Indiana Wesleyan University
The objectives of the risk mitigation plan are to provide a series of strategies that an organization can follow to respond to the risks that keep arising in its business environment. These techniques play an integral role in guiding the management's decision-making process by providing reliable steps that they can take to manage, evaluate, and mitigate any form of potential risks that might be facing the organization. The goal of XM Retail is to remain in operation for as longest time possible by obtaining reliable strategies that will guide the company’s investment and decision making processes to ensure that the possible risk that can occur will be limited as much as possible. Therefore, paper aims at presenting the strategies that the company will follow to ensure that any form of risk will be encountered promptly. If it occurs, the company will be able to get back on its feet and pursue further goals that will enable them to become sustainable.
When the company is avoiding a particular risk, they are refusing to accept it. Therefore, the exposure of the risk in the organization is not allowed to come into existence. The organization will avoid engaging in activities that will give rise to risk. Again, the actions of the organization will be predicted by the alternatives the company establishes during decision making to ensure that they can have a wide variety of room to explore the less risky activities that they can engage in. for instance, if the organization desires to avoid the risks that are associated with property ownership, then they will tend to refrain from purchasing buildings for the office floors but will instead go for renting or leasing options (Rafi-Ul-Shan et al., 2018). By successfully stepping away from the activities that will attract the risk, the organization will be able to avoid encountering unanticipated activities. Risk avoidance, in this case, will apply to our organization because it is a retail outlet exposed to serious issues such as the theft of products. Suppose the organization intended to invest in a new area but realized various risk concerns relating to theft and burglary cases. In that case, the management will withhold the decision to make the investment and cancel the projects. Although this might limit the ability of the organization to expand its boundaries, it will be worth pursuing rather than pushing ahead with the investment only to suffer the consequences. Alternatively, the company can anticipate that the employees might find strategies to steal the company merchandise, which will cost the organization a lot. Therefore, to avoid experiencing this risk, they will implement policies and procedures involving employees checking out when they are leaving to ensure that they are not leaving with the company merchandise.
Consequently, there might be a possibility that some of the products that the suppliers supplied could be defective, and this could pose some serious health risks for the consumer if they consume them. Therefore, to avoid this risk, the company will conduct thorough screening on the quality of the products by close checking with the existing health standards to eliminate defective products from harming the company employees. However, although some risks are unavoidable, having a clear risk avoidance will be important.
This involves preparing measures that will enable the organization to avoid putting all eggs in one basket and focus on distributing the risk to various areas. The best scenario for this is when recently, the company was involved in distributing the company assets in terms of geographical location. The company realized that they maintain an inventory of high-value merchandise stored in the same warehouse as what the organization uses to store the rest of the retail products. The underlying risk, in this case, is that the company could end up losing all of its merchandise in case thieves were able to gain access to it. Therefore, to remediate this risk, the company plans to open up three other warehouses in different geographical regions (Naidoo and Gasparatos 2018). If the thieves can compromise one warehouse, the organization will still have other warehouses to supply the required merchandise, thus not running out of business. Another example of risk spreading that the company is pursuing is ensuring that they regularly back up the company data on an external drive. Retaining a copy of the organization's inventory in an external drive will prevent the organization from losing all of its company data due to malware intrusion or computer breakdown. From this perspective, although risk spreading will cost the organization some funds, it will be worth pursuing because it decreases the rate of risk exposure to the organization's critical assets.
This strategy involves any particular security measures or pursuing activities that will play an integral role in reducing the exposure of company assets to risks. This will involve the usage of hazard analysis techniques. These FMEA or FTA practices will prioritize the risks that an organization will experience and reduce the severity of the consequences resulting from the unwanted risk. In situations where it will be impossible to minimize the severity, the organization can turn to implement restrictive controls that will detect the unwanted events before delivering their consequences to the organization by identifying the root causes that will trigger failure. Also, the company can ensure that its controls focus on the decisions that the management intends to pursue and ensure that the process will be improved by increasing the ability of the organization to identify an alternative decision-making design to improve accuracy and avoid blackspots (Tarei et al., 2020). Apart from this, the company can focus on diversifying the security risk at hand by thinking of a wide variety of product mixes, technologies, operations, markets, and supply chains that will provide the organization with the highest possible opportunity to limit high-risk exposure by availing opportunities that are more manageable and acceptable. Lastly, a risk reduction strategy will help our organization by ensuring that when the risk goes against all odds and occurs, the company will rely on the superior decision-making system to guide how the company will get back to its feet and reduce the rate of exposure to more failures.
Naidoo, M., & Gasparatos, A. (2018). Corporate environmental sustainability in the retail sector: Drivers, strategies and performance measurement. Journal of Cleaner Production, 203, 125-142.
Rafi-Ul-Shan, P. M., Grant, D. B., Perry, P., & Ahmed, S. (2018). Relationship between sustainability and risk management in fashion supply chains: A systematic literature review. International Journal of Retail & Distribution Management.
Tarei, P. K., Thakkar, J. J., & Nag, B. (2020). Benchmarking the relationship between supply chain risk mitigation strategies and practices: an integrated approach. Benchmarking: An International Journal.