Management must balance performance goals and associated risks. By having a plan, management can be better prepared for dealing with risks when they occur. However, not all strategies may be effective or proceed as planned when dealing with uncertainty.
(1) Considering your professional experience or a recent event, can you think of an example where an organization successfully or unsuccessfully incorporated risk management into their strategic plan?
(2) What went right?
(3) What went wrong?
One company that has successfully incorporated risk management into their strategic plan is Southwest Airlines. Airlines are strongly affected by fuel prices, so in early 2000s Southwest Airlines took out oil hedges for $51/barrel through 2009. These hedges helped Southwest Airlines overcome fuel price shocks as oil prices soared to over $90 a barrel mark. ...
Risk Management Planning is discussed very comprehensively in this explanation..