Organization in Types of Risk

Organization in Types of Risk:

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.

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“