Organization in Types of Risk:

Introduction to Contents:

Risk refers to sudden unplanned events which cause major disturbances in the organization and trigger a feeling of fear and threat amongst the employees.

Organization in Types of Risk; Following are the types of Risk:

  1. Natural Risk
    • Disturbances in the environment and nature lead to natural Risk.
    • Such events are generally beyond the control of human beings.
    • Tornadoes, Earthquakes, Hurricanes, Landslides, Tsunamis, Flood, Drought all result in natural disaster.
  2. Technological Risk
    • Technological Risk arises as a result of the failure in technology. Problems in the overall systems lead to technological Risk.
    • Breakdown of machine, corrupted software and so on give rise to technological Risk.
  3. Confrontation Risk
    • Confrontation crises arise when employees fight amongst themselves. Individuals do not agree with each other and eventually depend on non-productive acts like boycotts, strikes for indefinite periods and so on.
    • In such a type of Risk, employees disobey superiors; give them ultimatums and force them to accept their demands.
    • Internal disputes, ineffective communication and lack of coordination give rise to confrontation Risk.
  4. Risk of Malevolence
    • Organizations face Risk of malevolence when some notorious employees take the help of criminal activities and extreme steps to fulfill their demands.
    • Acts like kidnapping company’s officials, false rumors all lead to Risk of malevolence.
  5. Risk of Organizational Misdeeds
    • Crises of organizational misdeeds arise when management takes certain decisions knowing the harmful consequences of the same towards the stakeholders and external parties.
    • In such cases, superiors ignore the after effects of strategies and implement the same for quick results.
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Organization in Types of Risk; A risk of organizational misdeeds can be further classified into following three types:

  • Risk of Skewed Management Values
    • A risk of Skewed Management Values arises when management supports short-term growth and ignores broader issues.
  1. Risk of Deception
    • Organizations face Risk of deception when management purposely tampers data and information.
    • Management makes fake promises and wrong commitments to the customers. Communicating wrong information about the organization and products lead to Risk of deception.
  2. Risk of Management Misconduct
    • Organizations face Risk of management misconduct when management indulges in deliberate acts of illegality like accepting bribes, passing on confidential information and so on.
  3. Risk due to Workplace Violence
    • Such a type of Risk arises when employees are indulged in violent acts such as beating employees, superiors in the office premises itself.
  4. Risk Due to Rumor’s
    • Spreading false rumors about the organization and brand lead to Risk. Employees must not spread anything which would tarnish the image of their organization.
  5. Bankruptcy
    • A Risk also arises when organizations fail to pay its creditors and other parties.
    • Lack of fund leads to Risk.
  6. Risk Due to Natural Factors
    • Disturbances in environment and nature such as hurricanes, volcanoes, storms, flood; droughts, earthquakes etc. result in Risk.
  7. Sudden Risk
    • As the name suggests, such situations arise all of a sudden and on an extremely short notice.
    • Managers do not get warning signals and such a situation is in most cases beyond any one’s control.
  8. Smoldering Risk
    • Neglecting minor issues, in the beginning, lead to smoldering Risk later.
    • Managers often can foresee Risk but they should not ignore the same and wait for someone else to take action.
    • Warn the employees immediately to avoid such a situation.

Note: “Reading simple notes Organization in Types of Risk, also know about Risk Management and Risk Management Model

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