Critical evaluation of a Risk Management Framework
Proficiency and effectiveness in business organization are determined by several operational factors that must be considered, and well evaluated to improve and sustain high performance in the organization. One of these issues that play a great role in business management is the risk management, which has various principles and operational approaches that enable the managers and the stakeholders to make wise decisions towards the organization. There are several benefits that are accrued by organizations that have effectively integrated sufficient risk management strategies in their operations. However, these merits are associated with the internal and external context that affects risk management in an organization (Waring & Glendon, 1998: 27). Some of the factors that are included in the internal context, that should be considered by an organization when defining the effects of risk management are such as the culture of the organization, the various roles of the internal stakeholders, the structure of the organization with inclusion of the resources and capabilities of the organization and the outcomes or objectives that the organization targets at achieving. On the other hand, the external factors that need to be considered when defining the risks associated with an organization are such as the regulatory requirements, cultural environment, the political factors, socio-economic factors and the market where the organization operates its businesses (Keefer, 2007: 24). In addition, the identification of the external stakeholders is a factor that is very essential in defining the issues that affect the risk management of an organization and those which help in defining the risk management framework that influences the operations of a business organization when considering risks associated with the organization. This paper aims at ascertaining the risk management framework of an organization with reflection on the Game Investment Pty Ltd. It will also rely on the organization to assess the effectiveness of the framework in relation to risk management. An evaluation will be done to confirm whether the risk management framework discussed will have fully addressed the elements of risk management model by describing the effectiveness and appropriateness of the framework and considering the effectiveness of the framework in addressing factors like management systems, culture, power and organizational environment identified by Waring and Glendon (Waring & Glendon, 1998: 27). Risk Management Framework
The understanding of the risk management framework can be best reached at after a clear comprehension of the importance of the risk management in any business organization. People have different perception on the meaning of risk and this creates the difference in the views they have towards risk management. Some individuals view risk as a tool that should be minimised or avoided at all cost for a business to be successful. However, avoiding risks is not the solution that would make an organization to be successful in increasing its sales, or in reducing operational costs to increase the profits. The best solution and the critical issue thus is risk management (Wolosky & Heifetz, 2002: 1). How should organizations manage risks so as to increase the output at fewer inputs? The strategies and approaches that the management of an organization uses to improve the operations and performance of an organization are similar to those that are applied in managing risks in an organization. This is true with consideration of the operational strategies and the decision strategies which are the two main management strategies employed by organizations to improve effectiveness and efficiency in the organization (Coffin, 2004: 80). Thus, effective management consisting of clear...