Risk Management

Risk Management

Introduction to the Company

General Motors Corporation was founded in 1902 and has produced nearly 450 million vehicles globally since their inception. The automobile giant has operations in nearly every country in the world. Up until the past decade, GM was enjoying rapidly growing sales and revenues. However, with the recent economic downturn, the challenge has been to capture and sustain their market share while adding to their bottom line. During the global economic crisis, management is left no choice but to make critical decisions that will enable their corporations to endure. Widespread change is necessary and was needed to all functions of GM's business, including management style, structure, wages, branding, marketing, and technology.

Risk factors and Tackle Plans

Risk management is a kind of management, i.e. for controlling or minimizing the involvement of risk. Risk management is the process to identify, assess and prioritized the risks, that how uncertainty affects on your objectives and goals and how a firm can monitor, minimize and control these probabilities of events. There are a number of risks that involve in a business, and every market or business has risk in order to tackle with them an effective manager is required. To explain the risk management I would like to choose the example of non-profit organization and their risk management.

Political Risk

Political risk has never been high on the deal agendas of boards and management. Usually, their decisions are taken on the basis of market fundamentals, with political risk something to be managed, but not significant enough to alter boardroom decisions. Whether it is a fear of loss of local control brought on by globalization or a more temporary reaction to turbulent economic times, increasing numbers of transactions have faltered as a result of inadequate assessment of political risk. Executive management and boards are starting to realize that assessing political risks needs to begin early in the decision-making process, and follow strict rules of engagement.

Risk management decisions are ultimately political decisions. Formally, the U.S. government—the state and local governments pass laws—and their departments use rules and regulations to manage risk. Government leaders issue executive orders to make decisions when laws and rules are not in place. The courts are drawn into disagreements about risk management decisions.

Strategic risks

Many changes were needed to take place within the GM organization that would eliminate some of the brands that were sacrificing in quality. The ability of a firm to make a strategic decision in order to respond to the forces that are a source of risk. These forces also impact the competitiveness of a firm. Porter defines them as: threat of new entrants in the industry, threat of substitute goods and services, intensity of competition within the industry, bargaining power of suppliers, and bargaining power of consumers.

This is caused by the assets and financial capital that aid within the day-to-day business operations. The breakdown of machineries, provide and demand with the sources and products, shortfall with the goods and solutions, lack of perfect logistic and inventory will result ...