PhD Finance - Risk Management Tools Assignment Example | Topics and Well Written Essays - 250 words

PhD Finance - Risk Management Tools - Assignment Examplee high investment in terms of knowledge, time and other resources, it is important that all organizations develop and implement these techniques to mitigate or guide the apparent risk of exposures that might be facing the organization.According to Youngberg, Risks in the organizations spate appear in numerous ways, and when the management has non put appropriate measures to reduce to reduce the impact of the risk, it can have dangerous and significant consequences on the performance of the firm (2011, p. 24). In many occasions, organizational risks appear with no or very little warning and thus organizations should always equip themselves with the appropriate risk management tools. A good example of this is the recent worldwide financial crisis which had negative impacts on the performance of many organizations that had not put appropriate risk management measures in place.Even though it is impossible for an organization t o exclusively eliminate risks, it is not impossible to manage and reduce the impact of risks (Munier, 2012, p. 75). Therefore it is the responsibility of the managers to develop processes and policies which can assist in identifying the various risks facing the organizations as well as analyzing the risks. Frame points out that in that location are various techniques which can help in the management of risks in the organizations (2003, p. 59). The risk management techniques whitethorn include, formation of specialized committees to deal with risk other than those from accounting or finance, employment of risk officers, foundation of a risk management enterprise, and giving particular attention to the microeconomic risks which do not unremarkably receive much attention (Calabro et al., 2011, p. 49). Some of the microeconomic risks could include environmental risks such as climate change, political risks such as elections and the general risks affecting the industry.Even though i nvesting in tools and techniques of risk management can seem as an expense to the organization, lack of