Tuesday, May 21, 2019
Organizational Risks & Mitigation Methods Essay
As per our discussion last week Ive prepared this memo that outlines the risks that CWTI faces and methods of mitigation for those risks. The goal of this exercise is to have a starting orient for establishing a risk management process within CWTI. Below Ive identified risks and provided suggested methods of mitigation for each. Id like to point out that speckle most of these risks have more than one potential mitigation method, I chose to present the method I believe would be most successful for CWTI.1.)Risk of magnetic variation in foreign exchange range USD receivablesMitigate utilise control method ie. forward contracts, hedging etc.2.)Risk of fluctuation in interest rates USD loanMitigate using control method ie. forward contracts, hedging etc.3.)Risk of add up shortage/delay collect to truck breakdownsMitigate using diversification ie. Have alternative options of transportation readily available4.)Risk of losing major customerMitigate using diversification ie. Try to ga in other customers in need of timber5.)Risk of losing timber licensesMitigate using control technique ie. Establish strong internal controls regarding the requirement to clear and replant and ensure to survey controls. 6.)Risk of non-compliance with national stock exchange requirements Mitigate using control technique ie. Establish strong internal controls regarding compliance requirements for stock exchange.7.)Risk of inventory shrinkage due to theft, damageMitigate using sharing/transferring technique ie. Purchase insurance for buildup of inventory8.)Risk of supply delay if sawmill equipment goes down, staff turnover/lack of delicate staff Mitigate using diversification technique ie. Have alternative options of production in the event either of these occur9.)Risk of delay/damage/ deep in thought(p) shipment to overseas marketMitigate using sharing/transferring technique ie. Purchase additional insurance that would cover this10.) Risk of timber market/supply what if something ha ppens to forest? Fire, bug infestation Mitigate using diversification ie. Find other supplies of timber11.) Risk of reputation environmental groups if CWTI doesnt live up to the clearing/replanting requirement Mitigate using control ie. Establish strong internal controls to ensure all clearing/replanting requirements are being fulfilled.12.) Risk of not meeting financial obligations due to delayed/infrequent receivables CWTI operates year round but majority of payment only gets received around December & January (based on 60/90 day terms) Mitigate using diversification ie. Find more new customers that require timber throughout the year to balance the hard currency flow.We can further discuss other mitigation methods should you please. I look forward to your feedback.