107). Such risk management methods are tai lored to meet specific sets of risks (Carlton, 1999, P 83 to 107). The management of operational and construction risks is generally met through very careful selection of suppliers and contractors, arrangement of adequate funds, obtaining of bank guarantees, and inclusion of penalties for contractual failures (Carlton, 1999, P 83 to 107). Currency and exchange risks are managed through forward hedging contracts (Carlton, 1999, P 83 to 107). Political risks are controlled through constant communication with policy makers and the use of political lobbies, if so required (Carlton, 1999, P 83 to 107). Environmental risks are controlled by ensuring compliance with regulatory requirements. Appropriate insurance also helps greatly mitigating business risks (Carlton, 1999, P 83 to 107). 4. Conclusion Non-financial companies face a wide range of risks in their regular business activity and more so during execution of new projects. Whilst financial companies look at risk management in a methodical manner and base most of their operational actions after the assessment of a range of risk criteria, non-financial companies tend to be ad-hoc, conventional, and reactive in their approach towards risk management. Modern day business environments, whilst brimming with opportunities, are however complex and risky, especially so for growth oriented firms. It is thus necessary for managements of such firms to put strong risk management measures in place to safeguard their investments and improve their competitive advantage.

The 5 Smallest States in the U.S.

The United States is made up of 50 individual states that vary greatly in size. When talking about land area, Rhode Island ranks as the smallest. Yet, when we discuss population, Wyoming—the 10th largest state by area—comes in with the smallest population. The 5 Smallest States by Land Area If youre familiar with U.S. geography, you might be able to guess which are the smallest states in the country. Notice that four of the five smallest states are along the eastern coast where the states seem to be crammed into a very small area.   1) Rhode Island—1,034 square miles (2,678 square kilometers) Rhode Island is only 48 miles in length and 37 miles wide  (77  x 59 kilometers).Rhode Island has over 384 miles (618 kilometers) of coastline.The highest point is Jerimoth Hill in Foster at 812 feet (247.5 meters). 2) Delaware—1,949  square miles (5,047  square kilometers) Delaware is 96 miles (154 kilometers) in length. At its thinnest point, it is only 9 miles (14 kilometers) wide.Delaware has 117 miles of coastline.The highest point is Ebright Azimuth at 447.85 feet (136.5 meters). 3) Connecticut—4,842 square miles (12,542 square kilometers) Connecticut is only 110 miles long and 70 miles wide  (177  x 112 kilometers).Connecticut has 618 miles (994.5  kilometers)  of shoreline.The highest point is the southern slope of  Mt. Frissell at 2,380 feet (725 meters). 4) Hawaii—6,423  square miles (16,635 square kilometers) Hawaii is a chain of 132 islands, eight of which are considered principal islands. These include Hawaii (4028 square  miles), Maui (727 square  miles), Oahu (597 square  miles), Kauai (562 square miles), Molokai (260 square  miles), Lanai (140 square miles), Niihau (69 square  miles), and Kahoolawe (45 square  miles).Hawaii has 750 miles of coastline.The highest point is Mauna Kea at  13,796 feet (4,205 meters). 5) New Jersey—7,354 square miles (19,047 square kilometers) New Jersey  is only 170  miles long and 70 miles wide (273 x 112 kilometers).New Jersey has 1,792 miles (2884  kilometers)  of shoreline.The highest point is High Point at 1,803 feet (549.5 meters). The 5 Smallest States by Population When we turn to look at the population, we get an entirely different perspective of  the country. With the exception of Vermont, the states with the lowest population are among the largest by land area and theyre all in the western half of the country. A low population with a large amount of land means a very low population density (or people per square mile). 1) Wyoming—579,315 people Ranks as the 10th largest in land area -  97,093 square miles (251,470 square kilometers)Population density: 5.8 people per square mile 2) Vermont—623,657  people Ranks as the  45th  largest in land area -  9,217  square miles (23,872 square kilometers)Population density: 67.9 people per square mile 3) North Dakota—755,393   Ranks as the  19th  largest in land area—69,000  square miles (178,709 square kilometers)Population density: 9.7 people per square mile 4) Alaska—739,795   Ranks as the largest state in  land area—570,641  square miles (1,477,953 square kilometers)Population density: 1.2  people per square mile 5) South Dakota—869,666 Ranks as the  17th  largest in  land area—75,811 square miles (196,349 square kilometersPopulation density: 10.7  people per square mile (Population counts according to the July 2017 census estimates.) Source US Census Bureau. â€Å"Census.gov.†Ã‚  Census Bureau QuickFacts,

Split Brain - 1201 Words

Running Head: SPLIT BRAIN LATERALIZATION Difference of Lateralization Between Split Brain And Intact Brain Patients Psychology 102 Section 6X Student Abstract Split brain patients lateralize functions in their brains to either side of the brains while intact brain patients utilize both sides of their brains. A group of 20 subjects were tested, 10 split brain and 10 intact brain patients. We gave these subjects three exams, a vocabulary test, a logical reasoning task and a face recognition task. We found that split brain patients have a lower correlation between these exams compared to those of an intact brain. If we were to replicate this exam we will receive roughly the same numbers, but if done so more patients to†¦show more content†¦3C. The correlational method will help me analyze the data and decipher the correlation to identify a possible relationship between the split brain condition and laterality. Data were collected from a group of split-brain patients and a group from the general population to test the hypothesis using the correlational method. Each group completed three tasks shown previously to be lateralized: (1) a vocabulary test, (2) a logical reasoningShow MoreRelatedThe Split Brain Procedure2384 Words   |  10 PagesOur brain is divided into two halves or hemispheres. The left hemisphere specializes in language, words, understanding and reasoning while the right hemisphere is associated with spatial awareness and creativity. Split brain is a term used to describe the result when the corpus callosum connecting the two hemispheres is severed either partially or completely. Before the proceeding with the surgical procedure, the patient’s head is either partially or completely shaven in order to gain easier accessRead MoreHistory Of Split Brain Research982 Words   |  4 PagesSplit-Brain Research History of split-brain research Walter Dandy, an American neurosurgeon unintentionally paved the way into research on split-brain patients in the 1930s. Split-Brain refers to patients who have had their corpus callosum severed to some extent or in whole. This procedure was mainly used as an extremely invasive surgical procedure within patients suffering from intractable epileptic seizures. The corpus callosum consists of over 200 million nerve fibres connecting the left andRead MoreSplit Brain: What Happens when You Have Two Brains?570 Words   |  2 Pageswould have a split brain, I don’t believe I would act any differently than I act now. The only way to actually notice the differences is when you put yourself through tests. However, if it was a special case, I might not be completely functioning. I would have trouble telling my body what actions to perform. Split brain occurs when there is a lack of a corpus callosum or when the corpus callosum is severed. Making it so there is no connection between the two hemispheres of a person’s brain. A personRead MoreLiterature on Split-Brain and Lateralization of Function2476 Words   |  10 Pagesï » ¿Question 1 Discuss the literature on split-brain and lateralization of function. What does the research tell us about each hemispheres ability to function independently (e.g., cognitively, creatively, etc.) and in unison? What are the implications for the cognitive neuroscientist in terms of research? Even though a variability of neurochemical and neuroanatomical sections are involved in the preparation of memory, functional specialization significantly regulates what kind of material can be learnedRead MoreMy Psychology Course And Remembered About The Cerebral Hemispheres1772 Words   |  8 Pageshemispheres and sensory information after a split brain operation. The split brain procedure is a surgical operation that’s used for people that have severe epilepsy that can’t be controlled by the drugs they take. In the brains of people with severe epilepsy, the nerve cells on one side of the brain are overactive and the overactivity is relayed to the other side by the corpus callosum, a bundle of nerve cells that connect certain parts of one side of the brain to the other. The corpus callosum enablesRead MoreAre there multiple selves? Essay1225 Words   |  5 Pagesmultiple selves; it’s not humanly possible to portray those numerous individuals physically so ins tead we do it efficiently through our one body given to us at birth. Gazzaniga’s experiment of the split-brain condors the idea of having multiple selves within our one mind. Gazzaniga says that the brain is: â€Å"a collection of devices that assists the mind’s information-processing demands† (36). Which he is referring to collecting more than one idea and having to compute that through a single action thatRead More The Human Brain Essay1341 Words   |  6 Pages Our brains weigh about three pounds and are divided into two similar looking but functionally different hemisphere, the right hemisphere and the left hemisphere. Both of which are connected by a large bundle of nerves called the corpus collosum. In some people with severe seizure disorders such as epilepsy, it was found that if this bundle of nerves was severed their seizure would either cease or a the very least be better controlled. From this surgical procedure it was discovered that the two hemispheresRead MoreOne Brain or Two? (Psychology) Essay630 Words   |  3 PagesAlmonte One Brain or Two? Numerous researches and experiments have been done based on whether the human being possess one brain divided into two parts (left and right hemisphere) or whether we have two different brains working together. The psychologist Roger W. Sperry was the first on research this topic with some experiments on animals. Then, he later started working with Michael Gazzaniga. They were able to find split-brain patients. Those patients had their brain split as way of reducingRead MorePractical Report Essay1094 Words   |  5 Pagesaccurateness of either side of the brain. This study was used to investigate functional asymmetry between the left and right hemispheres in phonological processing. The research was taken out equally on 15 male and 15 females London Metropolitan University students ranging from ages 18 – 35 years old. They were all specifically chosen to be right–handed and had English as their first language thus providing a fair experiment to see whether our le ft hemisphere (left side of the brain) or the right hemisphereRead MoreWhich side of the brain do you use?600 Words   |  3 Pagesof the brain do you use? Ever wonder which side of the brain individuals use to learn with? Left and right brain dominates impacts learning way more than people think. There are many theories about each side of the brain dominance. There are many different ways to determine if you are left brained, right brained or even if this whole matter of the learning style of the brain is just a myth. There are many different ways to determine which side of the brain people may use. The right brain dominance

Perseverance Despite Persecutions Essay Example For Students

Perseverance Despite Persecutions Essay The founding fathers constructed the Constitution with the notion that â€Å"all men were created equal.† However, many minorities still struggle for the same rights and opportunities as others. â€Å"Mother to Son† and â€Å"The Negro Speaks of Rivers† are poems written by Langston Hughes that use symbolism to exemplify the struggles of African Americans as they attempt to persevere through adversity. Hughes utilizes the stairs in â€Å"Mother to Son† and the rivers in â€Å"The Negro Speaks of Rivers† as his main mode of symbolism. Symbolism in the two works develop the overall themes of the poems, perseverance. In â€Å"Mother to Son,† Hughes uses a worn staircase as an extended metaphor to parallel its flaws to the struggles of African Americans. She urges her son not to give in to the pressures of society, because she has not. By stating â€Å"Life for me ain’t been no crystal stair, (Mother to Son â€Å"MS† line 2) Mother is able to portray that her life is far from perfect. In fact, she describes her life as having â€Å"tacks and splinters†¦with boards torn up† (MS lines 3-5). These defects symbolize the problems in her life that were caused by her race, her gender, or both. In addition, Hans J. Massaquoi’s article â€Å"The Black Family Nobody Knows,† exemplifies that the African American race is a strong and versatile race. He argues that many people tend to depict Blacks through negative stereotypes, such as â€Å"drug abuse,† â€Å"teenage pregnancy,† and â€Å"gang affiliation† (Massaquoi 28). Massaquoi’s article, much like â€Å"Mother to. . Hughes uses â€Å"geographical landscapes† (Hogan 20), such as the river, as a common passage and a common place for African Americans. Hogan, much like me sees the rivers in â€Å"The Negro Speaks of Rivers† as â€Å"a symbol of both rooted connectedness and fluid mobility† and of â€Å"cultural flow across both space and time. † Through the exemplary use of symbolism, Langston Hughes produced two poems that spoke to a singular idea: Black people have prevailed through trials and tribulations to carry on their legacy as a persevering people. From rivers to stairs, Hughes use of extended metaphor emphasizes the feeling of motion which epitomizes the determination of the people. Overall, the driving feeling of the poems coupled with their strong imagery produce two different works that solidify and validate one main idea.