Sometimes, bad things happen in business and managers have to reassure customers
ID: 2731961 • Letter: S
Question
Sometimes, bad things happen in business and managers have to reassure customers/clients that the business is deserving of their trust and loyalty. For example, companies sometimes have to inform us that our personal information may have been stolen. Other difficult situations for companies include recalls, natural disasters, and scandals. Please describe a difficult situation faced by a business. Explain how the business handled it, and explain whether the technique(s) used by the business were successful in regaining public trust and repairing the company's reputation.Explanation / Answer
Future is uncertain and full of risk. Risk is the chance that an undesirable event will occur, but risk is also opportunity. That's where we come in.
Professionals in finding ways to manage risk. It takes a combination of strong analytical skills, business knowledge, and understanding of human behavior to manage today's complex risks facing our society.
Our management team of companies that deal with risk. In a fast-changing world, with emerging risks and the need for more creative ways to tackle them, there are constant opportunities for personal and professional growth.
Analysis backbone of our society's financial security programs. We are the brains behind the financial safeguards in our personal lives, so we can go about our day without worrying too much about what the future may hold for us.
Techniques of business handling
Business risk is the possibility by the loss, people, organizations, and society usually try to avoid risk, or, if not avoidable, then to manage it somehow. There are 5 major methods of handling risk:
1. Avoidance
2. Loss control
3. Retention
4. Noninsurance transfers
5. Insurance.
Avoidance is the elimination of risk. You can avoid the risk of a loss in the stock market by not buying or shorting stocks. Many manufacturers avoid legal risk by not manufacturing particular products.
Loss can remove either be effected through loss prevention, which is reducing the probability of risk, or loss reduction, which minimizes the loss.
Loss prevention requires identifying the factors that increase the likelihood of a loss, then either eliminating the factors or minimizing their effect.
More businesses actively control losses because it is a cost-effective way to prevent losses from accidents and damage to property, and generally becomes more effective the longer the business has been operating, since it can learn from its mistakes.
Retention risk, is handling the unavoidable or unavoided risk internally, either because insurance cannot be purchased or it is too expensive for the risk, or because it is much more cost-effective to handle the risk internally. Usually, retained risks occur with greater frequency, but have a lower severity
Passive retention risk is retaining risk because the risk is unknown or because the risk taker either does not know the risk or considers it a lesser risk than it actually is. Risk can also be managed by noninsurance transfers of risk. The 3 major forms of noninsurance risk transfer is by contract, hedging, and, for business risks, by incorporating. A common way to transfer risk by contract is by purchasing the warranty extension that many retailers sell for the items that they sell. The warranty itself transfers the risk of manufacturing defects from the buyer to the manufacturer. Transfers of risk through contract is often accomplished or prevented by a hold-harmless clause, which may limit liability for the party to which the clause applies.
Insurance of businesses and other organizations can use to transfer pure risks, by paying a premium to an insurance company in exchange for a payment of a possible large loss. By using the law of large numbers, an insurance company can estimate fairly reliably the amount of loss for a given number of customers within a specific time. An insurance company can pay for losses because it pools and invests the premiums of many subscribers to pay the few who will have significant losses. Not every pure risk is insurable by private insurance companies. Events which are unpredictable and that could cause extensive damage, such as earthquakes, are not insured by private insurers.
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