What Is Risk Management: A Strategic Business Management View

Risk management is one of those odd ducks where the term can be used to mean many different things. To a bank, risk management is used to refer to managing credit and determining how much exposure exists on loans. To an insurance agent, risk management refers to determining how much insurance to buy. On the other hand, to their employer, the insurance company, risk management refers to ensuring that claims against the company are reduced and limited.With all these definitions, is it any wonder that the term is misunderstood and misused?In fact, if you look at all these definitions there is one constant throughout. They all deal with loss, and the protection against loss.And that’s just plain unfortunate.The truth is that risk has a very specific term in mathematics and probability theory. It’s only in general usage that we have allowed the word to morph into a threat-focused term. The word risk actually refers to the probability of occurrence. Risk is the opposite of a certainty. It doesn’t refer to amount of exposure or the nature of the exposure at all. That may not matter for the examples above. However, it does matter in more general situations such as project management and its relative strategic management.This may seem like semantics but it really does matter. You see at its simplest risk management refers to a set of management processes. The focus of these processes is on ensuring maximum returns when the occurrence is uncertain. To do that it balances the costs of enhancing positive events and their returns on the one side. On the other, it balances the costs of reducing losses and the loss amount.For example, let’s say that you are building a new business over the internet. There is a possibility that one of your promotional videos could go viral. If that happens your business would receive a major boost in business. You can do three things in this case. The first is to sit back and if it happens, it happens. The second is to do something (like animate cats) that will help to make your video go viral. At least that you hope will make the video go viral. The third thing is that you can ensure that if it happens you have the resources to support all the sales (for example putting extra bandwidth in place). The process of risk management will help you to ensure that you don’t overspend and yet get the most from the upside of the activity.What about a negative example of risk management? Let’s take the example of a new strategy to build your business. What happens if the customers can’t accept the new strategy? Your sales will go down. You can do three things once again. If you believe that the loss is a matter of short-term pain for long gain, you might do nothing. Or to reduce the risk of this happening, you might do a test on a small group of customers first. Finally, you could go back to the old strategy in order to keep your existing customers happy.Both of these examples have a good outcome and a bad outcome. The video could go viral or it could offend your existing customers. The strategy could be well received or poorly received. Neither of these outcomes is certain. Risk management is a set of management processes that ensures that no matter what really happens, you will come out on top.

All About ‘Do Not Travel’ Destinations

The Australian government’s Smartraveller site, which is one of the world’s standard references for travel advisories, classifies travel risk in several categories. The highest classification of travel risk warning is the ‘Do Not Travel’ category. This classification can also affect your travel insurance, as insurers reevaluate the coverage issues in travel to these places. The current ‘Do Not Travel’ countries The current list includes several countries in the midst of wars, and others with major internal issues and conflicts. Several of them are known to be particularly dangerous to foreigners. In some parts of the world insurgents, militants and terrorists specifically target foreigners.
Central African Republic
How do countries get onto the ‘Do Not Travel’ list?The ‘Do Not Travel’ list is compiled according to the government’s assessment of risk, known dangers, and professional threat assessments by security and intelligence agencies. The ‘Do Not Travel’ classification is an unequivocal advisory status, which has drawn complaints from foreign governments in the past. In practice, the ‘Do Not Travel’ is generally accurate, and typically applied to places where the risk level is considered unacceptably high. In many cases the ‘Do Not Travel’ advisory has been proven to be accurate.How current is the information?This category of travel warning has a natural requirement for currency of information. The intention of the ‘Do Not Travel’ advice is to ensure that travelers are fully informed of the risks. The information is as current as possible, and is changed as often as necessary.Will the government help if you are in trouble in a ‘Do Not Travel’ destination?The government will definitely try and help, but in the ‘Do Not Travel’ category, helping may be very difficult. There are several issues which impact the ability of the government to provide assistance:
Access to people in trouble in war zones can be extremely difficult. Risks are greatly accentuated in actual combat areas, and realistically getting effective help to people is sometimes very dangerous. Although it is possible for help to be provided, there’s often a virtual obstacle course of situations to be overcome.
In some parts of the world, terrorists, criminals and pirates target foreigners, particularly tourists and businesspeople. The ‘Do Not Travel’ warning is often based on these situations, and the level of difficulty in providing assistance is one of the factors in assessment.
Government help usually proceeds through the diplomatic channels available, if any, in these countries. Diplomatic issues can also be a problem in some areas where governments have limited control over the situations affecting foreign nationals.
If traveling to one of the ‘Do Not Travel’ countries, check out the online travel insurance websites before booking. These sites have a lot of useful current information and give international travel insurance rates. You can check with insurance experts about travel risks, and get informed advice about any problems.

How to Find the Right Travel Agent?

In today’s Hi- Tech world, we have easy access to all kinds of information. We’re able to research, compare, and book travel right in the comfort of our own home. But the question arises – Who needs a travel agent anymore?Fewer of us do, apparently. In last one decade the travel agents statistics had fallen by about 30%.”They are an outdated remnant of past practices that add virtually no value to any transaction today,” says one of the employee working for Michigan airlines. After my recent recommendations of travel agent in various columns, I’ve been on the receiving end of the feedback – How could i..?.So, here let me discuss about this common query. I believe that travel agents today still offer services and information that we can’t get on Internet. Granted, some things such as booking a simple flights, most people can successfully manage on their own. A travel agent however, can recommend smaller, alternative airports that the discount carriers use. This alone can save you quite a bit of money. However, the key thing that travel agents today offer is their first hand knowledge and right information. In planning a trip or vacation, one wants to find information about the places and regions suitable to them. Here the role of a travel agent comes into act considering the fact that they have traveled to many different places, they can provide much more insight than a brochure or web page can. Thus, finding the right travel agent is inevitable. The same thing goes for tours and specialty travel such as luxury, adventure, villa rentals, etc. A competent travel adviser can be your greatest asset when you’re planning a trip. The key word here is “competent.” And let me also define what I mean by agent: I’m not necessarily talking about an offshore call center worker reading from a script or a hobbyist who paid a few hundred bucks for bogus agency credentials. I mean a bona fide, certified travel professional. Once you decide to book a trip through an agent you must go through few quality check of an agent. These few measures include:Understanding An Agent And Using Your Intuition – It’s important to feel out a prospective travel agent to see if you can build a rapport with them. This can be done even when you’re dealing with an Internet agency, through phone calls or e-mails. Face-to-face meetings are not necessary. The choice of right travel agent comes from knowledge, not words. The correct answers to your direct questions are what count. Before you even ask for a price quote, probe the knowledge and personality of the agent you may be putting in charge of your hard-earned vacation. If you get the right feel about this person, you then ask for a price quote. If a travel agent quotes you a price that is not the same as, or lower than the cost of booking directly, or doesn’t offer incentives like free insurance, or even a pre-cruise hotel room, they are choosing not to compete — a choice some agents do make. They hope to attract uneducated consumers. This not the kind of agent we recommend, unless the service is so fantastic you don’t mind missing out on a few perks. But price alone may not always be the best factor to find the right travel agent. We want the best price, but we also want assistance and service when we need it. Hence, when your skull asks this ” How to find the right travel agent”, the above mention criteria should strike you first.Look For Certification – A right travel agent must be certified from some travel body or institution of his nation. This proves to be more promising or as the elderly travelers say “a certified travel agent is the right travel agent”.Stay Local And Interview The Agent – There’s no substitute for the personal touch. My best experiences with agents have been one-on-one. The ability to meet – to look the agent in the eye, to shake his or her hand – is something online agencies can’t match. (Note: not all agents work in an office, but home-based agents can and do make personal visits.) The only exception to this rule is if you’re out to find an agent with a sought-after specialty. But even then, a trusted voice on the phone is preferable to the often unintelligible, script-reading customer service associate you’re connected to when dealing with a large agency. Mind this- a professional travel agent makes personal visits. Don’t pick the first agent you find. Talk to the travel pro. Pay close attention not only to the way your prospective agent responds, but also at what’s going on in the office around you.Pressure Check – The only way to know for certain if your travel agent is a keeper is to see what happens when you run into trouble. A right travel agent would run through your foot steps in trouble. You must conform the services provided by the agent under such circumstances.Good travel agents have an edge over almost any other seller of travel. They know what you want. They speak your language. And they’re there for you when you run into trouble.
In other words, travel agents aren’t obsolete. Only the bad ones are.