Organizational Risk Management (ANSWERED)

QUESTION

Choose a research topic from the chapter readings or from the list provided by your professor.
Research/find a minimum at least four (4), preferably five (5) or more, different peer-reviewed articles on your topic from the University of the Cumberlands Library online business database. The article(s) must be relevant and from a peer-reviewed source. While you may use relevant articles from any time frame, current/published within the last five (5) years are preferred. Using literature that is irrelevant or unrelated to the chosen topic will result in a point reduction.
Write a four (4) to five (5) page double spaced paper in APA format discussing the findings on your specific topic in your own words. Note – paper length does not include cover page, abstract, or references page(s).
Structure your paper as follows:
1. Cover page
2. Overview describing the importance of the research topic to current business and professional practice in your own words.
3. Purpose of Research should reflect the potential benefit of the topic to the current business and professional practice and the larger body of research.
4. Review of the Literature summarized in your own words. Note that this should not be a “copy and paste” of literature content, nor should this section be substantially filled with direct quotes from the article. A literature review is a summary of the major points and findings of each of the selected articles (with appropriate citations). Direct quotations should be used sparingly. Normally, this will be the largest section of your paper (this is not a requirement; just a general observation).
5. Practical Application of the literature. Describe how your findings from the relevant research literature can shape, inform, and improve current business and professional practice related to your chosen topic.
6. Conclusion in your own words
7. References formatted according to APA style requirements

ANSWER

Is Organizational Risk Management Broken? What Impact Does it Have on Supply Chain Management?

Overview

Risk management is used by organizations to identify strategies that can aid risk mitigation by looking for ways to reduce the likelihood of the risks’ consequences and manage the current risks. Organizational risks are contributed by internal and external forces, which require care when addressing and mitigating them as they may affect an organization’s corporate and professional reputation. For many years, organizations have considered risk mitigation a compliance exercise, thereby contributing to the perception that risk management may be dead. A lot of rules are usually drawn by the relevant management and force employees to comply with the rules. Although the rules make sense in most scenarios, they could potentially damage a company to an extent.

With many types of risk management in the vicinity, rule-based risk management may not diminish the Impact of an organizational disaster, considering how many financial organizations failed between the 2007-2008 credit crisis. Supply chain risk management as a category is often underestimated, considering how approaches to the imminent disruptions on the resilience and robustness of the supply chain are flawed. Therefore, it calls for an investigation into the impacts of risk management on the supply chain.

Purpose of Research

Risk management is important not only to the top management but also employees who can reduce the severity of a risk to the business by identifying it early. If an operation within the organization goes wrong, employees would have noted it, reported it, found a proper solution, and put an action plan in motion. In this regard, this research aims to determine if risk management is still integral to businesses and other organizations and how it impacts supply chain risk management.

Review of Literature

The corporate world is filled with trends like just-in-time, supply base reduction, shorter product life cycles, and outsourcing, which expose organizations to supply chain risks. Fan and Stevenson (2018) argue that most of the resultant risks may lead to financial and operational problems and potentially lead to the business discontinuity of the affected organization. Risk management to ensure that the supply chain is minimally interrupted or not at all directly relates to the attempts to overall supply chain risk management. However, there is no clear definition of supply chain management, at least from the conceptual perspective of various researchers. Still, risk-source implications, as analyzed by Fan and Stevenson (2018), determine that the competitive pressures arising from the probability drivers can increase or decrease the vulnerability of the supply chain.

When analyzing risk management with regard to supply chain management, it might as well make sense to approach supply chain risk management. Organizational risks are categorized based on their sources. According to de Oliveira et al. (2017), risks originating within the company are called operational risks, while external ones are rupture risks. Given the uncertain nature of the business climate and how complex the supply chains have become, breakdowns may be imminent. Therefore, risk management becomes a significant element in supply chain management. In general, risk management will minimize interruptions, reduce the Impact of disruptions, if any, and accelerate supply chain restoration to the normal state.

A wide variety of strategies for part of an organization’s attempt to identify, assess, mitigate, and monitor any unexpected risks to the supply chain. While risk management is a suitable application to supply chain management, Baryannis et al. (2019) regard it as an advanced strategy for ensuring seamless business operations through the creativity and steps it paves the way for and the resultant directions. Baryannis et al. (2019) explore how risk management has led to organizations adopting Artificial Intelligence (AI) for rapid decision-making on any part of the supply chain management. As an impact on supply chain management, risk management has enhanced a global perspective on ensuring that complex supply chains are not bombarded by blockages like an interruption to the less vertically integrated nature. Integrating AI to risk management will help further research and identify all risks associated with the supply chain and set out to find effective solutions. The methodologies and techniques AI has contributed to include mathematical relying network-based approaches to problems, agent-based modeling, machine learning, and big data (Baryannis et al. 2019).

In summary, risk management affects supply chain management through AI techniques that identify problems, provide solutions, and minimize interruptions to the supply chain. Moreover, risk management will reduce the Impact of disruptions, if any, and accelerate supply chain restoration to the normal state (Kumar et al., 2018). Nonetheless, organizations prioritizing growth and development will prioritize risk management as it is an essential part of the management process. Still, employees are likely to develop their professionalism when they are made aware of how important risk management is to their careers and the organization’s aspects, like the supply chain.

Practical Application of Literature

Based on the literature above, risk management forms a significant part of supply chain management. Unlike in the past when businesses had limited means to go global, the technological era has seen the business world become one global village where transactions are just minutes and hours instead of days. Therefore, effective monitoring and management of the supply chain become unavoidable, with aspects like risk management ranking higher on the list. Considering how risk management has helped businesses mind their operations and prevent or mitigate any danger to normal operations, it can be concluded that risk management is not broken but needs a little further polishing. Overall, risk management can ensure seamless supply chain management using technology, professional skills, and material resources.

In conclusion, risk management as it pertains to the supply chain has and will continue to gain momentum as it is now a capability in the supply chain, supports businesses, and is capable of reducing costs. Although risk management is depicted here as integral to supply chain management, it shouldn’t be blamed when an organizational process fails due to the effects of a certain risk. As Bak (2018) writes, supply chain risk is not new to business because business operations require a certain acceptance to some extent of risk in an organization. Given how expensive the cost of a crisis for a day can get for a business, it may force businesses to dive into the profits to mitigate the risk, hence lowering the overall profitability. Therefore, it is imperative to consider risk management as a gradual process, improving at every opportunity and not broken as the general assumption goes.

References

Bak, O. (2018). Supply Chain Risk Management Research Agenda: From A Literature Review to A Call for Future Research Directions. Business Process Management Journal. https://doi.org/10.1108/BPMJ-02-2017-0021

Baryannis, G., Validi, S., Dani, S., & Antoniou, G. (2019). Supply Chain Risk Management and Artificial Intelligence: State of the Art and Future Research Directions. International Journal of Production Research, 57(7), 2179-2202. https://doi.org/10.1080/00207543.2018.1530476

de Oliveira, U. R., Marins, F. A. S., Rocha, H. M., & Salomon, V. A. P. (2017). The ISO 31000 Standard in Supply Chain Risk Management. Journal of Cleaner Production, 151, 616-633. https://doi.org/10.1016/j.jclepro.2017.03.054

Fan, Y. & Stevenson, M. (2018). A Review of Supply Chain Risk Management: Definition, Theory, and Research Agenda. International Journal of Physical Distribution and Logistics Management,48(3), 205-230. https://doi.org/10.1108/IJPDLM-01-2017-0043

Kumar, V., Bak, O., Guo, R., Shaw, S. L., Colicchia, C., Garza-Reyes, J. A., & Kumari, A. (2018). An Empirical Analysis of Supply and Manufacturing Risk and Business Performance: A Chinese Manufacturing Supply Chain Perspective. Supply Chain Management: An International Journal. https://doi.org/10.1108/SCM-10-2017-0319