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Risk and Recovery in Organizations

Paper Type: Free Assignment Study Level: University / Undergraduate
Wordcount: 2085 words Published: 2nd Nov 2020

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In any organization, the risk is the primary cause of uncertainty. So companies concentrate more on identifying and managing the risk even before they impact the business. Internal and External sources may be responsible for risk. The external threats are those that are not directly under the control of the management. these include political, economic, natural, legal, exchange rate risk and so on. Whilst the internal risk is that which has a direct impact on the organization. These include credit, strategy, compliance, quality risk and so on.


Risk management is the process of identifying, analyzing, evaluating and controlling the threats which cause a severe impact on the business venture.

Identification of Risk

When the risk is identified by the stakeholders, it is documented in detail. Afterward, potential risk management and mitigation processes are carried out. This should be identified in the early stage of the project and it should be an ongoing process until the end of the project.

Analyzing the risk

The threats identified are rated on the probability of occurrence and can be estimated based on their impact on financial and other resources

Evaluate the risk

Here, the tolerance of the risk is determined(i.e) whether it is an acceptable or unacceptable risk. Acceptable risk is a type of risk that a business can tolerate whereas unacceptable risk is a type of risk that a company has significant losses which cannot be tolerated.

Control and Monitoring 

The risk may be dealt with in several ways. It can be avoided, reduced, shared or retained. It is again monitored to ensure the effectiveness of the risk plan which is executed. 


The recovery plan is meant to shorten the recovery time and reduce losses when a disaster affects the business. It includes:

                                      1.Strategies for the fastest recovery of the business activities

                                      2.Description of the key resources

                                      3.Equipment and Personnel requirement

                                     4.Goals of the recovery time


In 2013, a fire broke out at an office building in Mount Pleasant, South Carolina. Cantey Technology, an It company with over 200 clients hosting servers, was based at the offices. All infrastructures of Cantey has been destroyed. Cantey has already moved its customer servers into a remote data center as part of its business continuity plan where continuous backups have been stocked. Although Cantey employees had to move to a temporary office, the service never interrupted his customers.

This helps Cantey to incorporate a wider business continuity strategy and shift servers off-site for its clients and he avoided disaster in that way.


1.National Research Council.(2005). "The Owner's Role in Risk Management", Washington, DC, The National Academics Press.

2.Rogers, Helen & Srivastava, Mohit & Pawar, Kulwant & Shah, Janat. (2015). "Supply chain risk management in India – practical insights", International Journal of Logistics Research and Applications: 1-22

3.Cucchiella, F. and Gastaldi, M.(2006). "Risk management in supply chain: a real option approach", Journal of Manufacturing Technology Management, 17(6): 700 - 720

4.Chinnadurai, J., Venugopal, V.,P, K. and R, P.(2016), "Influence of occupational heat stress on labour productivity - a case study from Chennai, India", International Journal of Productivity and Performance Management, Vol.65 No.2, pp. 245-255

5.Gupta, P.(2011), "Risk management in Indian companies: EWRM concerns and issues", Journal of Risk Finance, Vol. 12 No.2, pp. 121 - 139


A risk profile is an analysis of the ability of a person to take risks and the risk to which an organization is exposed.


Risk mapping is a pictorial representation which summarizes all risks that could affect the company where each risk is placed in a two-dimensional graph plotted as X-Axis and Y-Axis :   

                                                      *Likelihood - how often the risk occurs

                                                      *Severity - how much impact it creates while happening

The purpose of a risk map is to define, measure and explain the risks that may affect an organization's activity.


In the case of the supply chain, there is no specific way of representing a map. The most popular mapping technique is,

                                                                    *Links - Flow of supply chain

                                                                    *Nodes - Entities within the supply chain


VSM or Value Stream Mapping is a tool developed by Toyota. John J. Marren, director, CSL Ltd used this technique to identify and manage the risk.

When acquisitions were taken up by CSL Ltd, they found many reductant skills. To increase the efficiencies, the company adopted a center of excellence model, focusing only on production. This has increased production, however, they found an interruption in the supply chain. So they mapped the supply chain with the main focus identifying the key points and threats associated with it. This checked the products from raw material till the finished product. Finally, this powerful tool identifies supply chain weakness and areas demanding risk reduction


1.LAMBERT, D.M., COOPER, M.C. and PAGH, J.D., (1998). Supply Chain Management: Implementation issues and research opportunities. International Journal of Logistics Management, 9(2), pp. 1.

2.SCHLEGEL, G.L. and TRENT, R.J.,(2015). Supply Chain Risk Management: an emerging discipline. Boca Raton: CRC Press.

3.OLSON, D.(2012)Supply Chain Risk Management Tools for Analysis. New York Business Expert Press.

4.ZOLKOS, R.,(2012). Supply chain mapping yields vital risk management tool.Business Insurance, 46(16), pp. 14 


Resilient can be called as the object's elasticity level, which rebounds back to normality(1). 

Organizational Resilience(OR) is described as developing a positive change under difficult circumstances to make the organization recover and become stronger and resourceful(2).

BSI has extracted the 16 elements of OR that was categorized into four main streams





These elements of OR should be evaluated on an ongoing basis


Resilient Supply Chain(RSC) can be termed as the ability to resist and recover from any disruption in a supply chain 

In order to avoid and recover from disorders quickly, RSC balances costs and risks. The four main pillars of the framework are

                                                                      *VISIBILITY - to screen and track the events

                                                                      *FLEXIBILITY - to adjust to the interruptions easily

                                                                      *COLLABORATION - to develop a trustworthy relationship with the suppliers

                                                                      *CONTROL - to implement policies and damage avoidance mechanism



The launch of Tide Pod, a revolutionary detergent, intended to increase the demand, was introduced by Procter & Gamble in August 2011. Sadly, due to production challenges, P&G has to postpone its effective market entry until 2012. In the meantime, P&G's competitors had the opportunity to seize the entire market share. Nevertheless, P&G was able to rectify and rebound from its Supply Chain issues and achieved $50 million in sales without any offers and promotions. This happened because of the brand equity and customer loyalty


Wicher, Pavel & Lenort, Radim. (2012) "The ways of creating resilient supply chains", Congress Proceedings - CLC 2012: Carpathian Logistics Congress, pg: 688-694

‌Making Excellence a Habit.TM Organizational Resilience Index (n.d)[online] Available at : . https://www.bsigroup.com/LocalFiles/zh-tw/organizational-resilience/Index-report-for-web.pdf [Accessed 25 Nov 2019]

Deloitte Ireland.(2015). Improving Supply Chain Resilience -Can you Afford Not to?/Deloitte Ireland/ Deloitte private [online] Available at :  https://www2.deloitte.com/ie/en/pages/deloitte-private/articles/improving-supply-chain-resilience.html  [Accessed 25 Nov 2019]

Melnyk, S.A.(2015). Understanding Supply Chain Resilience - Supply Chain 24/7. [online]Supply Chian 247.com. Available at : http://www.supplychain247.com/article/understanding_supply_chain_resilience/

http://www.supplychain247.com/article/understanding_supply_chain_resilience/  [Accessed 25 Nov 2019]


Customer value can be seen from two perspectives i.e Customer and Business. The client will only buy from the company if the company offers something the customer needs and only if it makes the order will the customer accept something (Ahmed, 2018).

Consumer value is a perceived value of a product or service against the possible alternatives to the consumer. This means whether the consumer thinks he/she has earned benefits and services in return for what has been paid(Kothari,2019)


TCO is the complete amount of the cost involved in the acquisition of an asset plus its lifetime operating costs(Pearson,2019)

TCO is a metric to show a clear picture of how to make a wise financial decisions more intelligently. Instead of only looking at an item's purchase price, TCO calculates the total cost, from purchase to shipment including expected expenses, such as maintenance, repairs, and insurance, incurred during the lifespan of the product(F.John Reh,2019)


Belron International's Carglass is a leading after-sale glass repair and replacement specialists began its supply chain analysis to help out with their and quality and delivery performance problems which incurred some additional costs unknowingly. So TCO was introduced in purchase making decision. Carglass get control of the issues and can now concentrate on the cost savings hidden under the deal, giving both Carglass and suppliers incentives to develop their business.


1. Ahmed, A. (2018). What Is Consumer Value?. [online] Bizfluent. Available at: https://bizfluent.com/about-5522239-consumer-value.html [Accessed 9 Dec. 2019]

2. Hurkens, K., Valk, W. and Wynstra, F.(2006). Total Cost of Ownership in the Service Sector: A Case Study. The Journal of Supply Chain Management,42(1), pp.27 - 37

3.. Kothari, A. (2019). Customer Value: What it Means and How to Create It [5+ Ideas] - Tallyfy. [online] Tallyfy. Available at: https://tallyfy.com/customer-value/ [Accessed 9 Dec. 2019]

4.. Pearson, S. (2019). Definition - What is Total Cost of Ownership? - Tallyfy. [online] Tallyfy. Available at: https://tallyfy.com/total-cost-of-ownership/ [Accessed 9 Dec. 2019].

5.. Reh, F. (2019). Understanding the Concept of Total Cost of Ownership. [online] The Balance Careers. Available at: https://www.thebalancecareers.com/total-cost-of-ownership-tco-2276009 [Accessed 9 Dec. 2019].


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