In today’s world, organizations face increasingly demanding competitive challenges, whether due to the continuous globalization of markets, the incredible technological evolution, the need to comply with legal requirements, or the need to respect the opinion of their various stakeholders. Today, organizations are witnessing a growing level of complexity in the management of their systems, operations, and projects, which are behind the achievement of their goals and strategies, towards success and sustainability.
In practice, we live in a business reality, affected daily by risks of the most diverse natures, ranging from social, economic, political, and legal aspects, to risks related to technologies, strategy, reputation, planning, efficiency of operations, optimization of costs, human resources, promotion of the business, among many others. Each of these risks, individually and as a whole, directly affects the goals of organizations, their performance, and their activities, leading to the methods behind management taking a prominent place, creating a clear need for organizations to adapt to these new realities. Organizations need to stop being and having isolated islands, they need to manage their business as a whole, which is affected by a whole set of events that condition the achievement of their goals and the realization of their strategies.
In this context, Risk Management aims to position itself as the foundation of organizations, providing integrated support to the whole that represents the business, goals, and strategies, while the genesis of its systems, operations, and projects, which are affected by risks of the most diverse natures.
Consider the example of a company that has the objective of internationalizing its business, focusing its strategy on the quality of its product and strengthening its production. Such an objective, right from the start, will bring with it the need to expand production and commercial capacities. But will the challenge of this project end there? Objectively, no.
An internationalization project carries risks that affect the daily operations of the business. On the one hand, the company must be aware of the market risks that could condition its project. Here, it will be necessary to understand, for example, the social risks (what is the cultural and demographic profile of consumers, which condition the adoption of the product), the economic risks (what competition exists, what is the purchasing power of the market), the technological risks (if our product will require any additional technology to be used, which is not available), or the political and legal risks (in terms of trends in legislation and market stability, so that the company can develop its business stably).
On the other hand, internally, the company will incur risks of management and layout design (in order to reconcile the introduction of a production reinforcement or new product features), risks of planning and budgeting (what financial effort will the project require and what should be the pricing policy), risks of supply (needs for external supply reinforcements, which avoid service interruptions, or that may even contribute to greater negotiating power), or technological risks (new production needs, or updating of current means).
All of these factors and many others could and should effectively affect an internationalization project, affecting the main objective of an organization in a project of this kind: to sell more and achieve more results. Here, risk management, acting on our systems and operations, will support management in defining an action plan, where in addition to contributing to the continuous improvement of the business, it prevents the impact of events that could condition its objectives, protecting its achievement in advance. From this action plan, additionally, risk management will continue in a process of monitoring risks, systems, operations, and performance, adding a key success factor: the ability to adapt to the volatility of the business environment and continuous improvement.
Risk Management does not pretend to present itself as a magic wand for the success of organizations, either because risk is never zero or because the business world is constantly evolving, or because of its own limitations of effectiveness when it is implemented. However, it is clear the added value that this tool provides to organizations, either in protection against events that condition their objectives, or in a more mature phase, in the enhancement of the effective results of the business.