Consider an Debt Recovery and Collection Agency company, and think about how the
ID: 347075 • Letter: C
Question
Consider an Debt Recovery and Collection Agency company, and think about how the culture and structure of that organization affects its approach to risk management. With these thoughts in mind:
Briefly describe the organizational structure (governance). This should include elements of culture, internal and external stakeholders, and the impact of the role of certain stakeholders on the organization’s risk management approach.
Describe the organization’s approach to risk management.
Describe the advantages and disadvantages of its approach.
Make one or more recommendations on how you would improve its approach.
Explanation / Answer
Meaning of Risk Management- it is defined as identification, analysis and control of those risks which can threaten assets, operations and other responsibilities of an organization. It starts with the identification of risk( it means finding the risks faced by a business. It is also helpful in understanding the different types of risk), then assessment (after the risk is identified, then it need to be assessed, both the probability of an event and the severity of its impact is to be assessed), evaluation(it establishes how much risk a business wishes to accept) and lastly management approach( treatment to reduce the impact of the risk) is performed. Enterprise Risk Management approach is the most recommended approach which support and improve the risk awareness culture.
The following are the advantages
1. It identifies risks and opportunities of the company.
2. It understands the probability and impact of risks
3. It prioritize which risk should be strategically managed.
The following are the disadvantages:
a. It is a costly and time consuming approach.
b. If the risks and opportunities are misunderstood, it could cause incorrect strategies to be implemented.