Post by Stacey Fraser on Aug 18, 2021 10:41:03 GMT
Risk Management
C. Post: On the Discussion Board, please respond to these questions (and we will discuss in class):
1. Is Risk ever acceptable? If so, how much risk is acceptable?
A certain amount of risk is acceptable, in fact needed, I believe for growth and commitment to the mission. I think the amount of risk considered to be acceptable would be based on an individual organization delving deeper into factors such as strategic risk, business risk, and reputational risk. Using a plan with these guiding factors would allow for the best determination of overall acceptability in risk.
2. How would you assess your program/company’s overall risk appetite?
Interestingly, in the two programs I run, I would consider them to have very different risk appetites. One program is mostly based on reputation and has a monthly fee-for-service payment structure – either we called them/visited with them or we didn’t, we get paid, or we don’t. This is a much bigger program with lots of staff, therefore, I can make staffing changes for individuals when they request it, ensuring satisfaction with our services. I would consider this program relatively low risk.
In the other program (TTW), it is a milestone-based payment system with reputation also being key. This example, to me, is much riskier due to the payment structure and effects of staff turnover and only having one staff member. The milestone payment structure is risky, and I do not have the ability to make staffing changes easily to attempt to ensure a positive reputation as easily as my other program. I would consider this program as a high-risk program.
3. Is operating without risk a smart business decision?
I do not believe operating without risk is a smart business decision. I believe avoiding risk would stunt the growth and expansion of an organization and never allow for opportunities. In thinking of using such programs as Salesforce, much of potential growth opportunities would initially be seen as “too risky” and could be eliminated well before due diligence is pursued to determine actual risk.
4. Given its growth, what are some risks that The Fedcap Group faces? (include reputational, financial, structural etc.)
With Fedcap’s growth, risks are to be expected. In terms of reputation, a risk Fedcap should have on their radar is/are the new programs and companies doing what is needed to foster and encourage a positive reputation? Are these programs/companies serving their individuals in a manner that lends itself to a positive reputation? Does Fedcap have parameters in place to monitor this type of concern?
Financially speaking, Fedcap combines with companies and the unknowns of those companies can put Fedcap at risk at any time. Was there full disclosure on all aspects needed? Was staffing fully discussed and both sides transparent? Is HR fully prepared for possible staffing issues for any one company in the event of serious situations? Or will being possibly unprepared cause a huge potential for financial risk in terms of organizational structure, staffing, loss of contracts, etc.
5. How do we engage staff in understanding and actively managing reputational risk?
From a programmatic perspective, we engage staff in actively managing reputational risk by the constant presence of real-life examples. We have a 24 hour call back policy, as an example, and it is constantly part of staffing discussions. The outcome of not returning a call within 24 hours seems small, but in this day and age of social media, we can pinpoint to examples of our individuals posting we didn’t return the call accordingly to the community, including competitors. Additionally, if an individual in our program isn’t happy with our services, they can simply change agencies, causing financial loss, yes, but also a hit to our reputation. Word of mouth or social media platforms is where our reputation is made – good or bad and this type of real-life example has been the most effective way staff can understand managing reputational risk.
6. Discuss a specific example of reputational risk that is directly relevant to your program/company?
In addition to the above example in question number 5, audits are a means of reputational risk. You do well in an audit, basically no one except staff know or seems to care. However, in my program, if you do bad in an audit, the result becomes a risk to our reputation. Following policy and procedure is imperative during our day-to-day work, as audits look for far more than did we serve our individual’s well and meet their needs. Our journey to serving our individuals effectively goes beyond the services we provide but also has a huge emphasis on paperwork and policy adherence.
Translating the importance of audits to reputational risk also points back directly to word of mouth and now social media platforms. Simply put, our competitors and individuals we serve can find our audit results, make them public, and a bad outcome could occur.
C. Post: On the Discussion Board, please respond to these questions (and we will discuss in class):
1. Is Risk ever acceptable? If so, how much risk is acceptable?
A certain amount of risk is acceptable, in fact needed, I believe for growth and commitment to the mission. I think the amount of risk considered to be acceptable would be based on an individual organization delving deeper into factors such as strategic risk, business risk, and reputational risk. Using a plan with these guiding factors would allow for the best determination of overall acceptability in risk.
2. How would you assess your program/company’s overall risk appetite?
Interestingly, in the two programs I run, I would consider them to have very different risk appetites. One program is mostly based on reputation and has a monthly fee-for-service payment structure – either we called them/visited with them or we didn’t, we get paid, or we don’t. This is a much bigger program with lots of staff, therefore, I can make staffing changes for individuals when they request it, ensuring satisfaction with our services. I would consider this program relatively low risk.
In the other program (TTW), it is a milestone-based payment system with reputation also being key. This example, to me, is much riskier due to the payment structure and effects of staff turnover and only having one staff member. The milestone payment structure is risky, and I do not have the ability to make staffing changes easily to attempt to ensure a positive reputation as easily as my other program. I would consider this program as a high-risk program.
3. Is operating without risk a smart business decision?
I do not believe operating without risk is a smart business decision. I believe avoiding risk would stunt the growth and expansion of an organization and never allow for opportunities. In thinking of using such programs as Salesforce, much of potential growth opportunities would initially be seen as “too risky” and could be eliminated well before due diligence is pursued to determine actual risk.
4. Given its growth, what are some risks that The Fedcap Group faces? (include reputational, financial, structural etc.)
With Fedcap’s growth, risks are to be expected. In terms of reputation, a risk Fedcap should have on their radar is/are the new programs and companies doing what is needed to foster and encourage a positive reputation? Are these programs/companies serving their individuals in a manner that lends itself to a positive reputation? Does Fedcap have parameters in place to monitor this type of concern?
Financially speaking, Fedcap combines with companies and the unknowns of those companies can put Fedcap at risk at any time. Was there full disclosure on all aspects needed? Was staffing fully discussed and both sides transparent? Is HR fully prepared for possible staffing issues for any one company in the event of serious situations? Or will being possibly unprepared cause a huge potential for financial risk in terms of organizational structure, staffing, loss of contracts, etc.
5. How do we engage staff in understanding and actively managing reputational risk?
From a programmatic perspective, we engage staff in actively managing reputational risk by the constant presence of real-life examples. We have a 24 hour call back policy, as an example, and it is constantly part of staffing discussions. The outcome of not returning a call within 24 hours seems small, but in this day and age of social media, we can pinpoint to examples of our individuals posting we didn’t return the call accordingly to the community, including competitors. Additionally, if an individual in our program isn’t happy with our services, they can simply change agencies, causing financial loss, yes, but also a hit to our reputation. Word of mouth or social media platforms is where our reputation is made – good or bad and this type of real-life example has been the most effective way staff can understand managing reputational risk.
6. Discuss a specific example of reputational risk that is directly relevant to your program/company?
In addition to the above example in question number 5, audits are a means of reputational risk. You do well in an audit, basically no one except staff know or seems to care. However, in my program, if you do bad in an audit, the result becomes a risk to our reputation. Following policy and procedure is imperative during our day-to-day work, as audits look for far more than did we serve our individual’s well and meet their needs. Our journey to serving our individuals effectively goes beyond the services we provide but also has a huge emphasis on paperwork and policy adherence.
Translating the importance of audits to reputational risk also points back directly to word of mouth and now social media platforms. Simply put, our competitors and individuals we serve can find our audit results, make them public, and a bad outcome could occur.