Describe business risks facing U.S. organizations then determine and explain whether these risks might differ in a global environment

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4. Describe business risks facing U.S. organizations then determine and explain whether these risks might differ in a global environment
For U.S organizations the strategy adopted to manage the risks varies according to the risk-taking preferences or risk appetite of the company. Risk management experts often summarize the options as treat, terminate, transfer or take (or tolerate): the 4 Ts. Treating a risk means taking direct action to reduce either its potential impact or its likelihood of occurrence. In many instances the treatment is internal control but, in the China example, one means of mitigating the customer acceptance risk might be via a marketing campaign - not something most people would think of immediately as a 'control.' To terminate a risk is to walk away from it. For U.S organizations with a low risk appetite, faced with the risks of sourcing products from China, may decide simply to source products elsewhere.

Risks may also be transferred to others, either by insurance or through contracts, often with outsourced service suppliers. For U.S organizations it should be noticed that the primary risk often remains with its original owner and only the supplier manages the detailed hassle. If the right goods don't reach a retail store on time and in good condition there may be a penalty clause that can be invoked against the logistics supplier but it is still the retailer who loses sales and customer good will. Finally, there are some risks that go with the territory. You do what you can but, in the end, you have to accept, tolerate or take them. For U.S organizations it is clear that companies with a higher risk appetite, who also have good risk management processes, can boldly go where others fear to tread - and reap the rewards of higher profits.

With the China sourcing the integrity of supplier can be mitigated with a letter of credit or guaranteed insurance contract which guarantees payment upon satisfactory inspection of the goods at the docks (which also covers quality of work and delivery times). Government issues may be something that needs to be address with the State department.

For U.S organizations is part of the risk process, they need to identify events that may occur ...