Risk Management Procedures - Essay Example

? (Module) RESEARCH PROPOSAL GENERAL RISK MANAGEMENT PROCEDURES IN SMALL AND MEDIUM ENTERPRISES IN THE SAUDI ARABIA 0BACKGROUND TO THE STUDY Risk management in itself is an area of management like any other and it involves aspects and procedures of managing risks as they happen. Risks are part of our daily lives right from our houses till wherever we go in the event of conducting our daily routine events (Adams, 1995). Occurrence of risks can to an extent be termed as part of our lives since in every thing we undertake at least contains an aspect of risk. Return venture projects or business organizations like most in Saudi Arabia as well faces a variety of risk and risk related phenomena like credit risks, Economic risks, financial risks, for big venture who deal in trades abroad also face exchange rates risks (Chong, 2004:246). Just by the mere fact that risks exist and are faced by every individual unit in the society in itself posses a threat to the existence of man. This is because man is always uncertain about the likelihood of success out of an involvement before actually it occurs successfully. According to, (Adams, 1995), a risk is the likelihood of a loss incase a hazard takes place. Such fears is what propels us to look at risk in the general perspective, its nature, kinds of risks, how to handle them or even ways in which we can try to do away with such risks so that man lives in if not completely risk free because this is not possible then at least at reduced levels of risk. In this study we are headed towards studying of risks as per the risks faced by business organizations in general, also its going to involve the study of the vast impacts of such risks and how to try minimizing the risks for the benefits of the businesses operations in terms of returns and reduced costs of operating such businesses. Risk management in this case is to be looked at through identification of the risks, looking for ways of assessing the risks in order to determine their intensity and then decision making on which ones the organization can do with and which are to must avoid so that the organization is able to maximize its chances or opportunities of maximizing business (Adams, 1995) 2.0 OBJECTIVE OF THE STUDY Generally out of the study on risk management the researcher intends to find out on several aspects about risk and risk management. The study is geared towards finding out on:- a. What a risk is. b. What forms or type of risks that faces business organizations in general? c. What effects or impacts do these risks have on the organizations and to what intensity do they impact on the businesses? d. How can the risks be mitigated or reduced in real practice? The study of all the above aspects of risk entails the assessment and categorization and risk components hence risk management as an area under investigation (Adams, 1995) 3.0 RESEARCH PROBLEM STATEMENT As stated clearly under the background of the study and clarified further under the research objectives it is very safe now to state that the major problem under investigation is to find out more about the policy on risk, the policies and tools of risk management. Therefore, the driving factor is risk and its uncertainty in business management. The researcher is obliged to find out through this research the difficulties as a result of risk and how such challenges can be done away with under the broad topic of risk management (Mugenda, 2005:89). 4.0 LITERATURE REVIEW This section of the proposal on risk management is to look in the various articles that address the evolution of risk through since man started thinking about the existence of risk to date. It is also going to help us to identify fertile grounds for further active research on risk and risk management. 4.1 Definition of risks According to (Abkowitz, 2008), …’’ Risk is the likelihood of a loss occurring through the occurrence of an hazard that can be analyzed and measured into quantities’’.....he goes ahead to explain that its because of risks that men and women are always kept thinking so hard on their safety and the uncertainty of events, this even makes man very cautious of all the activities that they are always involved in as well as making them consider very careful steps in everything they do. A risk is also the possibility that less than the expected returns will always be experienced by a business venture. 4.2 Categorization of risks According to (Padgett, 2009), Risks in business are further categorized as either …’’Credit risks, Operational risks and Market risks…..’’ It is argued that all the sub risks that affect any business venture such as the economic, financial, exchange rate, speculative risks and many others falls under the three major categories as mentioned above. These risks are also argued to be only manageable up to some critical rages that must always be set by managements of various business organizations. It is also argued that risk can also be under the three categories as either measurable or quantifiable which exists in many forms, risks can also be non- measurable (Marx, 2009). 4.3 Impact of risks: Risk Assessment, Risk Analysis. The determination of impact of risks in line with the day to day operations of businesses in Saudi is only possible when the various risks are assessed and analyzed and positive results of the analysis placed under consideration. According to (Kasperson, 2005) ‘’…...risk assessment are the principles and practices that are employed to determine the scope of risk and risk coverage, the extent to which risks are likely to occur is always very certain and lethal incase they take place….’’ A further analysis on this states ‘’….risk assessment is the safest and surest way of determining the depth or penetration of risks on various occurrences to gage the extent of their effects on relevant phenomena…’’. Risk Analysis on the other hand incorporates scientific techniques or tools of analysis in analyzing a pool of risks (Kasperson, 2005). This enables risk analysts to categorize the different forms of risks as well as giving a ranking to the various impacts depending on their intensity, starting with the most lethal ones reducing them in that manner to those with the least impacts. “Therefore, the need for risk assessment can never be underestimated given that it is the process that will always lead individuals into risk management activities. Risk Assessments are a critical requirement and necessity for most human and businesses organizations’’ (Chong, 2004) Adams, 1995 further states that”…challenges under risk management exist under three main dimensions: - challenges by risk assessors; challenges by businesses and organizations and even challenges by the governments. Risk assessors face very fresh and new challenges, in particular as technology advances developments in wide areas have exceeded the ability of research bodies or assessors to generate safety data and of risk assessors to change and apply appropriate tools to evaluate emerging risks (Abkowitz, 2008). Various literatures as seen above talks on the various ways of defining what a risk is. The categories of the various forms of risks identified and their general impact on phenomena. The principles and procedures used in assessing and analyzing to obtain the impact of such risks have also been looked at through many literatures. The major purpose of conducting this research now lies in determining the above findings on identified business organizations; this solely drives us to what is called risk management in small, medium and large or multinational business organizations. 5.0 METHODOLOGY 5.1 Introduction The research methodology in this case is to help define the sample population to be obtained from the entire population. It’s also meant to devise a way in which the population is to be picked i.e. data collection methods identified, the methods which should be used in picking and analyzing the data obtained. The research design to be used in the research is also defined in this part from where the research findings can be designed and analyzed and an effective and fair presentation produced. Ethical considerations in research will also be discussed in details here (Mugenda, 2005). 5.2 Descriptive Design In our research case, descriptive research method will be adopted alongside the quantitative research method; the data to be described will be collected using qualitative research methods. The research design that exists for the above research can either be quantitative or qualitative research designs as well. The decision to be made on the use of either qualitative design or quantitative design is based on whether the type of data to be dealt with is either qualitative data or quantitative data respectively, on our case we are going involve both given that we are going to conduct personal interviews or even telephone interviews to ensure we have the psychological expectations and personal feelings of the women affected by the educational program, (Benjamin, 1999). Again we have to ensure that we have enough numerical data to aid in the calculations for efficient decision making. Depending on better considerations based on well considered facts and figures including constant change or turnover, limited resources and the form or nature for the population to be dealt with, (Flick, 2002).In line with this we are going to consider 100 small and medium enterprises, to these we are going to questionnaires which contain both open ended and closed ended questions. The open-ended questions will help us gather data for qualitative analysis while the closed-ended questions provide us with qualitative data for descriptive analysis. 5.3 Qualitative Design Qualitative research design works out or establishes statistically significant conclusions about a population by doing a study on a representative sample of the population 100 Small and Medium enterprises out of the required number of 500 such businesses in Saudi Arabia to be studied. Since we are acting or conducting our research through living beings, under this method we would employ descriptive form of quantitative analysis. Experimental quantitative design will also be employed on the determination on the accuracy or the extent to which dependent variables are controlled by the independent ones i.e. the extent to which risks area affected by surrounding factors. Often, surveys, correlation studies, and measures of experimental outcomes are evaluated to establish causality within a credible confidence range or levels of confidence, (Luhman, 2001) 5.4 Sampling Design The sample is collected using sampling technique and the most probably adopted technique is the simple random technique because it is the simplest method to apply since its cheap and gives a fair representation of the population to be studied (Benjamin, 1999). In as much as the researcher is going to collect data by the use of primary sources of data collection, they are also in the verge of employing the secondary sources of data collection. Secondary data is got from books, journals, periodicals, online sources including all the relevant established sources that instead of giving one on one sources will provide for a platform to obtain the data from wherever external source. Such sources will be got from private or public libraries and resource centres of the researcher’s choices. 5.5 Ethics and Research Ethics in research demands that norms, principles and practices that are generally accepted are not deviated from. The highest levels of ethics must be maintained for all the participants in a research exercise right from the sponsors, research assistants and the participants. There are very many relevant ethical issues to be taken care of like the benefits explanation to the respondents, assurance of confidentiality, obtaining of free consent, voluntary participation as well as the protection from risk. The rights of the respondents like:- explanation on how they would benefit from the research, assurance of confidentiality of information they give out as well as their safety should highly be taken care of. To the sponsor, the researcher owes them the responsibility of ensuring that the sponsors confidentiality is maintained, their identity undisclosed except with their permission and also the non-disclosure of the research findings by the researcher for fear of being used against them by their competitors, sponsors also have the right to quality research. Research assistants are also owed a sense of responsibility by the researchers in that their security from harm is taken care of, their welfare in terms of benefits should also be given timely consideration. 6.0 LIMITATIONS The research study on risk management to be conducted on small and medium businesses would not be that effective because the population targeted is very large as compared to the sample size selected. If a larger sample size was to be taken then resources would not also be enough. Limited number of the research assistants is also a limitation. 7.0 CONCLUSION An investigation into how risk management is conducted in small and medium enterprises is an equally wide research field that will expose a further area of research work and the research will also help in the formulation of the appropriate recommendations that are likely to further help in supporting the small and medium enterprises manage the risks they face. List of References Abkowitz, M. D. (2008). Operational Risk Management: A Case Study Approach to Effective Planning and Response. ISBN-10 0470256982; ISBN-13 978-0470256985: London publishes. Adams, J. (1995). Risk: An introduction. Toronto: Happer Collins. Benjamin, P. (1999). Quality Research Writing Techniques. New York: Paragon Books. Chong, Y. Y. (2004). Investment Risk Management. Hong kong: Pyeng Cho books publishers. Flick, U. (2002). An introduction to qualitative Reasearch(2nd ed). Thosand Oak: Sage Publishers. Kasperson, R. E. (2005). The Social Contours of Risk (Volume 2): Risk Analysis, Corporations, and the Globalization of Risk. ISBN 1844071758: Earthscan Publications. Luhman, N. (2001). Qualitaive & quantitative Research Methods. Chicago: Press Bulls Publishers. Marx, D. (2009). Whack-a-Mole: The Price We Pay for Expecting Perfection. Princeton: London Publishers. Mugenda, O. (2005). A simple Approach to Research. Nairobi: City Guilds Publishers. Padgett, C. M. (2009). The Project Success Method: A Proven Approach for Achieving Superior Project Performance in as Little as 5 Days. Washington.House of price. Read More