Introduction
Risk management is a vital aspect in any business environment that has to be keenly tackled for success in business or any organization. CEOs have to ensure that risks are well analyzed, calculated, quantitatively and qualitatively analyzed before there are taken. Since the risk, handling will entirely depend on their preparedness. It involves identification, assessment, and prioritization of the risks. International module is a concept that looks the concepts around financial management including risks in a universal environment. This paper will focus from a CEO Point of View in a public company. It will focus on the development and design of key strategies that would grow revenues while reducing company operations risks.
In this academic article, a public company is a major consideration where its risk management strategy will be discussed, including its global strategy. Public companies in the US traditionally get acclaim for their deliverance of rapidly growing earnings, which also go along with a rising risk factor with the prices also coming in hand.
Cummins is leading public company renown in the design of excellent heavy duty and performing engines for trucks, buses, and electronic parts for the same. This company has been involved in good sales and high growth in revenue collection that has also exposed it to a lot of risk factors which require imminent attention for sustainable development.
Company’s Existing Risk Management and International Strategies
Cummins over the years of operations has used several key points to ensure its risk management and international strategy well checkered. These strategies have been key in the way the company. Keeping specialties units up and running is a definitive objective of the company’s Risk Management bunch at Cummins, making their work outstanding without a discriminating way to staying with the economic.
Cummins' Risk Management group currently has taken a more extensive methodology to their work: not simply keeping tabs on how to keep a specific area operational, additionally how to keep various worldwide capacities working. This is the main jargon in their main international strategy management.
"Thought is to take a more all-encompassing methodology to hazard administration," says Brian Mcbroom, Cummins Director of Risk Management. There’s a need to stretch the center to worldwide procedures to determine we have the excess important to help in the worldwide commercial center. This is a strategy based methodology meant to produce the best.
Cummins accepts firmly that overseeing hazard successfully empowers an organization to put resources into building stronger groups and in decreasing its natural foot shaped impression. This means the Company cannot manage the cost of protracted deferrals, particularly in its most discriminating capacities.
Senior pioneers at the Company uphold a consistently upgraded rundown of the top dangers confronting Cummins. Much of the time, Six Sigma Black Belts, those workers most proficient at utilizing the business critical thinking device, are doled out to research potential dangers and conceivable counter activities.
Moreover, pioneers show a "Danger Map," "Hazard Dashboard," and a rundown of the "Main 10 Risks" and their comparing relief systems at each Board of Directors gathering. This keeps Cummins chiefs educated about potential deterrents to the Company's prosperity.
However, with all these strategies, Cummins has made serious shortcomings in the risk management process from identification to commissioning of risks through prioritization on the risk management.
New Strategies Based on Pre-existing Environment
Risk management in public corporations is not anything new from what happens in the business environment. Vibrancy and dynamics in profit propelled businesses are the only difference that has come up in the corporate world as opposed to the laxity seen in the government and public companies. Key strategies can be developed to deal with risk management and international strategies management in Cummins, which are basic, yet they meet the best requirements that ensure a rapid growth in earning while reducing the risk factor.
Risk management in its primary processes of identification, analysis or assessment and lastly prioritization is the basic thing company needs to focus on that helps their derailed and slow growing profits or revenue while ensuring the least risk allowable. This can be dealt with by considering basic pillars of the company as discussed by the points below.
A real errand for the Risk Management staff, notwithstanding, remains the arrangement of Business Continuity Plans for the most essential Cummins areas. These arrangements should incorporate definite data on emergency correspondences, operational recuperation and crisis readiness them in every twelve-months.
The staff strategy should also do a planned well over 100 arrangements. As Cummin’s management develops the necessity for extra plans increments, Distribution Business Unit, for instance, should look into the needs every bit of its locales and limbs – around 500 areas – to have coherence arranges by the end of the year.
Risk management should also include the natural calamities. These will include latest regular calamities running from the torrent in Japan and seismic tremors in Mexico to the tornadoes in Southern Indiana and Kentucky in the spring of 2012 underscore the direness of finishing the arrangements. To ensure Cummins' store network against comparative dangers, the Company's suppliers are additionally supposed to make and uphold their own particular progression plans.
Influence of Leverage and Risk on Financial Planning
A sustainable company has to be financially stable and this does not just happen, rather it is planned, and strategies pulled down to ensure financial risks are well managed since they may be a definition to the close of a public corporation that does not enjoy a lot of supports from the government.
Influence from Cummins comes from an advantage f economic growth that just requires a sustainability strategy that balances the economic output and the risk management aspects. This primarily is evidence from their financial report of 2012 and 2013 where the two years have been an economic growth time. To ensure even more beautiful and better results this company, therefore requires more detail. This will thus enable Cummins to extend it’s over revenues to other sectors in a diversification program.
Conclusion
Risk management and international strategies on financial planning are at the pivot of any company be it a public or private corporation in their journey of meeting their goals. It is, therefore, vital for any success to the strategic plan for risk management and financial plan against the risk factor present in a business environment.
References
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Kuman, S. K. (2008). Master of Financial Risk Planning.
Leslie, L. K. (2007). International management \strategy Development Vol(2). Chicago
Stulz, R. M. (2006). Rethinking risk management. Journal of applied corporate finance. NY: Wiley.
