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Risk Assessment for Airlines
Overview
When performing an evaluation to determine the performance or health of a company, it is important to identify and evaluate any current or potential risks the company might face.
In this assignment, you will perform a risk assessment for TransGlobal Airlines to better understand its business environment.
Prompt
Perform a risk assessment for TransGlobal Airlines and write a report describing the results.
Specifically, you must address the following rubric criteria:
- Identification: Identify two risks the company is facing, including at least one high-impact risk.
- Identify the balanced scorecard component each risk corresponds to.
- Classify the risk based on these two types:
- Operational
- Strategic
- Evaluation: Determine whether the probability and impact of each identified risk is low, medium, or high. Justify your evaluation of the impact and probability of each risk.
- Mitigation: Recommend a possible risk-prevention or mitigation strategy for each identified risk.
What to Submit
Submit a 1 Word document using double spacing, 12-point Times New Roman font, and one-inch margins. Included sources cited according to APA7 style.
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Introduction
In this report, I will perform a risk assessment for TransGlobal Airlines to better understand its business environment. The report will identify two key risks that the airline faces, evaluate the probability and impact of these risks, and suggest possible mitigation strategies. The risks will be classified as either operational or strategic and will be mapped to the appropriate balanced scorecard components.
Risk 1: Operational Risk – Safety and Compliance Issues
Identification:
One of the most significant risks that TransGlobal Airlines faces is safety and compliance issues, particularly regarding regulatory changes or failures in maintaining safety standards. This risk can lead to potential operational disruptions, including delays, legal liabilities, reputational damage, or even loss of life.
- Balanced Scorecard Component: Internal Business Processes
- Risk Classification: Operational
Evaluation:
- Probability: Medium. The aviation industry is highly regulated, and airlines routinely face scrutiny. While rare, lapses in safety compliance do occur, making it a medium-probability risk.
- Impact: High. If a major safety incident occurs, the impact on the company’s reputation, legal standing, and financial health would be devastating.
Mitigation:
- Strategy: Implement a robust safety management system (SMS) that includes regular audits, employee training, and continuous monitoring of safety standards. Establish a strong culture of safety and encourage transparent reporting of any safety concerns to minimize risks related to…