Realizing, learning, and managing risk is one of the fundamental aspects of modern business. A completely new aspect in Botswana but through a comparative analysis with other sovereign states it was discovered that companies and even governments have fallen, all because they failed to manage their risks. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an Original EssayWhen you look at the names of these companies and how big they are, the footprints they have left across the world, you proceed to wonder, what would happen if an organization like ours, which is only 2 years in business, is still growing and climbing the ladder in the tourism and hospitality industry, would survive if it fails to manage its risks. “A series of large and highly public organizational and government failures over the past 10 years (Woolworths, Golden Wonder, Northern Rock, Citigroup, Enron and even the entire Icelandic banking system) has focused the attention of investors, customers and regulators on how where directors, managers and boards manage risk. “Business is dynamic and never stagnant, if the organization wants to lead at the forefront of the hospitality industry and achieve its goals it must move with the times, which means understanding what ERM is and integrating it into the organization As an organization we have set our goals such as increasing profits, taking pride in cleanliness, having one of the best gardens to host social events, providing the best quality food at an affordable price and so on, to achieve the best. from these objectives. It is essential to follow ERM. Therefore, Enterprise Risk Management (ERM) is described as "The process by which organizations across all industries assess, control, exploit, finance and monitor risks from all sources with the aim of increasing the short- and long-term value of the organization for its stakeholders." From the description alone it can be said that enterprise risk management consists of realizing, managing and exploiting organizational risks to improve the value of the organization with a view to making it profitable and overall taking it to higher levels, which is one of the key objectives of any organization and fundamentally one of Yalots Guest House.ERM classifies risk into 4 types: financial, operational and strategic. Hazard risks are those risks that have traditionally been addressed by insurers such as fire, theft, civil liability, business interruption which like Yalots Guest House have taken on an insurance policy. Financial risks are potential losses due to changes in financial markets, commodity prices such as fluctuations in shampoo prices and, currently, in Botswana, the ban on imports of bottled water and the effect this has on commodity prices. 'bottled water, which is one of the raw materials that sell at Yalots Guest House and so on and so forth. Operational risks cover a wide variety of situations including customer satisfaction, product development, product failure, these are what would happen if a customer did not like the service provided by Yalots such as the food offered, the status of the room, the state of cleanliness and whether the beds are comfortable or not. Strategic risks include factors such as completion, customer preferences, technological innovation and this means whether the WIFI in the guesthouse is good and reliable, how beautiful the garden is to host social events which basically are the strategies to attract more customers. A common thread of enterprise risk management is that iThe organization's overall risks are managed in an aggregate manner, rather than independently. “The decision-making level within corporate risk management is also shifted from the insurance risk manager, who would generally seek to control risk, to the CEO, or board of directors, who would be willing to seize profitable risk opportunities” Which is the whole idea of ​​ERM, to create a risk-aware culture and distribute risk throughout the organization to ensure that the entire organization is fully exploiting its resources and opportunities in relation to the fundamental objective of growing the organization and make it profitable. Risk awareness: the integration of risk management into the organization has been undertaken following three paths: a risk awareness campaign; the implementation of new risk identification processes at management level and the continuous development of existing risk processes at strategic level the main aim of the awareness campaign was to make staff aware of their responsibilities towards risk, while at management level the introduction of risk registers had an impact. collaborative and inclusive role. Strategically, the further development of the corporate risk register aims to ensure tighter control of risks and provides comprehensive evidence and assurance to the risk management board. ERM is about how to maximize the production efficiency of the enterprise as risks should be managed comprehensively. , and not simply insured. Therefore, as an organization, ERM will help the organization to become more efficient and exploit the above mentioned objectives as a whole as they cannot all be ensured but fully exploited and managed. An example can be drawn from how the objective of cleaning, if the organization does not take care of this and a customer finds the bed unmade and the bin not emptied then the objective is compromised and to protect against this risk it is to hire a person who is responsible for cleaning all the rooms before and after they are made available to the customer and for checking immediately before the customer is given the room key. This person then becomes the risk owner and his job is dedicated to managing this risk which would be an operational risk, this person would answer to the Risk Manager and is responsible for managing all the company's risks and reporting to the management and /or the board of directors dealing with all 4 types of risks classified above. As they are tasked with leveraging and managing risks to make the organization profitable and more efficient. Please note: this is just an example. Get a custom paper from our expert writers now. Get a Custom Essay Often when you hear the word risk, they often think of something bad or something that could negatively affect an organization, as can be seen in this Oxford Dictionary definition “chance or possibility of danger, loss or other adverse consequences". While enterprise risk management views risk as a potential profit opportunity, rather than something that simply needs to be minimized or eliminated. COSO in its definition of risk states that failure to exploit opportunities is also seen as a risk, so if Yalots Guest House does not exploit its opportunities then it faces a risk as it loses the opportunity to grow the organization . An example can be drawn from the fact that there are not many conference facilities in Molepolole and if Yalots Guest House does not.