Risk Management Essay Example | Topics and Well Written Essays - 1500 words

Risk Management - Essay Example To do this, the airline embarks on several risk management processes. It is not surprising therefore that for all but the second year of operation Emirates Airlines have recorded profits and growth that always span above 20% (CNN Money, 2005). The airline has recorded a profit every year, except the second, and growth has never fallen below 20% a year. In its first 11 years, it doubled in size every 3.5 years, and has every four years since Current Risk Management Process In the view of Tatum (2011), Risk management is a logical process or approach that seeks to eliminate or at least minimize the level of risk associated with a business operation. Kolakowski (2011) posits that â€Å"risk management is concerned with identifying and measuring the risks faced by the firm.† This makes risk management more of a preventive venture than a curative one. In light of this, the Risk Management Magazine (2011) argues that, most airlines have their risk management undertaken by the intern al audit department. Risk management undertaken by companies varies in scope. Some of the commonest identified scopes of risk management include financial risk and field risk. With particular emphasis on the Emirates Airlines and other aviation services, special emphasis are laid on risk associated with staff and customer safety of customers and staff when talking about risk management. Commenting on a typically workable risk management model for airlines, the Risk Management Magazine (2006) outlines nine areas that airlines could look out for in their risk management exercises. These nines models are â€Å"station size, last audit date, last management change, prior audit report rating, compliance with submitting inventory reports, promptness of remitting funds, promptness of submitting sales reports, magnitude of unreported sales (passengers flown for which the ticket sale was not located), and magnitude of discrepancies with local disbursements† (Goepfert, 2006). Still wri ting on management process for airlines, the International Air Transport Association (2010) outlines areas that airlines may consider in their risk management efforts. According to the association, â€Å"Crew fatigue has typically been controlled by a simple set of prescriptive rules concerning flight time limitations (FTL) and flight duty limitations (FDL).† These model, when carefully followed by airlines guarantees financial returns as well as employee and customer safety. Such safety assured among customer also goes a long way to promote a continued business relations with the airline and invariable ensures profitability for the company. Risk Management Problems Like in every other human endeavor, undertaking a useful measure towards the growth of a company does not come easily. In an attempt to ensuring risk management, there certain challenges that the management of Emirates Airline encounters. First and foremost, there is the problem of defining potential risk. Brodzin ski (2006) notes that the definition to a risk too general. This is to say that in an organization such as an airline where there are certainly many managers in charge of the risk management business of the organization, coming to a consensus about what to include in the risk management plan of the organization always becomes the first and most challenging task. This is because what may seem to be a potential risk to manager ‘A’ may not seem a risk to manager ‘B’. It should however take the identification of a problem before any further action on