Strategic planning risk

From a point of view of Strategic Planning, Risk Management concerns framing strategies, which helps a firm to survive and grow over a long period of time. When the environment is unfavorable, the firm will concentrate on survival and when it is favorable, it will attempt to exploit new growth opportunities. The ability of a company to adjust to the changing environment will depends on the ability of its higher hierarchy to observe and understand what is happening in the market and prepare business plans accordingly. A key function of strategic panning is to ensure that major discontinuities in the industry are anticipated and dealt with in a proactive way.

Strategic planning in uncertain situations is linked with various risks. If the existing uncertainty is not properly taken into consideration, the firm might end up facing threats. At the same time, it may not be in a position to bear more risky opportunities with the potential to yield excellent returns. However, the ultimate goal of strategic planning should be not be to sketch out a course of action as to change the strategic models of the company. Strategic planning in uncertain situations is connected with various risks. If the accessible uncertainty is not properly taken into consideration, the firm might end up facing threats it is ill equipped to deal with. At the same time, it may not develop more risky opportunities with the potential to yield excellent returns. Many companies take strategic decisions relying totally on their gut instincts during times of uncertainty. This is obviously a wrong thing to do. Intuition has to be backed with some numbers for strategic planning to be

Effective.

Many companies take strategic decisions relying totally on their capacity, during the times of uncertainty. If you adopt a strategic plan, it will alert you about the risks and threats to your company in a systematic, structural manner. It also guides how to deal with those factors. Different organizations adopt different risk mitigating strategies to evaluate and control the insecurities of organization faces. Risk management is closely linked with performance management which organization performance. Risk management also enhances the transparency towards stakeholder's agreement and corporate governance regulations.

In the above backdrop, Strategic risk management exposes all business risks in a structured and proactive manner by highlighting the ability of your company to control those risks. As per the statement of Governor Kroszner at the National Conference on the Securities Industry strategic risk management framework is." an effective overall corporate strategy combines a set of activities a firm plans to undertake with an adequate assessment of the risks included in those activities.

Unfortunately, many firms have forgotten the second part of that definition. In other words, there can be no real strategic management in financial services without risk management, hence my use of the term "strategic risk management." Risk management needs to be interwoven into all aspects of the firm's business and should be part of the calculus for all decision-making. Planning of an effective strategic risk management framework involves examine of both internal and external environment.

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