By: Brett Tarr, eMag Solutions

Organizational risks are threats, negative effects or problems that can occur as a result of an event or an action within a company. During turbulent economic times, organizations need to be especially vigilant to minimize potential risks that could ultimately affect the bottom line or shareholder ROI.

Organizational risk can include many types of risk (e.g., investment risk, budgetary risk, program management risk, legal liability risk, safety risk, inventory risk, and the risk from information systems).

Managing organizational risk is not an exact science. It brings together the best collective judgments of the individuals responsible for the strategic planning and day-to-day operations of organizations to provide adequate security and risk mitigation.

There are two main categories of risk: internal and external. Internal risks can result either from processes or from the management of information, while external risks result from changes in the environment of the company (political, economic, technological, sociological changes) that can exercise a negative influence on the objectives and the strategies of the company.

Managing Organizational Risk

Managing organizational risk in tough times means taking a holistic view. This requires an integrated cross-departmental framework of controls, checks and balances. Key examples of issues facing organizations that impact corporate risk include fraud, new technology implementation, and the advent of global markets.

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