Possible Recession in the Final Quarter of UKs Financial Year - Literature review Example

The Portfolio of Current Issues in Risk Management Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 15th November 2012 Student’s Name:​​​ Review No.:​​1 Source of article:​Investors aren’t out of the woods just yet Author’s Name:​Emma Dunkley​ Date of Publication:​November 04th 2012 Themes:​​Possible Recession in the final quarter of UK’s financial year Commentary:​​416 words Brief Summary of Article:​ The UK economy posted an economic growth during the third quarter. This means that the country is recovering from the long recession. However, the author argues that this could be premature recovery (Dunkley 2012). The 1 per cent economic growth is the highest level of growth since the third quarter of 2007. However, there are various impending challenges that could change this growth track. Therefore, a triple fall back in to recession is possible during the final quarter; it is too soon to rejoice. Economic reports on the official GDP data are different from the reports relayed by the companies trading in the UK. Richard Buxton, head of UK equities expects a gradual economic growth in the next two years. However, weak global trade and other factors will affect this projection. Companies that rely on self-help improvement instead of economic activity will perform well (Dunkley 2012). Personal Commentary: Risk management is the process of identifying, assessing and prioritizing of risk and the economic coordination and application of resources. This is in order to reduce, monitor and control the possibility and/or impact of unfortunate/unexpected events (Sermon 2012). The aim of this paper is to analyze the risk management process of the non-profit organization in its facilities construction project. The global economy is at a risk of going back to recession. There has been great recession in the UK labour market. This has caused high level of unemployment. However, this trend can change. In order to manage and reduce the risk of impending recession, the economy can undertake several risk management measures. For example, UK’s organisations should undertake cost-cutting measures. This first step should be bench marked by the “best practices” that are used to reduce expenditures. Additionally, organisations can undertake headcount methods of cost reduction. Companies need to leverage the expertise offered by their operating environments. They should identify investment opportunities that can create efficiency and lower costs for long. It is possible that jobs will be lost during this period of recession. However, companies can develop smarter ways of overcoming the situation (Bell 2012). The second step that organisations can undertake to control and manage recession is to describe to the operational managers the pressure that the company is facing. They should be advised about the targets that the company’s financial position has dictated upon cost reduction. The aim would be to ask the managers to assist in achieving the organisational goals and to suggest more ideas that can help in improved efficiency and market position. This would make the managers part of the solution. Additionally, the company should identify the operational managers that are concerned with the business strategy and to replace that are opposed to risk management (Bell 2012). References Bell, D 2012,.’UK Unemployment in the Great Recession’, Journal of National Institute of Economic and Social research, vol. 222, no. 1. pp. F2. Dunkley, E. (2012) Investors aren’t out of the woods just yet. The independent, November 04th [online] Available at http://www.independent.co.uk/money/spend-save/investors-arent-out-of-the-woods-just-yet-8280183.html [accessed 14th November 2012] Reddy, S,. & Davis B. (2012) Global Recession Risk Rises. The Wall Street Journal, October 09th [online] Available at http://online.wsj.com/article/SB10000872396390443294904578044311369553152.html [accessed 14th November 2012] Sermon, M 2012, “CMGT 562 Engineering Risk Management: History/PMP Risk Discussion’, via The Catholic University Of America, Engineering Management Program Student’s Name:​​​ Review No.:​​2 Source of article:​ Huge challenges ahead for Sir Mervyn King’s successor Author’s Name:​ Ian King ​ Date of Publication:​ November 14th 2012 Themes:​​ Change, control and business continuity Commentary:​​341 words Brief Summary of Article:​ It is challenging when a bank as big as Bank of England faces change of its leaders. For example, the bank’s current governor, Sir Mervyn King is leaving the bank. The Bank has been publicising its inflation report since August 1997 (King 2012). It may seem as if this practice was inevitable because the bank has been independent since May 1997. However, this is a step that has helped in enlightening the bank’s stakeholders. Therefore, they are able to understand the operations and policies used in decision making (King 2012). Personal Commentary: Change is good for any business. However, too fast or too slow change can cost a business a lot of money. According to Schrage (2012), leadership should not be too fast/ too slow. It should be “just right”. Businesses should aim at managing risk in a business that is facing change. This step is critical because when organisations are undergoing change they cause environmental destabilization. Therefore, organisations should incorporate organisational change in project management. This helps in preserving the integrity of the organisation’s steps towards risk management. Additionally, companies should practice avoidance. This involves planning for impending change in order to reduce the impact it would have on high risk business segments, processes and on stakeholders. Organisations should also learn to account for the available resources. This means that a designated group should accept responsibility for risk management. Some of the people to assign such responsibilities are internal experts or external specialists. Such persons can help in monitoring organisational risk and recommend a viable action (Atkinson 2002). Organisations can also practice alignment. This involves developing change and the change process in order to reduce possibility, effect and various risks that come by when real change takes place. According to Atkinson (2002), many businesses manage risk by becoming “change followers”. This means that they wait for other businesses to set the pace for them before they can act. Therefore, such businesses keep watch of how competitors, suppliers and other organisations perform with effecting their own new plans. By implementing these measures, UK organisations can reduce risk that comes from change in organisational leadership, employees, hard wares, soft wares and operating systems. References Atkinson, P. (2002) Riding the Winds of Change. Change Management. Management Services, February, 2002 [online] Available at http://www.philipatkinsonconsulting.com/pdf11.pdf [accessed 15th November 2012] King, I. (2012) Huge challenges ahead for Sir Mervyn King’s successor. The Times, November 14th [online] Available at http://www.thetimes.co.uk/tto/business/economics/article3600014.ecel [accessed 14th November 2012] Schrage, M. (2012) Are You Driving Too Much Change, Too Fast? Harvard Business Review, November 14, 2012 [online] Available at http://blogs.hbr.org/schrage/2012/11/are-you-driving-too-much-change.html [accessed 15th November 2012] Student’s Name:​​​ Review No.:​​3 Source of article:​Leveson Report: What price will the press have to pay? Author’s Name:​ Lisa O’Carroll and Roy Greenslade Date of Publication:​November 11th 2012 Themes:​​Culture, Risk appetite Commentary:​​347 words Brief Summary of Article:​ The article discusses the impact that the enquiry by Lord Justice Leveson ‘Leveson inquiry’ will have on the privacy and freedom of press releases. The enquiry arose due to increased and libel in blogs and the social media. This enquiry’s report had made newspaper owners and editors to be nervous. However, others feel that such a control is alright because it is an equivalent of risk management (Carroll & Greenslade 2012). The article reveals that the inquiry was prompted by a phone-hacking scandal. The inquiry has covered various celebrities involved in speech violation. However, some people feel that press freedom is essential for healthy democracy. The main question is whether the press can ever be trusted with self-regulation (Carroll & Greenslade 2012). Personal Commentary: Culture refers to ways of doing things of a given society. For example, freedom of speech is practiced differently in different societies. The above article has discussed the issue of freedom of speech and the risk involved with it. Organisations should establish and implement effective risk management towards freedom of speech. For example, companies can encrypt their documents and information in order to protect personal privacy. Accurate scientific grounds should be used to determine risk management. Organisations should establish the materiality of the psychological effects of several forms of speech; such as violent speech. They should then establish public policies aimed at controlling and regularizing freedom of speech (Financial Services Authority 2003). Freedom of speech should not go beyond the bounds of the target audience. Therefore, any communicator should take responsibility for speech that reaches other “:listeners”. This is meant to control communication within the intended social circle. For example, any commentator that publishes insightful information in the media should be punished. This is because such information would have reached unintended audience and it can create tension in the society and business community (Financial Services Authority 2003). It is also important that businesses should pay much attention to the cultural changes in the 21st-century. This is because cultural changes are becoming unprecedented. Schools and colleges rely on cultural changes over time. This means that in order to reduce risk that is associated with cultural change students need to be taught how to behave in a multicultural society. The freedom of speech applies once more in this scenario. This is because different societies have different ways of expressing themselves. For example, the White society is known to be more straight-forward while the Asian society is known to be more conservative (Lumby & Foskett 2011). References Carroll, L., & Greenslade, R. (2012) Leveson Report: What price will the press have to pay? The Guardian, November 11th [online] Available at http://www.guardian.co.uk/media/2012/nov/11/leveson-report-price-to-pay [accessed 14th November 2012] Financial Services Authority (2003) The Combined Code on Corporate Governance. FSA Lumby, J & Foskett, N 2011, ‘Power, Risk, and Utility: Interpreting the Landscape of Culture in Educational Leadership’, Educational Administration Quarterly, vol. 47 no. 3, pp. 446-461. Student’s Name:​​​ Review No.:​​4 Source of article:​The L’Aquila earthquake trial reminds us that scientific evidence shouldn’t determine public policy Author’s Name:​ Graeme Archer Date of Publication:​October 26th 2012 Themes:​​Risk assessment Commentary:​​204 words Brief Summary of Article:​ The article discusses the risk assessment that the policy makers in Italy used in averting the disastrous earthquake that has rocked L’Aquila. The mathematical or scientific assessment of the earthquake occurrence and its impact may not have anything to do with the flooding in the country. Currently, the scientists in Italy have been found guilty for failing to understand the likelihood of the L’Aquila earthquake (Archer 2012). Personal Commentary: Risk is a major concern for investors, employees and managers. Policies and practices keep on changing and so are the protection and responsibility matters. As a result of poor risk assessment, businesses get exposed to public scrutiny and blame (Kemshall & Prtchard 1997). Initiatives such as Community Care Legislation are aimed at amending the legislations governing the community. Businesses need to develop means of averting and managing risk from economic decisions and natural calamities such as floods and earth quakes. First, organisations should prepare a portfolio assessment. This aims at ranking business portfolios in order to determine high risk assets. They should also approximate the extent of property damage and disruption to business operations expected from the natural calamities. This would help them to establish methods of Alternative Risk Transfer (ART). Portfolio assessment should also aim at securing the best advice for insurance negotiations (Kemshall & Prtchard 1997). Secondly, businesses should conduct site surveys in order evaluate the hazard, assess business vulnerability and evaluation escalation. Such a procedure would also help a business to estimate the expected loss and establish risk mitigation options (Kemshall & Prtchard 1997). Thirdly, businesses should install major asset protection devices and systems. For example they can establish fire detection and fighting systems, shut-down systems and standby electrical power systems. Such devices would help businesses to reduce risk from the impact of a natural catastrophe (Kemshall & Prtchard 1997). Fourth, businesses should establish Business Continuity Management. This entails training, emergency planning and BCP stress testing among others. These help in managing the situation after it has occurred (Kemshall & Prtchard 1997). Lastly, some governments have been manipulating their economies. According to Alvestrand (2003) political risk is essential to the risk management measures. It is from this risk that some businesses get to benefit while others lose. When governments impose high tariffs and trade barriers it creates unhealthy risk. This is because such steps chase away investors. On the other hand, when governments establish discounts, incentives and subsidies, they reduce investment risk. Therefore, they promote investment. References Archer, G. (2012) The L’Aquila earthquake trial reminds us that scientific evidence shouldn’t determine public policy. The Telegraph, October 26th [online] Available at http://blogs.telegraph.co.uk/news/graemearcher/100186609/the-laquila-earthquake-trial-reminds-us-that-scientific-evidence-shouldnt-determine-public-policy/ [accessed 14th November 2012] Kemshall, H., & Prtchard, J. (1997). Good Practice in Risk Assessment and Risk Management: Protection, Rights and Responsibilities, London. Jessica Kingsley Publishers. Alvestrand, V. (2003) Gauging the Conditions.Information World View, Iss.192, pp.15-16 Student’s Name:​​​ Review No.:​​5 Source of article:​ America could do better than Barack Obama; sadly, Mitt Romney does not fit the bill Author’s Name:​ Anonymous Date of Publication:​November 03rd 2012 Themes:​​Change and power Commentary:​​ 380 words Brief Summary of Article:​ The above article discusses the decision by ‘The Economist’ newspaper to endorse President Barack Obama for a second term in office. The issue is related to risk management because there were analysis and risk assessment in making proposal. There was need to weigh between Barack Obama and the Republican challenger, Mitt Romney (Anonymous 2012). From the article, Obama is said to have several shortcomings. However, Mitt Romney is said to have changed his position on policy issues too often. Romney is said to have interchanged his stand on health care and foreign policy very easily. Failure to have a firm stand posed risky to the interests of the citizens. Personal Commentary: Businesses face political risk, uncertainty and influence depending on their size, nationality and network of international stakeholders. Managers can address political risk by establishing and implementing personalised risk alleviation methodologies. These methodologies should take in to account the particular issues affecting a firm’s risk status. The insurers can carry out mitigation strategy by assessing the correct nature and price of political risk (Conroe 2003). Power is manifested in the economic and government policies. Therefore, the policies that are effected by the people in power affect economic operations. For example, decisions on matters of governance affect the level of business risk. When the people in power establish laws on taxation and interest rates, it affects the economic performance. Investors analyse the level of business risk by observing the policies that leaders put in place. If a president establishes positive policies on economic development it means that the economy will stabilize. This is because the revenues are in balance with projected expenditures. A stable economy attracts more investors as opposed to a less stable economy (Conroe 2003). According to Scott (1997), reduced government spending in war and development of weapons is also a measure of risk management. Therefore, economies are able have more funds for economic development. The economies that concentrate more resources on internal security rather than external defence attract more investments. Policies on technological advancement and web security also reduce risk associated with e-commerce. It is important for the persons in power to hold consultations with one another. According to Waring & Glendon (1998) consultations strengthen planned changes. Parties at all stages need to provide information relating to programme risks. Businesses and investors should also participate in political debates. This means that they should have a high bargaining power. The businesses should argue that they have the capability to create job opportunities, transfer technology and facilitate more foreign direct investments. This can help such businesses to obtain government tenders, contracts and funding. References: Anonymous. (2012) America could do better than Barack Obama; sadly, Mitt Romney does not fit the bill. The Economist, November 03rd [online] Available at http://www.economist.com/news/leaders/21565623-america-could-do-better-barack-obama-sadly-mitt-romney-does-not-fit-bill-which-one [accessed 14th November 2012] Conrow, E. (2003). Effective Risk Management: Some Keys to Success, New York: AIAA Publisher. Waring, A. & Glendon, A.I. (1998). Managing Risk. London: Cengage Learning Schott, H. (1997). Risk Management: Concepts and Guidance, New York: Diane Publishing. Read More