A strategic risk occurs when a firm accepts a risk with the aim of getting higher returns or minimizing losses. It is notable that these risks cannot be prevented using rule-based mechanisms. Therefore, the management is expected to have a system which will ensure that risk will not affect the firm but will be beneficial to the company (Kaplan and Mikes 51). Below is a strategic risk that I encountered.
I experienced my first hand strategic risk while working with a small Information Technology firm. The company most staff were I.T and computer science graduates. A new business unit which was dealing with Hospital Management Systems was not very profitable. The Human Resources Manager advised the Chief Executive Officer that it would be wise if the department was laid off. The decision was made hurriedly and the employees were compensated heavily. A month later, several hospitals called requesting a number of systems. Despite the compensation, the company had to re-hire the staff incurring a loss of time and finances. The risk was not managed well as the company had to re-hire.
Classmate 2
I like the way you presented your supervisor deficiency in some of the important factors which would create risk in the reorganization. For example, she failed to note that budget would have been affected due to additional training. I also find the way you relate your supervisor to Kaplan’s and Mikes 52 “overbearing and overconfident who wants to minimize conflict, delay, and challenges toher authority” well informed.
Work cited
Kaplan, R and A Mikes. "Managing Risk: A New Framework." Harvard Business Review June (2012): 48-60.
