Insight into risks

Risks are one of an important aspect for the companies and organizations to consider. In business terminology, risks are something, which adds vulnerability in the market position of the companies and organizations. Viewing it from the other perspective, risks are a testing phase, where the personnel need to show their talents in terms of overcoming the crisis phase (Sadgrove 2016). This is applicable for all of the companies and organizations including PositivoBGP, established in Rwanda (Positivobgh.com 2017). Risks can also occur across the borders, which strain the relationship between the companies, organizations and their associate partners. The earlier sentence projects the characteristic of the external risks. Along with this, risks, such as, defective electrical appliance, wires lying bare are the examples of the internal risks. Such risks compel companies like PositivoBGP to encounter huge losses, which are mainly financial. Internal risks like strikes, careless managers and staffs are the risks, which the personnel of PositivoBGP need to manage internally (Positivobgh.com 2017).

Thoughts regarding Foreign Direct Investment (FDI) compel companies like PositivoBGP to face risks in terms of the harsh and orthodox policies of the political parties and the government. Here, assessment of the risks is crucial for overcoming the intensity of the risks. For this assessment, PESTLE analysis seems appropriate, as the company intends to enter into the foreign markets. Within this, governmental interventions act as an obstacle for companies like PositivoBGP in terms of expanding the scope and arena of their business (Positivobgh.com 2017). Imposing restrictions to market entry, introducing bureaucratic procedures for business transactions and tax obligations are the examples of the governmental restrictions.

For averting these risk, post commitment evaluation, reducing or shifting the risks are efficient means. Consideration of the post commitment practices helps the personnel of PositivoBGP to manage the risks properly. Following provides a deeper insight into the post commitment practices:

Developing alliance with the associate partners is important for the companies like PositivoBGP in terms of developing effective framework for risk management. Here, hiring skilled and efficient managers are needed as the employees lack the basic skills for managing the risks. Countering this, involvement of the employees in the risk assessment exercise proves beneficial, as the employees also possess some preconceived skills, expertise and knowledge (Positivobgh.com 2017). This involvement strengthens the bondage between the managers and the employees. Apart from this, sending the drafts to the government agencies helps PositivoBGP personnel to form stable relationship between the government, company and the stakeholders and shareholders. Scanning the current position helps the company to make estimates regarding the future position. Countering this, conducting market research is of great assistance to the company to taking preparations regarding the practice of fair competition with the other brands. Here, setting short-term goals would not benefit PositivoBGP, as the vision needs to be outreached. On the contrary, setting goals, of which the personnel are certain (Positivobgh.com 2017).

As PositivoBGP intends to expand their business, political risks are bound to occur. For averting these risks, the company needs to diversify their possessions. Efficient way in this direction is to hire employees from different socio-cultural background. Delving deep into the aspect, these risks pose as an obstacle for the company in terms of entering to the special economic zones.

Country and political risks

Policies possess the flexibility to safeguard the companies and organizations from the risks. This is also applicable for PositivoBGP. As they are intending to enter into the special economic zones, introducing taxes for the use of renewable energy would prove beneficial. Granting subsidies to the company would be one of an important duty of the governmental staffs in terms of making effective and judicious utilization of electrical appliances at low price (Positivobgh.com 2017). Along with this, insurance of all the electronic appliances would help the personnel to avert the risks of damage, malfunctioning and virus attacks.

Developing a framework is essential in terms of planning the effective management of the potential risks. As a matter of specification, financial structure gains more importance in terms of shifting the charge of the risks to the local employees. Herein lays the appropriateness of rational thinking and consciousness in terms of handing the associate partners with the responsibility of risk management. This shifting includes the risks of conflicts; therefore, indulging into contracts acts as a wise option (Positivobgh.com 2017). Even in the contracts, adherence and compliance to the terms and conditions is needed for averting any unwanted instances.

Within a company or organizations, the employees belong to different social and cultural background. However, they work towards a common goal, achievement of success. However, this diversity consists of high risks- conflicts, discriminations and harassments. Therefore, the personnel need to undertake rational approach towards these issues, so that they can be controlled well in advance. Spontaneity is required in this direction, as negligence can adversely affect the productivity of PositivoBGP. Careless attitude towards minimizing these risks can even degrade the revenue level of the company (Positivobgh.com 2017). Group discussions and open forums would enable the personnel to mitigate the intensity of risks like miscommunication. Along with this, hiring interpreters can also be beneficial regarding mitigating the cultural barriers. This mitigation is important for stabilizing the relationship with the customers. For this, strategic approach can be one of an effective solution, which possesses the flexibility to modify the errors if any.

Financial crisis is one of the major concerns for the companies and organizations, which bars their entry into the foreign market. Typical examples of this financial crisis are inflation, fluctuation in the prices of the raw materials and tax obligations. Along with this, high exchange rates might aggravate the complexities of PositivoBGP in terms of executing the import and the export activities (Positivobgh.com 2017). Effective and judicious utilization of the financial instruments would help the personnel to minimize the financial risks. Protective eye over the cash flows from the internal environment to the external ones would mitigate the occurrences of financial risks.

This is one of an important risk in terms of exchanging the valuables of the company from the host country to the neighboring partners. Here, the risks may take a massive form from committing error of judgment in making strategies for expanding the scope and arena of business. This type of mistakes is an obstacle for the company, PositivoBGP in terms of entering into the special economic zones (Positivobgh.com 2017). The major outcome of this risk is financial, which deprives the company from introducing lucrative, schemes, offers and discounts for the customers.

Environmental, social and technological risks are also important for the company in terms of business expansion. Consideration of these risks is vital in order to think rationally for business expansion. Adopting solid waste management technique for minimizing the environmental pollution reflects the conscious approach of the personnel of PositivoBGP. Along with this, adherence to the environmental directives projects the cautious approach towards the wellbeing of the customers (Positivobgh.com 2017).

Technological risks include cyber crimes, which destroys the self-respect of the customers. Delving deep into the issue, cyber crimes is a forceful intrusion into the personal data and belonging of the customers. These crimes merge the social and technological risks, as cyber crimes involve the life risk of the public.

Explicit usage of the machines and their spare parts strains the internal as well as external functions. The ultimate result here is that the machines turn defective. If the machines do not have insurance, it might compel the company, PositivoBGP to encounter illegal instances. This attaches negative connotation to the aspect of business expansion (Positivobgh.com 2017).

Therefore, the company needs to take into account templates for managing the risks. Segments enhance the clarity of the personnel regarding their performance, which is a gradual progression towards upgrading the current performance.

References 

Chance, D.M. and Brooks, R., 2015. Introduction to derivatives and risk management. Cengage Learning.

DeAngelo, H. and Stulz, R.M., 2015. Liquid-claim production, risk management, and bank capital structure: Why high leverage is optimal for banks. Journal of Financial Economics, 116(2), pp.219-236.

Glendon, A.I., Clarke, S. and McKenna, E., 2016. Human safety and risk management. Crc Press.

Hopkin, P., 2017. Fundamentals of risk management: understanding, evaluating and implementing effective risk management. Kogan Page Publishers.

Lam, J., 2014. Enterprise risk management: from incentives to controls. John Wiley & Sons.

McNeil, A.J., Frey, R. and Embrechts, P., 2015. Quantitative risk management: Concepts, techniques and tools. Princeton university press.

Positivobgh.com (2017). About us. Available at: https://www.positivobgh.com/africa/Info/aboutus [Accessed on 10th October 2017]

Positivobgh.com (2017). Operations in Africa. https://www.positivobgh.com/africa/ [Accessed on 10^th October 2017]

Pritchard, C.L. and PMP, P.R., 2014. Risk management: concepts and guidance. CRC Press.

Sadgrove, K., 2016. The complete guide to business risk management. Routledge.