Many organizations across the world have invested in various innovation activities to meet the current trends. However, various risks are associated with different innovation activities. As a result, the companies have adopted risk management techniques to minimize or prevent the impact that can affect the business negatively. Therefore, risk management can be defined as the process of evaluating and forecasting risks to identify mechanisms that can curb their adverse effects. However, innovation can be defined as a creative idea that can be used to solve a problem. Therefore, according to the definitions, risk management and innovation are related and should be regarded as the same since some of the processes involved are similar.
Different Methods or Techniques Available for Risk Assessment
Table 1: Risk Assessment Techniques/Methods
|Cause and Effect Analysis.|| |
|Root Cause analysis|| |
|Risk maps|| |
Cause and Effect Analysis
Cause and effect analysis is a diagram-based technique that helps explore all the possible causes of a problem before finding the solution to the issue. The methods require intensive brainstorming and a bit of mind. Moreover, the technique helps identify the primary cause of a problem and deals with them at the primary level rather than focusing on the secondary causes.
Advantages and Disadvantages
Cause and effect risk analysis is capable of identifying the relationship between cause and effect. According to Petersen et al. (2019, p.4), the cause-effect relationship determines how one cause leads to another. Therefore, this implies that it can determine one cause of a problem and relates to other risks experienced in the company. Third, the method prioritizes risk causes. All risk varies in intensity as a result; it is essential to classify the risks in order of urgency and prioritize the ones that require urgent attention. Kiani et al. (2018, p.250) believe that prioritization of risks can be possible by using cause-and-effect analysis because of its ability to determine the primary cause of a risk.
Despite the advantages, the technique can present irrelevant causes because it assumes that all causes lead to effects. This, therefore, can limit the risk managers from dealing with the primary issue. The diagram illustrated can also be chaotic. As a result, it can lead to insufficient findings since it can be challenging to follow, especially with many processes involved. Finally, the technique is opinion-oriented rather than evidence-based. Opinions can, at times, be misleading since they are based on personal assumptions.
Benefits and Weaknesses
The main benefit of the technique is its promotion of understanding of the contributing factors. The tool helps in identifying the activities and actions that contribute to risk. Additionally, it is capable of developing comprehensive and superior risk controls. Finally, the tool is time-efficient compared to other methods. However, the tool requires a second risk management means to be effective because it is opinion-oriented. Additionally, it cannot predict risks, thus rendering it ineffective in organizations that deal with risk prediction.
Root Cause analysis
The technique helps to backtrack the risk, and it is most effective after the risk has occurred. In most cases, it is used to prevent similar risks in the future.
Advantages and Disadvantages
Root cause analysis identifies the underlying cause of the problem. Queirós et al. (2017, p. 372) demonstrate that the technique is designed to positively identify the leading cause of a risk. As a result, the executing process becomes effective when the leading cause of the problem is identified. The technique also helps the team members observe real issues, which prepares them for the challenge ahead. Nevertheless, the technique assumes that all the events and systems are linked. Peerally et al. (2017, p. 419) illustrate that risk can occur from a completely unrelated event. Additionally, it can only focus on one root cause while the organization can be experiencing numerous problems caused by various issues.
Benefits and Weaknesses
Root cause analysis facilitates the determination and identification of defects and their main causes. Additionally, it helps in the development of a logical approach to numerous problems. Moreover, it focuses on specific issues. However, the technique only enables the organizations to identify the negative problems experienced within the company. Hence, it limits the company from improving since the identification of positive areas provides an opportunity for continuous improvement.
A risk map is a visual representation of data that shows different specific risks that an organization can face. The objective of the tool is to enhance a business’s risk understanding and profile the risk accordingly. The risk map is also helpful in determining risks for organizations that have wide distribution geographically.
Advantages and Disadvantages
Risk maps help in understanding the risk environment in which the organization operates. Additionally, the technique prioritizes mitigation strategies. It provides an opportunity to allocate resources to urgent risks that require immediate attention. However, the method lacks objective data. The tool relies on qualitative data, and this makes it ineffective in determining resource allocation.
Benefits and Weakness
Risk maps are easy to use and apply by non-experts. The technique can be used with any individual to determine and analyze risks associated with the help of the visual representation. However, the method cannot determine how threats are interconnected. As a result, the risk managers become unable to decide on the extent of the impact of the risk presented.
The Relative Roles of Quantitative and Qualitative Risk Assessment
Roles of Quantitative Risk Assessment
Quantitative risk assessment (QRA) can be defined as a risk analysis system that uses quantitative data. QRA plays a significant role in estimating the overall risk a project can experience. It performs its function by assigning numerical estimates to the scheme, whereby software computes the information (Aerts et al. 2018). The results can be used to determine the likelihood of the project’s success (Loosemore et al. 2006). It also plays a significant role in allowing the probable estimate of the project by quantifying the possible outcomes.
Roles of Qualitative Risk Assessment
Qualitative risk assessment can be defined as a risk assessment tool that is anchored on non-numerical data. Qualitative risk assessment plays a role in analyzing risk by prioritizing the already identified risks in the organization by using a rating scale that is already predetermined. The risks are assigned scores based on their probability of occurrence (Aven 2016).Additionally, qualitative risk assessment uses a subjective approach by focusing on the likelihood of the individual risk that can be experienced if the prole occurs (Loosemore et al. 2006). In most cases, it is performed to determine the severity of the risk rather than the cause of the risk.
The Appropriate Risk Assessment Technique for Smithfield Hog Farm Inc.
Quantitative risk assessment is the most appropriate technique in analyzing risks in the Smithfield hog farm. Since Smithfield has four main segments, the approach will ensure that the overall risks are analyzed easily. Besides, it will ensure that more objective information is availed because of the extensive stakeolder consultation (Loosemore et al. 2006). Moreover, the technique considers both stakeholders and organizational commitment to risk management. This can give the company a wide range of risks that can be used to prevent uncertainties from taking place (Aerts et al. 2018). It also relies on accurate statistical information to provide actionable results.
|Organizational Culture||Implications Of Embedding the Effective Management of Risks|
According to The Institute of Risk Management (2012, p.7), “risk culture is a term describing the values, beliefs, knowledge, and understanding about risk shared by a group of people with a common purpose, in particular the employees of an organization or teams or groups within an organization.” However, communal culture illustrates the social interaction of individuals within an organization’s setup. It is anchored on shared interests and obligations but manifests in friendships. This culture is based on two aspects; sociability and solidarity. According to Goffee and Jones, sociability is the ability to interact sincerely and freely with the members of a particular community (Goffee and Jones 1996, p. 134). It presents itself naturally through friends who associate on equal terms through an organization that Hilson describes as a natural risk organization (Hillson 1997, p.38). However, solidarity is the capability to pursue common goals as a community without personal differences. Although it also comes naturally, it is based on common tasks.
Embedding communal culture within the day-to-day activities creates an enjoyable environment to work in, which prevents industrial disputes. Additionally, through the sociability aspect, the culture prevents cooperative kidnapping and selective training. It also prevents psychosocial stress such as bullying. However, it promtes corruption and non-compliance because it creates some comfort level.
Networked culture creates a sense of togetherness where employees perform tasks in groups. For instance, they go for lunch together and often visit their colleagues in their offices to check on their well-being. In addition, employees are celebrated for their achievements in life, such as birthdays and retirements. Moreover, decisions are predetermined in the groups before a meeting is held to deliberate on the issue (Goffee and Jones 1996, p. 137). Sometimes the culture makes the individuals act as family members as they can be invited to a colleague’s wedding. In short, the culture demonstrates high levels of sociability than solidarity.
Embedding networked culture within the day-to-day activities ensures that the staff members acquire the ability to collect and disseminate soft information (Hillson 2013, p. 5). Additionally, it prevents bullying and any form of psycosocial stress. However, the culture presents an opportunity for high staff turnover, unetiical practices , and corruption. Moreover, it promtes spread of pests and diseases and hinders privacy.
All engagements are business-oriented, and all individual interests align with those of the organization. The employees have a common enemy that they should defeat. Therefore, they can be determined by their capability to respond swiftly and aggressively to their supposed threat or opportunity. The senior managers make top decisions before it trickles to the junior staff (Goffee and Jones 1996, p. 140). The work environment is distinct from the social life, and it is mainly dominated by those who prioritize work over their private life. The culture never tolerates poor performance, and it lacks personal ties. In short, such environments are fair to those who meet their target while unfair to those who underperform.
Embedding mercenary culture within the day-to-day activities, therefore, reduces corruption, unethical practices, staff abstentism, and skill shortages. Naturally, most organizations would want to achieve the maximum productivity of their employees. However, this is only possible with the mercenary culture, which encourages work ethics. Nevertheless, the environment promotes stress, harassment and bullying of the employees.
Fragmented culture attracts few managers, and the employees often believe that they are working for themselves. Usually, the staff members identify themselves with their profession rather than the organization. They exhibit low sociability and solidarity culture such as participation in extracurricular activities because the employees view such as a waste of time (Goffee and Jones 1996, p. 142). Employees are secretive, and they never share any information with their colleagues, Every individual work close door in their offices or at home. It also has low levels of solidarity as employees can hardly agree on objectives, standards, and critical issues that need to be addressed.
Embedding fragmented culture within day-to-day activities can therefore prevent personal accidents and deaths. Since the culture is individualistic, it can ensure that the individual performance is enhanced since only the best are recruited. Additionally, the culture can ensure that innovation thrives, especially where personal innovation is encouraged rather than teamwork. However, the culture illustrates an employee disenggagemt environment. Also, it promotes falsification of documents.
How Far That Good Practice Exists Within a Company and Recommending Steps That Would Improve Practice in Company
Communal culture is highly witnessed in Smithfield Hog Farm. The organization values friendship, and the employees are often encouraged to befriend their colleagues. As a result, numerous activities are done in groups, and there is strong teamwork. Additionally, there are evident close social ties that extend outside the work environment. Moreover, since the company’s founders were immediate family members, the company has adopted the communal culture to create a home environment for all the employees. As a result, Smithfield Inc. is highly encouraging a collaborative culture in its operation. However, it is highly recommended that the institution should show a distinction between friendship and friendly relationships (Malagas et al. 2017). If there is a strong friendship relationship, the individual performance of the employees will deteriorate, which will lead to decreased productivity.
Also, networked culture is expressed in Smithfield hog farm. The company usually organizes parties to celebrate the achievements of their employees. For instance, birthday parties are typically held on the premises of the company. Retiring employees are also honored, and there is a strong bond between the employees. Usually, friends deliberate issues before discussing the matter in the boardroom, especially during the lunch hour breaks. Every December, the staff typically organize get-together parties that bring all the employees and the stakeholders of the community. In other words, Smithfield incorporation provides a community to the employees. However, it is recommended that the business be stern on the kind of interactions between staff members (Malagas et al. 2017). Some interactions can create politics, and this can create disunity and disharmony within the workforce. As a result, internal conflicts can arise; hence the company should be strict on interactions.
Mercenary culture is expressed in Giffgaff’s Telecommunication. Especially at the management level. The relationship at this level is purely business-oriented, and employees strive to respond to the opportunities and threats that face the company. All the decisions are made at the management level before being disseminated to other departments of the business. High performance in work output is highly recommended as poor performance is discouraged among all the employees. Promotions of employees reward good performance while those who perform dismally are retrained. As a result, employees are encouraged to contribute immensely to the success of the organization. Therefore, it is recommended for the business to create job security for the workers (Suherwan et al. 2021). This will ensure that the employees are motivated to work without the fear of being dismissed because of underperforming. Although the employees should demand favorable results, they should work in a suitable environment free from unnecessary pressure exerted by fear.
Finally, fragmented culture is remarkably exhibited in the London Stock exchange. This culture has been highly experienced in the company, especially during the Corona Virus outbreak. Most employees in the company have been working close doors in their offices, especially those in a managerial positions. Additionally, some employees were working at home and only physically local the company to collect important information. Moreover, it has created individual professionalism where staff members identify themselves with their profession instead of the company. However, the company can improve the culture by delegating specific duties to the staff members (Madison 2016). Being that there is limited interaction, the tasks can be jumbled. Therefore, defining roles and delegating particular roles to the employee’s maximum workforce production since the employees understand their duties if they work in line with their profession.
How Far the Process of Innovation Can Effectively Be Managed
Despite the numerous innovation initiatives initiated by the companies, developing a practical innovation remains a challenge to several organizations. According to Garud et al. (2016), the process of innovation can be defined as the steps needed to handle all activities that eventually lead to the introduction of something new. This definition shows that innovation can effectively be managed exclusively through shared vision, appropriate organizational structures, culture and climate, and critical individuals.
The process of innovation can effectively be managed through shared visions. According to Bessant and Tidd (2013, pp. 9), shared visions guide the organization towards a common goal by clarifying the organization’s direction. It instills commitment, energy, and purpose among organizational members. As a result, it fosters teamwork and acts as a constant motivator to the employees, and every member of the company feels the motivation. It promotes effective, innovative thinking, constant evolution, risk-taking, and embracing new ideas. This quality supports effective risk management by pushing a company forward, thus allowing it to grow in its innovative quest (Salter et al. 2014). Additionally, shared visions create a sense of ownership. As opposed to working for their company or bosses, the employees work towards a vision that they are part of. Garud et al. (2016) also assert that employees with a shared vision are constantly developing new inventions compared to institutions with inadequate resources. As a result, a shared vision can drive an organization towards effective management of risks.
Appropriate Organizational Structures
Organizational structures are also crucial in determining how far the process of innovation can effectively be managed. According to Broekaert et al. (2016), the organizational structures enable the effective use of the capabilities available. In other words, structures imply processes, infrastructure, and organizational structure. Therefore, competitive structures can become a reckoning force to a company by enabling the organization to conduct innovation effectively. For instance, organizations with less bureaucratic processes and procedures by organizational structures and the appropriate decision-making processes ensure that the innovative structures are effectuated (Bessant & Tidd, 2013). However, some essential creative ideas can never be implemented because of the institution’s poor structures. Moreover, suitable structures instill an innovative culture in the business, thus enabling many employees to venture into creative activities because they are sure that their ideas will be implemented by the management courtesy of suitable organizational structures.
Culture and Climate
The culture and climate of a business are necessary for determining how far a process of innovation can be effectively managed. Usually, the structures enable effective use of capabilities; however, culture and climate allow the institution to obtain the capabilities related to individuals (Stacho et al. 2016). If the organization has an innovative culture, it will likely attract the right individuals to bring creative ideas into the institution. A creative-oriented culture and climate promote positive behaviors that enhance innovation while at the same time discouraging undesired behaviors (Stacho et al. 2016). Culture can encourage an emphasis on the desire always to get better, thus promoting innovation desire. Additionally, it considers failure as part of the innovative process, thus making the staff members self-confident of their ideas since they are not mocked when their ideas fail. Therefore, culture plays a vital role in enhancing the practical innovation of an organization.
Key individuals such as leaders set the stage for essential innovation activities across the organizations as companies struggle to redefine themselves and their commodities to the current needs of society. Leaders can instill morale in other employees to inspire them to engage in innovative processes (Mumford et al. 2000). For instance, managers who promote the creative process act as role models to their junior employees who eventually participate in innovation. Shearmur and Doloreux (2016) also assert that effective innovation management is about making the best decisions after outweighing the present feasible choices. Therefore, key individuals enable the employees to understand the bigger picture of the organization by overshadowing the decisions. This, consequently, allows the innovators in the organization to promote ideas that are in line with the organization (Connelly et al. 200). Thus, key individuals are the general preparedness of the organization to brainstorm and implement the innovative ideas that innovators are suggesting. If the key individuals are objectives, then the innovation process is likely to meet the set goals.
The Models of Innovation That Are Most Applicable to Rolls Royce Holding plc
There are numerous models of innovation; however, each model is unique to every institution. Therefore, Smithfield hog farm also has different innovation models that are unique to its various departments. The most applicable innovation models in Rolls Royce are process and product models
According to Bessant and Tidd (2013, p. 24), the process model entails creating and delivering their products to the customers. Rolls Royce is one of the companies in the UK that entirely deals with the creation and delivery of their commodities; hence process model is highly recommended. The process model entails both incremental and radical innovation; this implies that the company can use incremental innovation techniques to continue what they are doing but improve their process (Salter et al. 2014). For instance, incremental innovation can be used to improve the communication processes within the company. For example, fixing the telephone communication services and improving factory operations offices by upgrading the already available equipment. However, radical innovation can introduce a new process to the company. For instance, the company can introduce mobile banking for customers to pay for the products purchased. Thus, mobile banking can act as an alternative to physical banking services.
The product model deals with the company’s offers. For example, although Rolls Royce is commonly known for car manufacturing, the company highly invests in jet and ships engines. The company can therefore use product models to improve its goods. The product model is effective because it also allows incremental and radical innovation (Bessant and Tidd 2013). For instance, as a company, there are certain features that they are identified with. For example, specific engines and motor vehicles models can retain their products’ brand but improve on the already existing engine models and design. Additionally, they can improve the performance of their products by making them more powerful. However, a radical innovation approach will ensure that new models of vehicles are created (Salter et al. 2014). For instance, Rolls-Royce was previously known to be using fossil fuels. However, a new car that uses renewable energy such as wind power and solar can be developed.
Components Of an Innovative Organization and Their Roles Within Effective Innovation
There are numerous components of an innovative organization, and there are distinct depending on the organizational culture. The components of an innovative organization determine if the organization will succeed in its quest for innovation or succumb. Tidd and Beasant (2013) describe some of the specific components of an innovative organization. Although the authors summarize the components into seven, the comments on effective teamwork, creative climate, and appropriate organizational structure are crucial components in an innovative organization.
Effective Team Working
The teamwork component is crucial in an innovative organization. According to Miao et al. (2018), the team players determine if the organization will succeed in its path of innovation or fail. If the administration offers an opportunity for result oriented teamwork, constant innovation will be coming into the organization from various staff members. Team playing ensures that every employee’s ideas are harmonized and integrated to produce tremendous innovative work (Bessant and Tidd 2013). Every team member plays an essential role in innovation as every individual is competent and capable of performing a given task. Team working can broadens an employee’s skills and knowledge. Usually, for an innovative idea to be compelling, unforeseen circumstances can pose threats to the project. However, working in a unified team can unearth some faults that could not be determined. Additionally, it offers an opportunity to scrutinize every process before it is put into practice due to the novelty and the complexity of the innovation process (Hillson 1997, p.37).
Effective team working also plays a vital role within practical innovation. Most innovative tasks involve unfamiliar technology and new processes; as a result, it becomes challenging to rely on past encounters to solve the new pressing problems. Therefore, it becomes difficult to develop ways to solve the new challenges. Moreover, innovative processes pose characters of ambiguity, future uncertainty, and constant changes. Therefore, to handle these factors, effective teamwork is required because of the team members’ unique skills.
A creative climate can be defined as a favorable organizational environment where innovation activities are promoted and allowed to thrive. It conveys the expectations where attitude and certain behaviors are acceptable. In other words, it facilitates the outcomes of creative processes. A creative climate can include personal freedom, management support and positive engagements, resources availability, enjoyment environment, clarity of the organizational mission, and creative encouragement (Bessant and Tidd 2013). Although creative innovation can be seen on different dimensions, personal freedom, support from the management and positive engagements, and motivation are crucial components of an innovative climate.
Personal freedom allows the employees to explore their full potential without being limited by the organizational rules and policies. Individual freedom is a fundamental reality of creative endeavors that encourages the employees to explore their skills and thus come with new ideas that could not have been realized had the employee been restrained. Although personal freedom may not lead to practical innovation, it leads to the realization that failure is part of the innovation process (Bessant and Tidd 2013). As a result, individual members are continuously motivated to engage in the brainstorming of new ideas. Additionally, it encourages people to take risks which helps them to build on an innovative idea. Therefore, organizations must allow personal freedom to people to promote innovation.
Support from management is also a component of a creative environment. Leadership can play a critical role in determining whether innovative ideas will thrive. The innovation process requires intensive resources, which can only be achieved if the top management commits to allocating these required sources such as time, finance, and facilities. Even though it is a silent component, management support can encourage innovation by communicating the organizational norms and offering experimentation. Additionally, motivation is critical to effective innovation (Bessant and Tidd 2013). Even though motivation is sometimes linked to rewards, it is an intrinsic feeling that makes an individual enjoy the work environment. Furthermore, motivation makes a person develop a sense of recognition by appreciating their efforts and contributions to the company.
Appropriate Organizational Structure
A clear strategic focus is critical for the success of an innovative organization. However, focus can only be achieved if a proper structure is available in the organization. A new creative idea should be aligned with the organization’s strategic intent. This is only possible if there is a well-articulated structure with objectives and ways of meeting the goals. According to Broekaert et al. (2016), the most successful organizations in the innovative field are those whose structure encourages the development of knowledge through research, experience, practicing interaction with various stakeholders. Moreover, organizations with flexible systems that allow interaction between employees without restriction are essential components in creating an innovative environment. An effective structure will make the employees aware of the steps to take after brainstorming an idea. Additionally, it can make it easy for the innovators to acquire new ideas by interacting with other employees and individuals who can be resourceful.
According to, Broekaert et al. (2016), bureaucratic structure in an organization can kill an idea and demoralize the employees. This is because the staff employees can b have an idea but luck platform to present their ideas as numerous procedures are required. Additionally, the resources can be challenging to access if a lot of bureaucracy is involved in the business structure. However, a good structure can avail resources that are only used in innovative activities and are available at all times (Bessant and Tidd 2013). This, therefore, indicates that the employees will also know where to take their ideas and places of seeking help if they need some. Furthermore, practical innovation should be easy to administer and should be completed after the inception stage. Good structure, therefore, ensures that the idea comes into actualization because of the necessary support and resources that are easily availed by the excellent structure.
Evaluating The Innovative Activity and Capacity of Smithfield Inc.
The component of effective team working has enabled Smithfield hog farm to venture into various innovative activities. The organization’s leadership encourages a collaborative team working to develop new ideas that can be used to solve different challenges that the institution is facing (Bessant and Tidd 2013). Besides, the teams make all the decisions before communicating their decision to the leaders. As a result, several ideas have been realized, and all of them emanate from units. For instance, the packaging of the finished products was initially done in polythene papers. However, after several authorities had raised issues regarding the effects of the material in packaging, a junior employee from the marketing department instigated an idea of packaging the products in biodegradable materials that have minimum impact on the environment. This mainly became a success because of the supportive leadership and freedom of employees witnessed in the company.
Additionally, the component of appropriate structure has also been of great help to the success of the Smithfield hog farm. The company is divided into different segments depending on the tasked being undertaken. Although the segments perform concurrently to provide quality, each department has a distinct innovation department. This structure limits confusion because each department has a clear goal that all innovation activities are geared towards. Additionally, it lowers bureaucracy in the company, which is usually a significant threat to the company (Bessant and Tidd 2013). Finally, an appropriate structure makes it easy for the junior employees to develop new ideas aligned to the goals of each company’s segment. As a result, the employees know where to present their ideas and seek resources if they require them from supportive leaders.
Moreover, Smithfield is an organization that highly embraced the component of a creative environment. The company regularly uses rewards to motivate the employees who develop new ideas regardless of whether the concept is compelling. As a result, the motivation technique has instilled confidence in the employees. It has also enabled the staff members to go beyond their limits because of the positive attitude created by the motivation provided by the company (Bessant and Tidd 2013). The motivations are usually offered in rewards such as increased payments and ranks, bonuses, and financial resources to implement the idea. Besides, the company usually makes a support team when an innovative idea is brought forward. Moreover, the team is usually led by the champion of the concept, which ensures that the idea is implemented according to the innovator’s vision. For instance, the idea of improving the breeds in the hog production segment was spearheaded by an employee who had initiated the idea in the organization.
Suggestions Of Improvements That Could Improve the Innovative Activity of Smithfield
The first suggestion that can be used to improve the innovative activity is the outsourcing of external innovators. Currently, the institution relies on internal staff members to produce new ideas. As a result, the process is often slow because the staff members are not obligated to engage in innovative activities. However, with the correct leadership and the current appropriate structure of the organization, Smithfield should hire external innovators that will exclusively be mandated to engage in innovative activities. This idea will supplement the already available creative ideas. Additionally, external innovators will ensure that innovative activities are conducted within a short period because there is often a timeframe that the institution wants the external innovators to adhere to.
The second suggestion that can improve the innovative activity of Smithfield is through the integration of the departments’ innovations. Currently, the institution has innovation departments for every segment. As a result, monitoring and improving the ideas becomes difficult because each department works independently according to the segment’s goals. Therefore, integrating the departments will ensure that the organization provides a broader scope of applicable ideas.
Throughout the course session, it was evident that effective management of risks can be achieved through practical teamwork and strong interpersonal skills. Teamwork is a professional skill that plays a critical role in promoting effective risk management. Although teamwork can be regarded as an organizational culture that employees can follow, it is a highly demanded professional skill from employees. It also plays a critical role in effective risk management by enhancing information sharing (Fraser & Simkins,2016). As a result, if any risk is detected, the individual is mandated to inform the other members to avert the threat or minimize the risk; thus promoting enhancing collective approach.
Interpersonal skills such as effective listening, negotiating, persuading and presentation, are also crucial in enhancing effective risk management. Interpersonal skills are generally the skills that enable an individual to present themselves. For instance, listening skills required in a professional environment empower individuals to listen to other employees without prejudice.. As a result, various mitigation measures can be obtained from other employees’ opinions, which can help manage the risk.
However, flexibility and adaptability play a role in enhancing effective risk management by enabling the employees and the business to change according to the new demands presented by the risks. Certain risks cannot be controlled; hence, they require people and businesses to adapt to the new environment. Therefore, developing an ability to the flexible and change swiftly to the new requirements will lower the impact of the risk, causing the business and the employees to survive.
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