Sample Paper on Business Risk Management Strategies

A disaster hits a business enterprise at any time. It may be hard to predict its occurrence but its occurrence is almost a guarantee. For this reason, it is important for one to keep business tactics and strategies abreast with emerging trends.

Business Continuity Plan (BCP)

Parsons, & Brouggy, (2016) defined BCP as written steps that organizations follow to react and get back to its normal operations after experiencing a disaster. The purpose of BCP is to ensure that when one’s business is under interference, it does not yield but rather sustains its existence.

BCP plays a key role in the evaluation of an enterprise’s gaps and possible responses to addressing them. It helps to access one’s capacity to tackle a disruptive event to a business. Moreover, the performance of previous BCPs is subject to upgrading, customization and innovation to address more effectively emerging trends.

The execution of BCPs relies on the leadership and commitment of a business’s management. Business continuity is greatly affected by corrupt leadership practices that undermine its proposals. Partial integration of BCP can create a major huddle in business continuity. Additionally, misappropriation of resources meant for BCP undermines business continuity.

Being a risk management strategy, BCP puts its weight on the effects of the disaster. The primary cause of the disaster is not emphasised in its mitigation procedures. It follows that the magnitude of one’s response to the disruption is directly proportional to the magnitude of the cause of the disruption.

An effective BCP provides the framework of carrying out an enterprises objectives (Parsons, & Brouggy, 2016). The framework clearly spells out the extent of disruption in relation to BCP. Marrying this policy with relevant legislative standards and regulations is a key aspect of business sustainability. Furthermore, the framework states the method of evaluating the effectiveness of BCP.

Disaster Recovery Plan (DRP)

A DRP is meant to restore a business back to its original position. In many instances, it is seen as a technical aspect of business continuity (Cook, (2015). The plans steer an organization forward by detailed accounts of every possible eventuality. It offers a contingency plan too.

Customer satisfaction is key to the success of an organisation. DRP is structured in a way that prioritises the needs of the consumers despite the huddles a business may be undergoing.

The strategy of DRP is to minimise the effects of hazardous events. To achieve this prior plans are made to mitigate possible risks in a manner that promotes the continuity of the enterprise in the most effective way possible.

The framework for executing this strategy usually includes an ad-hoc committee. Its mandate may range from identifying important business partners, setting the bar and choosing the most suitable cause of actions.

Business Impact Analysis (BIA)

BIA is preceded by business continuity phases. Its main purpose is to help one’s enterprise to point out its activities and their effect on the business in the long run (Parsons, & Brouggy, 2016). In addition, it also focuses on the consequences of scrapping off those activities from the enterprise.

One primary significance of BIA is the clarity it uses to set apart business management strategies. Most important functions of the business, which are perceived to continue existing in the long run, are identified with ease. These functions are given priority when other business management tactics are explored (Cook, 2015).

The greatest challenge facing BIA is that every time a disaster strikes, it should be flexible enough to suit the scenario. Frequent updates to the plans are a vital requisite to the sustainability of a business.

BIA is a risk management strategy since its key goal is to provide a contingency plan to business against all possible odds. This strategy ensures that all the possible scenarios of risk are evaluated and the most appropriate actions recommended prior to the occurrence of the disruption.

Designing a framework that is simple and inclusive is a bold step towards proper management. Every department of the business is expected to come up with distinct strategies relative to its speciality.

Operational Risk Management Strategy (ORM)

The purpose of ORM is to create a connection between long term strategies and the daily functions of a business enterprise (Slack, & Brandon-Jones, 2018).

ORM benefits an organization by highlighting the importance of operations and process management; in this manner, managers focus on promoting the less costly but effective day to day functions of the enterprise.

Slack, & Brandon-Jones, (2018) noted that all organizations have operations. However, the biggest challenge is the uniqueness of every operation of different organizations.

ORM is a risk management strategy since the success of a business may be paged on its operations; the ability to produce goods and services. What is invested in the business determines the end result. This may be profit or loss. Therefore, ORM is essential in the determination of the most productive operations that are prioritized in production.

The framework of ORM takes into account the transformative nature of a raw product into a final good which a consumer buys. This framework is a process that is worked out over time. Every individual process translates to the continuity or collapse of an organization in case of exposure to risk. The policy for implementing ORM takes into account all the operations and process to detail.

 

References

Cook, J. (2015). A six-stage business continuity and disaster recovery planning cycle. SAM Advanced Management Journal80(3), 23-35.

Parsons, D., & Brouggy, P. (2016). Business Continuity Management. Disaster Health Management: A Primer for Students and Practitioners, 81.

Slack, N., & Brandon-Jones, A. (2018). Operations and process management: principles and practice for strategic impact. Pearson UK.