Businesses is the economic system in which goods and services are exchanged for one another or money, on the basis of their perceived worth. Every business requires some form of investment and a sufficient number of customers to whom its output can be sold at profit on a consistent basis. This business definition establish direct or indirectly a flow of money. In addition, this flow of money has a temporary component. The balance of the flow of money determines the excess or deficiency of money, then the surplus or needs of funds. Failure in the access of funds could represent a serious problem in the business development. Two timeframes balances are considered, the short-term and the long-term.

Requirements for the operating expenditures requiring short-term operating funds:

 

Risk-management process; speculative and pure risk description

Risk: Meteorite impact PCC plant.

  1. Step 1, Identify risks - pure or speculative: the pure risk looks to be a serious threat for PCC; the potential losses are the total loss of PCC plant if a meteorite impacts any PCC plant.
  2. Step 2, measure impact on PCC: according to the Near Earth Object Program by the NASA and the AstroGuard project to protect the planet, the combined total impact probability for all listed object over the next hundred years is one in 67. If this impact occurs in the PCC plant, the losses in material and human capital could be tremendous and they could mean the total destruction of the PCC plant and operations.
  3. Step 3, evaluate alternatives: this risk can not be avoided, neither to control it. The retention of the risk is too high for PCC. As conclusion, risk transfer is the better alternative.
  4. Step 4, implement program: based on the conclusion in the steps 2 and 3, few programs could be developed. The more active program is to follow the NASA publication about the evolution of each near earth objects and to be attentive in case that one of them could strike the PCC plant.
  5. Step 5, monitor results: this is an external risk, it does not depend of customers, own personnel, etc. In addition, one it happens, nobody will be interested in continuing producing potato chips at PCC (probably the site will be used for research programs). As conclusion, only an alert program could be developed.

 

Risk: genetically modified potato produce serious diseases in people

  1. Step 1, Identify risks - pure or speculative: this speculative risk could mean a serious liability for PCC. PCC is working with genetically modified potato because it has a quicker growth, lower herbicide requirements, is cheaper, etc. These characteristics offer to PCC a higher profitability and lower risk associated with natural resources provision. The risk of accidents in the production of the genetically modified potato is low, but due to the relaxation in the regulations, this risk is increasing.
  2. Step 2, measure impact on PCC: The consequences for PCC in case of any link between this genetically modified potato and serious diseases in the population will be very high. People will avoid buying PCC product for the lack of confidence. It could represent the bankruptcy for PCC.
  3. Step 3, evaluate alternatives: PCC has many option here. Risk avoidance is one of them; PCC could choice not to work with genetically modified potato. Risk control is not a real option for these risk due to the timeframe developing/discovering/investigating the link between the potato and the diseases. Risk retention is an option, in fact is the option that most of the companies that deal with this risk are taken. Risk transfer is possible option too, but it could be very expensive; this will attempt with the profitability in the use of genetically modified potato.
  4. Step 4, implement program: under risk avoidance, the program is to develop the strategies being sure that all the natural resources used at PCC are not genetically modified. Under risk retention, the companies engage a very skilled law buffet that they help to expand and dilate any implication and liability, such as the some companies are doing right now in poor countries.
  5. Step 5, monitor results: the ongoing process in the evaluation of the resources for the first alternative, potential link between the potato chips and any disease for the second one, are mandatory.

 

Risk: Industrial espionage

  1. Step 1, Identify risks - pure or speculative: this pure risk could attend with the profitability of PCC. The market evolves continuously; new products and services should be offer for the companies to gain over the competitors. If the industrial espionage affects PCC it could represent a serious risk for PCC operations.
  2. Step 2, measure impact on PCC: this risk could represent for PCC a loss of competitiveness that could push to PCC to bankruptcy.
  3. Step 3, evaluate alternatives: risk avoidance, transfer are not possible alternatives. The better alternative is a combination between control and retention. This combination will offer to PCC to be alert and minimize the impact of this risk.
  4. Step 4, implement program: PCC should implement strong programs in those areas that they deal with sensitive information about PCC operations, development, innovations, etc.
  5. Step 5, monitor results: an ongoing process should be developed, with continue changes in strategies. The repetition of the surveillance process offers a point of to break the control.

 

Risk: management expertise and education

  1. Step 1, Identify risks - pure or speculative: this speculative risk deal with the decision making process in the business running.
  2. Step 2, measure impact on PCC: the impact of bad decision could have very serious consequences for PCC operations. It could cost a lot of money, the lost of human capital, share market, etc.
  3. Step 3, evaluate alternatives: risk transfer, retention are not possible for this risk. Risk control and risk avoidance are the better options dealing with this risk.
  4. Step 4, implement program: continue learning process and similar tools could be implemented to offer more educational background to managers. In addition, it should develop a periodic evaluation, workshops and meetings where people could synchronize ideas energy in PCC development.
  5. Step 5, monitor results: HR should develop a continue process in the evaluation of the management performance.