Organizational Risks & Mitigation Methods Essay Example for Free

Organizational Risks Mitigation Methods Essay As per our discussion last week I’ve prepared this memo that outlines the risks that CWTI faces and methods of mitigation for those risks. The goal of this exercise is to have a starting point for establishing a risk management process within CWTI. Below I’ve identified risks and provided suggested methods of mitigation for each. I’d like to point out that while most of these risks have more than one potential mitigation method, I chose to present the method I believe would be most successful for CWTI. 1.)Risk of fluctuation in foreign exchange rates –USD receivables Mitigate using control method ie. forward contracts, hedging etc. 2.)Risk of fluctuation in interest rates – USD loan Mitigate using control method ie. forward contracts, hedging etc. 3.)Risk of supply shortage/delay due to truck breakdowns Mitigate using diversification ie. Have alternative options of transportation readily available 4.)Risk of losing major customer Mitigate using diversification ie. Try to gain other customers in need of timber 5.)Risk of losing timber licenses Mitigate using control technique ie. Establish strong internal controls regarding the requirement to clear and replant and ensure to measure controls. 6.)Risk of non-compliance with national stock exchange requirements Mitigate using control technique ie. Establish strong internal controls regarding compliance requirements for stock exchange. 7.)Risk of inventory shrinkage due to theft, damage Mitigate using sharing/transferring technique ie. Purchase insurance for buildup of inventory 8.)Risk of supply delay if sawmill equipment goes down, staff turnover/lack of skilled staff Mitigate using diversification technique ie. Have alternative options of production in the event either of these occur 9.)Risk of delay/damage/lost shipment to overseas market Mitigate using sharing/transferring technique ie. Purchase additional insurance that would cover this 10.) Risk of timber market/supply – what if something happens to forest? Fire, bug infestation Mitigate using diversification ie. Find other supplies of timber 11.) Risk of reputation – environmental groups if CWTI doesn’t live up to the clearing/replanting requirement Mitigate using control ie. Establish strong internal controls to ensure all clearing/replanting requirements are being fulfilled. 12.) Risk of not meeting financial obligations due to delayed/infrequent receivables – CWTI operates year round but majority of payment only gets received around December January (based on 60/90 day terms) Mitigate using diversification ie. Find more new customers that require timber throughout the year to balance the cash flow. We can further discuss other mitigation methods should you please. I look forward to your feedback.