Necessary of Risk Management Department

To: Uma Selvarajah, Area Manager

From: Yiling Sun

Date: December 1, 2016

Subject: Necessary of Risk Management Department

WIS International worked as one of the leading inventory and collection data companies of inventories like clothes, shoes or foods companies. It has over 58 years of history to develop proprietary technology. There are 15,000 employees, and 225 offices worldwide providing excellent service to 4,500 clients (Rose, 2014). WIS International wants to serve as a value strategic partner for leading retailers and manufacturers. The value of it is to do the right thing, find a better way to use technology, win together with teamwork and do excellent service for the customers. It wants to help customers to reduce the cost of unnecessary inventory, save time and increase the accuracy to meet customers’ needs.

This is a company focused on the high-quality service, however, there is no risk management department to detect and prevent risk. Hence, I strongly recommend to the manager that the company need to establish the risk management department to identify all possible exposure to loss (Dorfman, 2013).

The first potential risk I want to mentioned about is weather. I had an experience of bad weather. Usually before we start to the job, we need to go to the office first and company will drive us to the working place. Our office is located in Tacoma. In that day, the weather became so terrible. Our working place is in the Seattle so that it was a risk to drive on the highway. However, because company has no risk department, they have no preparation for the bad weather. We could not work in that day. The only thing manager did is to call our customer to say sorry and explain the reason why we could not be there. Although the customer forgave us, they suffer a lot of loss because of the overtime pay for operator on duty and standby time.

Hence, I strongly recommend to build a risk management department. First, risk managers need to check the weather every day. If it is a bad weather, they need to connect to the office in another place to check if they can be available to be there. Besides, risk managers can prepare people on call in each place to prepare for this situation. In that way, we will not allow customers to cause loss and customers will satisfied with our service because we have risk management department to deal with emergency situations.

The second potential risk I want to put forward is about communication. Communication is very important tools to create interaction with supervisors and employees in the organization. However, due to without the risk management department, there is a risk that employees did not understand the objectives clearly and they have more pressure to their works. This situation will decrease the productivity and motivation.

If the company has the risk management department, they will detect this risk and prevent it. As a risk manager, he is responsible to get out from behind the desk (Helm, 2016). he is responsible to communicate with employees about 15 minutes each time. He needs to know what we have concerns about and whether we have idea to improve the strategies of the organization. After communication, he can figure out who the decision makers are and who is powerful. In addition, interpersonal behaviors are supportive leader behavior tool (Wilson, 1995). This behavior can ensure that followers’ trust to leaders can be increased, because through the positive interpersonal communication, leaders can help followers to fix the problem and show interest to their lives and future. I think manager can provide the social support to employees and help them to decrease the pressure towards work. He can express the main idea that he is willing to help them and they can do things that they think can improve the organization’s benefits.