Running a business is often a dangerous task, with many inherent risks. Some of these potential risks can lower the business reputation and destroy the entire business, while others can result in serious damages that can be time consuming and costly to repair. However, despite the risks associated with doing business, risk management officers and CEOs – regardless of the size of a business – can prepare and adequately to respond to unlikely instances. While there are many risks in business, the current essay identifies increasing competition, the security of customers and personal information, and employee theft as the risk management issues I would confront in a retail organization.
In particular, with the increasing trend of globalization, along with government incentives aimed at promoting business, the risk of increased competition cannot be disputed. Even though a retail business might be profitable at the moment, there are high chances of new entrants joining the market, increasing competition, and lowering the profitability of the entity (KPMG 2). To respond to this risk, the retail business should continuously innovate so as to drive down costs and improve the customer experience. Other strategies include product differentiation, increased marketing and advertisement, expanding to new markets and product diversification, and establishing good relations with employees so as to avoid loss of in-house talent.
Besides, the risk of technology failure is increasing along with the emergence of the virtual world. With technology failure, the security of customers’ personal information as well as business information cannot be guaranteed. This is worrying, especially considering that a business’ computer systems and network contains customer data, financial information, employee data, and in some cases medical information (KPMG 3). As a retail business manager, I would confront the risk of technology failure through installing back-up systems, complying with computer security regulations, protecting business networks by installing firewalls, protecting communication with customers over the Internet through encryption, and securing communication channels via VPNs and SSL.
Finally, employee theft is a pervasive issue affecting retail businesses currently and a major cause of business failure and losses (Alstete 834). Even though theft by individual employees might appear minor, the total amounts are quite significant and hence call for effective risk management. As a risk manager, I would confront the risk of theft by employees through carefully screening of job applicants before hiring them, instituting computer security measures such as CCTVs and password protections, efficient internal controls to safeguard business property, along with purchasing insurance against losses (Alstete 836).
Works Cited
Alstete, Jeffrey. "Inside Advice on Educating Managers for Preventing Employee Theft." International Journal of Retail & Distribution Management, vol. 34, no. 11, 2006, pp. 833-844.
KPMG. “Top Risks in Retail 2017.” KPMG, 23 Feb. 2017, https://assets.kpmg.com/content/dam/kpmg/be/pdf/Markets/top-risks-in-retail-2017.pdf. Accessed 14 Sept. 2018.
