At & t
Operational
Specific Loss Exposure Description
The forms of operational risks are the ones that occur from inappropriate/inadequate internal processes in an organization, which is caused by employees and stringent systems, as well as external events. These include factors, which will be affecting the operation of an enterprise. They include internal fraud where there is tax evasion, assets misappropriation, and corruption. Also, external fraud like cyberattacks, hacking, and forgeries of documents may have a significant impact on the operation of a business. These are general risks, which may be facing a company.
AT and T company is faced with different kinds of operational risks. In this regard, changes in available technology are affecting the operation of the company. Also, there have been adverse changes in the U.S security market, which have been affecting the return of investment.
Frequency and Severity Estimate
The operational risks are considered less visible. It is not easy for a business organization to carry a precise identification of operational risks as they emerge from all corners of the business. In this regard, the operational risks are minimal, for example, risks caused by human errors. However, if not identified, the risks could be significant, as they can cause bankruptcy to an organization because of serious fraud. They occur in every organization. The AT and T company is also facing the risks of competition, where they are offering low prices. It has been affecting the operation of the business due to fluctuation in prices. Also, the business has been facing litigation by third parties. Lastly, there has been a failure of major networks, which are under the operation of DIRECTV. The effect of security breaches has been affecting customer information.
Risk management recommendations
The ability of the business to generate advertising revenue has been providing options for the business in addressing the issue of changing prices. There is a need for the organization to ensure adequate security of its data. The employees should also be encouraged to be responsible to prevent possible litigations, which has been caused by third parties. The business should also continue to offer attractive products, which will be addressing the problem of competition.
Hazard Risks
Specific loss exposure description
The hazard risks involve traditional risks that are manageable by an organization; however, they have indirect losses when the hazard becomes active. It is not easy for an organization to control the hazard risk.
Frequency and severity estimate
Hazard risks pose a small threat of risk portfolio to any organization, as it affects the health, environment, and health of individuals (3 AT&T stock risks that Wall Street completely has overblown, 2019). It is a form of risk that is dormant; however, when it occurs, it becomes active, causing an emergency. In this regard, there is a need for an organization this risk from occurring. In this regard, the severity is high when it becomes active and can cause a crisis to an enterprise. For instance, the congressional action to address spending reductions may pose a serious risk the organization, as there may be reluctance by the government to spend. The threat of hurricanes, floods, natural disasters, etc. are also some of the hazards that may affect the operation of the business.
Risk management recommendations
The hazard risks are manageable since the business will always be involved in measures to prevent hurricanes, floods, natural disasters, and fires from affecting its operations. In this regard, the business should put appropriate strategies, which will not only ensure prevention but also recovery when these risks occur.
References
3 AT&T stock risks that Wall Street completely has overblown. (2019, May 30). InvestorPlace. https://investorplace.com/2019/05/3-att-stock-risks-wall-streetoverblown/