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Risk Challenges and Integration

Risk Challenges and Integration

Organizations tend to face complex challenges when responding to quickly transforming and internationally pervasive threats, nearly in all industries. Typically, in trying to manage and alleviate the risks, executive risk managers try to come up with competent risk management plans, deep-rooted in every facet of the company structure. Essentially, all organizations have a role in attaining the set organizational goals, and this involves effective risk management plans. According to Scott & Davis (2015), from the rational structure outlook, organizations tend to be instruments intended to achieve precise objectives. Additionally, how fine or blunt of an instrument these organizations are is dependent on various aspects, which tend to be summarized by the structure’s rationality concept. Typically, a rational organization has the facility of implementing effective risk management Plans. Hamir & Sum (2021) say that risk management tends to be a systematic course concerning all individuals in the firm. The process aims at maximizing the off chance and consequences of positive occurrences and basically reducing the negative happenings. As such, comprehending the risk management facets is vital, as it will facilitate the maximization of profits. However, companies should not be so invested in profit-making and forget to consider and implement the spiritual concepts in their success. A company such as Starbucks faces various types of risk, and a risk management plan can be very effective for the organization. This paper aims to structure a risk management plan for Starbucks, incorporating strategic leadership theories and spiritual concepts.

Starbucks is recognized for its unique coffee brand around the globe. The firm began as a small coffee shop in Pike Place Market, and currently, it is a global corporation with numerous establishments. Regardless of its growth, the company continues to face various risks that could lead to failure if not well investigated and managed. The major Starbucks goal is to uphold its status of being the world’s most established and respected brand (Kumaresan, 2019). In attaining this, the focused expansion of the company’s global consumer base remains, thus increasing outlets in new as well as developed markets. As such, a risk mitigation plan for the firm is vital.

Parties Involved in the Risk Management Process

Risk management and risk have constantly been the center of concern regarding leadership (Ashby et al., 2018). Proverbs chapter 22, verse 3 states that a prudent individual predicts threats and takes protection. On the other hand, the simpleton goes blindly and faces the penalties. As such, if leaders go blindly without comprehending the risks associated with their businesses, then they will face negative consequences. 1st Corinthians chapter 16 verse 13 states that people should be alert, stand strong in faith, behave like men, and be sturdy. The point here is that people should be alert, and this can apply to being aware of the present risk in a firm to prevent being caught off-guard.

Typically, boards have always been part of the risk management course (Ashby et al., 2018). As such, the governance and internal regulation responsibilities are diligently associated with risk management. Successful risk evaluation, reporting, and control assist in enhancing a board’s power and internal control undertakings, thus minimizing the likelihood that a firm could deviate from the stated goals, thus failing to meet the stakeholders’ necessities. Senior teams in firms tend to take risk management seriously, but the primacies of the risk managers and the executive board could and, in most cases, vary. The risk managers will play a significant role in risk management. One of the risk managers’ roles, especially the senior management teams, is to provide a methodology for identifying and assessing the financial loss effect on the workers, the environment, the public, and the entire organization. They are also accountable for examining the application of cost-effective and realistic opportunities in balancing retention programs with commercial insurance. Normally, the CEOs are responsible for the technological, external, and political risk aspects. These are the risks that the equity analysts and the shareholders are probable to hold them accountable for.

Most of risk managers tend to be contented with conventional risk management duties like managing captives or purchasing insurance, but others are basically assimilated into the C-Suite so that they can be part of the strategic decision-making procedure. Risk managers of a company’s risk management program are responsible for comprehending the firm’s strategy for purposes of identifying hazards to that approach. Participating in the decision-making procedure will improve the manager’s aptitude for performing the assigned duties. The risk manager ought to communicate the risk transfer undertakings efficiently.

The risk managers may have some shortcomings since that is the nature of human beings. According to Merida (2015), as far as weakness is concerned, the story of Kings demonstrates that all human leaders tend to have limitations. Once the monarch division had taken place, all Israel Kings typically failed, but Judah’s kingdom was rather mixed. Solomon appeared to be continuing the glory and power of Israel using his unparalleled wisdom, but he drifted into disgrace and folly. Typically, the story of Kings revolves around the transgression of kings and the population they represented, the linked injustice, and their tenacious idolatry. Thus, it is a depiction of a miserable decline and the necessity for another King. In Genesis chapter 17, verse 6, God promised Abraham that He would make kings come from him, and He kept this promise by sending Jesus, the ultimate king.

Risk Management Plan for Starbucks

To have an effective risk environment, Starbucks leaders and managers ought to have a thorough knowledge of all the probable threats and hazards. Additionally, the leaders ought to decide on the extent of risk that the firm could handle and is willing to accept, the measures that will be implemented in the management process, and the resources that the firm will be prepared to utilize in monitoring risks. The first step in the risk management procedure is assessing the risks. This process involves threat identification, analysis of the impact, and determining the occurrence probability.

Risk Identification

This step involves the firm identifying the present risks and their complexity. There are various risks that Starbucks can identify in this step. One of the risks that the organization faces is increased competition from similar firms. Some of these firms tend to be low-cost suppliers comprising McDonald’s, Dunking Donuts, and convenience store brands. Additionally, hot and beverage firms like Pepsi and Coca-Cola, which are consistently adopting the latest emerging brand names, tend to be among the competitors. Consequently, the market trending acquisitions or products like the Coca-Cola deal can impact Starbucks’ revenue negatively. Moreover, partnerships also tend to be competition variables. The firm has its establishments inside various Target, Best Buy, as well as Barnes & Noble stores. Typically, maintaining the partnerships and preventing the competition from aligning in these channels is vital. On an operational basis, keeping its brand alive via partnerships with suppliers like Target, Walmart, and additional retailers comprising online retailers is significant.

Another risk tends to be the fluctuation of commodity prices. Starbucks has been able to admit how vulnerable it is as far as commodity prices are concerned (Anson, 2022). The firm spends a lot of money on sugar, coffee beans, milk, and additional commodities. Price increases for these goods can, at times, be a threat to the company. Additionally, the company faces some market risks. Typically, since the 2009 lows, the American stock has enjoyed a fortunate climb, with the stock market and economy progressively gaining yearly.

An additional risk is underperforming in the emerging markets. The company has channeled a considerable amount of money into international expansion. Partially, this is because several prime localities in the United States already have Starbucks establishments, thus leading to market saturation. Additionally, technological growth has put pressure on many organizations to expand internationally. At the same time, there have been many new companies in the industries, thus increasing competition. The more the company expands internationally, the more new markets are invented, and there is the potential of underperforming in the new markets.

Moreover, in a technological era, Starbucks has faced technological threats. Typically, the increased popularity of mobile computing, as well as wireless technology, has shaped a compelling novel threat for network administrators. These are the unauthorized intrusions onto networks by hackers and viruses that tend to take advantage of slackly secured laptop PCs. Basically, malicious worms and hackers are able to slip through deeply fortified network parameters. Owing to its technology utilization, this tends to be a probable risk for Starbucks.

Identifying the Probability of Risk Occurrence

Typically, Starbucks has to identify the likelihood of all the stated risks occurring. A major risk that the organization faces is increased competition from similar firms, and basically, the probability of the risk occurrence is high. There will be no time that Starbucks will operate in a risk-free environment. As time goes on, the competition continues to increase, and it is upon the firm to come up with strategies to become more competent. Another risk tends to be the fluctuation of commodity prices, and there is a high probability of its occurrence. This is because the company does not have control of the prices in the market. After all, it is not monopolistic. An additional risk is underperforming in emerging markets, which has a lower probability of occurrence. Regardless of the company facing competition, it has come up with competent strategies that have made it outstanding until now. Another risk is the technological threat since Starbucks has highly adopted technology in its operation. The probability of the technology threat happening is lower owing to the protective approaches that the firm has undertaken.

Identifying the Risk Impact

The company must identify the impact of the risks in case they happen. On the occurrence of increased competition for the company, Starbucks is likely to sell less and have reduced productivity. On the other hand, in the fluctuation of commodity prices, the product prices may become very high, and the firm may make losses if, after selling the final product, all the costs are not catered for. Additionally, if the company underperforms in the face of emerging markets, it is likely to be overshadowed, and another company might take its affluent position. Additionally, it could make lots of losses by underperforming. In case of a technological threat occurrence, personal client data could be accessed, and the hackers would use them inappropriately. Consequently, the company would lose its customers and have a poor reputation for its recklessness in safeguarding client details. Additionally, the company could lose a lot of finances in case the hackers manage to access its finances. Failure to have a strong security system could cause a lot of harm to the company. According to Asamoah (2021), organizational security culture tends to have a vital and positive effect on information management security, human resources, and facility management security.

Managing the Risks

Once the threats are identified, together with the probable effect and the likelihood of taking place, the management procedure can commence. The company could deal with the risks by choosing one of the following strategies: avoidance, acceptance, transference, and mitigation.

In avoidance, the firm could basically conclude that the risks are not worth it and avoid them. For instance, a specific business acquisition or trading type could be extremely risky. Typically, in case the downfall from risk is extremely harmful to move forward, the firm could decide to eliminate the risk or abandon the undertaking. In this case, some risks cannot be avoided. Basically, the risk at hand comprises increased competition, fluctuation of commodity prices, the company’s underperformance in the face of emerging markets, and technological threats occurrence. Increased competition cannot be avoided because there are already established and emerging firms that are providing the same products. Additionally, the fluctuation of commodity prices cannot be avoided because the economy is a significant determinant. On the other hand, the company underperformed in the face of emerging markets could be avoided. This can be done by endorsing training and education, encouraging worker interest and passions, conducting regular performance reviews, and establishing clear expectations and KPIs. Another threat that could be avoided is the cybersecurity threat because the impact is extreme on occurrence. Some of the strategies that could be utilized include training employees on the threat, ensuring the software and systems are updated, installing a firewall, ensuring endpoint protection, and using two-step verification for passwords.

In acceptance, the company could accept the small risks in given circumstances. In case mitigation has to be done, the key is finding simple and low-cost choices. Typically, the benefit of accepting the risks is that no costs would be incurred, and it tends to free up the company’s budget for higher priority and extremely severe threats. The secret, in this case, is continuing to monitor even the tiniest hazards for the purpose of minimizing any undesirable surprises. For the increased competition threat, Starbucks could accept it and then come up with strategies to gain a competitive advantage in the market to outweigh the other firms. Typically, it can gain a competitive advantage through differentiation, cost leadership, strategic alliances, and defensive strategies. In cost leadership, the firm will be able to provide the same coffee quality as the competitors but at a reduced cost. Additionally, for the fluctuation of commodity prices threat, the company has to accept the challenge and prepare financially in case of such an occurrence.

Another approach to managing the risks is transferring them. In this approach, Starbucks could transfer the risks to a third party through insurance purchased. The benefit of utilizing this strategy is that the company could take most or some of the burden from the threats and share it with a third party (Fadun, 2013). In the case of technological threats where the company’s finances are stolen, the firm could insure the risk. The final strategy tends to be mitigation, where the firm could take measures to mitigate the risks. Typically, this strategy intends to minimize the probability of occurrence or reduce the effect in case it occurs. Following the presented Starbucks method, the leaders could opt to mitigate risks such as technology threats.

In reducing all these risks, leaders ought not to forget God and his virtues. Leaders can ask God for help in different areas, and their prayers will be answered. Organizational leaders should be able to inspire other individuals in the organization to make daily choices that improve the long-term viability of the firm and, at the same time, maintain short-term monetary stability (Alayoubi et al., 2020). Proverbs chapter 16, verses 1 -3, tells Christians to commit anything they do to God, and their plans will thrive. As such, Christian leaders should utilize strategic foresight in planning for the future but remember to tell God their plans so that He can help them during execution. Strategic managers have the facility to streamline procedures, upsurging productivity, nurture innovation, and create an initiative and creative environment for workers (Jaleha & Machuki, 2018). Such types of leaders will make sure that their firms are able to maintain a competitive advantage. According to Mahdi & Nassar (2021), strategic leadership tends to be an approach to managing organizational knowledge. Once strategic leadership backs up knowledge management, tactical instruments for attaining sustainable competitive advantage come up.

In conclusion, risk management is an approach vital for many organizations, particularly Starbucks, which has faced various risks. The risk managers, especially the senior management teams, will play a significant role in the risk management. One of the risk managers’ roles is to provide a methodology for identifying and assessing the financial loss effect on the workers, the environment, the public, and the entire organization. Typically, even with Starbucks being successful for the most part, it faces some risks such as increased competition, fluctuation of commodity prices, underperformance in the face of emerging markets, and technological threats occurrence. Risk management begins with risk identification and then management. Depending on the risk at hand, the corporation could deal with the risks by choosing one of the following strategies: avoidance, acceptance, transference, and mitigation.


Alayoubi, M. M., Al Shobaki, M. J., & Abu-Naser, S. S. (2020). Strategic leadership practices and their relationship to improving the quality of educational service in Palestinian Universities. International Journal of Business Marketing and Management (IJBMM)5(3), 11-26.

Anson, M. (2022). Diversification—A Free Starbucks Cup of Coffee? The Journal of Portfolio Management.

Asamoah, D., Nuertey, D., Agyei-Owusu, B., & Acquah, I. N. (2021). Antecedents and outcomes of supply chain security practices: the role of organizational security culture and supply chain disruption occurrence. International Journal of Quality & Reliability Management.

Ashby, S., Bryce, C., & Ring, P. (2018). Risk and the strategic role of leadership.

Fadun, O. (2013). Insurance, A Risk Transfer Mechanism: An Examination Of The Nigerian Banking Industry. IOSR Journal Of Business And Management, 7(4), 93-101. doi: 10.9790/487x-07493101

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Merida, T. (2015). Exalting Jesus in 1 & 2 Kings. B&H Publishing Group.

Jaleha, A. A., & Machuki, V. N. (2018). Strategic leadership and organizational performance: A critical review of literature. European Scientific Journal14(35), 124-149.

Scott, W. R., & Davis, G. F. (2015). Organizations and organizing: Rational, natural and open systems perspectives. Routledge.


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This assignment is designed to allow the student to integrate the learnings from the course into a cohesive risk management plan for an organization. This paper culminates the learnings from the discussions and the previous 3 papers by allowing the student to focus at the organizational level. The Risk Management Techniques Paper Assignment framed what work within the organization looks like. The People and Risk Paper Assignment allows the student to appreciate the larger picture the organization is working within, and the Spiritual Risk Paper Assignment helped to frame an organization within both history and the spiritual realm (as opposed to focusing primarily on profits, as is a temptation in most businesses). Now, the student is given the opportunity to incorporate strategic leadership theory into their analysis. The focus of the paper is still on risk, but risk management should be informed by the context the organization exists within and what actions leaders should take to advance that particular organization.

Risk Challenges and Integration

Risk Challenges and Integration

The student will write a paper that integrates the learnings from this course. Specifically, the student will broaden their overall understanding of strategic leadership by building a risk management plan for an organization of their choosing while utilizing the theories of leadership and New Testament scripture. The student should clearly identify the risks and the plan to address them.
• 10-page length requirement, which should include an abstract of 150-250 words;
• Excluded from this length is the title page and reference section;
• APA formatted;
• 10 references are required in addition to the course textbooks and the Bible;
• Acceptable sources include scholarly articles published within the last five years.

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