The aspect of Risk Management is placing a major role in BSSL business in various fields such as weather, environmental suitability, oil and energy, financial, real estate, leisure& recreation, property, manufacturing. Risk Management is involved in adopting and applying a systematic process to identify, analyze, evaluate, treat and monitor risks so that it is reduced and maintained within acceptable levels. Blue Star Line purchases the goodwill and services but does not ship.
Risk Management is a business tool and a part of “good management” and planning processes. It encompasses an overarching governance program.
This three-tier approach provides a systematic and documented management process.
- Governance establishes the accountability and responsibility of the Council.
- Risk management is the tool or process used to ensure governance principles are applied.
- Business continuity is the process in place if a significant risk event occurs that results in a disruption to normal business to ensure that service delivery continues and returns to normal within a short period. (Brown, 2004).
Real Estate Risk Management
Real estate investment to investors with necessary cash flow, tax benefits, loss of management control must be addressed before investment. A claim for the higher rate of investment in the real estate business and this investment property brings liability to the business. (Dabestani-Ryba, 1996-2005).
Real estate having legal problems and risk management provides solutions by resolving disputes and threats, and eliminating since 90% cases are in dispute resolution for the success rate in time-tested methods. A competitive risk occurs when there is a change in the competitors, customers, and suppliers, as changes reduce the ability to create values and differentiate between products and services. The financial risks in real estate are both direct and indirect, and the focus relates to both income statements and balance sheets. The rate and volatility of returns expose risks to property investors.
Risk management in energy and oil
The energy price is mainly controlled by the supply and demand force which is making fluctuations, inversely, on the largest oil supplies. An energy crisis that may arise in the future may force sellers to sell the oil at higher prices which may affect the shipping business in case a recession occurs in the economy. The energy is changing from one type to another for the design of power plants. These energy productions involve pollution to the environment with a different source of energy getting polluted in different ways. Global warming is occurring due to gases like carbon dioxide to ambush heat in the earth’s atmosphere, increase the earth’s temperature and raise the ocean levels. (The secret lives of energy, The energy story, 2002).
Risk management in manufacturing
The disequilibrium occurred in business in various departments like production, accounting, sales, as such material may not be purchased in time, or insufficient materials, etc. manufacturing sector is making a shift in technology for the development and new equipment for yield and pricing of products. Managers are operating for the problem-solving on the basis of giving- and- take of ideas. The managers achieve the goals to help the team act independently while translating ideas for decision-making.
The cost-effective allocation of resources identifies the safety food exposure, which helps in reducing the illness and injury caused due to consumption of food products. The manufacturing sector’s risks posed by high-quality goods and timely supply to the customers need to suit cost-effective products with the new technology.
The cost of development and improvement of the quality products for direct research programs with new technologies in different areas for effective productions increases, but the market must accept these products. Large savings in the cost of production helps create funds that could be used to improve the standard of purity and quality standards. The new standards are used to persuade the cost reduction and attractive innovations in manufacturing sectors.
Risk management in Environment sectors
There are a variety of environmental problems which affect the world economy, predominately water pollution. Ships spill 5% of the oil into oceans which thus become a pollutant. Water also transports pollution from one place to another. Chemicals are also dumped into water from the industries and industrialized world through pollutive practices. The toxic wastes and sewage refuse are dumped into the water, and the rainfall pushes them to the harbor, which creates a problem for the ship in the harbor, and these pollutions will affect human life. (Water pollution – Effects, 1999).
The environment consists of risk in waste management in the transportation of waste to a safe and cost-effective approach to reduce the risk in the environment. This waste consists of hazardous products like lead, cadmium, chromium, and handling these products causes danger to health and threat to the environment also.
These risks occurred in various sectors of industries has a major loss of finance and the environment is affected, with a loss to the investors who have invested in various sectors and the company owners, risk managers and officers responsible areas must have a close watch on these risk in the business.
This shows that Risk Management is, therefore, an integral component of all daily business activities. Profit and success are outcomes of risk-taking, and positive risk management supports the development and implementation of the strategy. Every business has risk and opportunity in everything they do, and as the environment in which they operate changes, risks and opportunities also change. Effective risk management is a means of monitoring these changes.
References
Brown, Lawrie. (2004). Security risk management overview. Web.
Water pollution – Effects. (1999). The Environment: A Global Challenge. Web.
The secret lives of energy, The energy story. (2002). Community Science Action Guides. Web.
Dagestani-Ryba, Neda. (1996-2005). EscapeArtist Inc. Web.