Technology

Deliverable3

Deliverable 3: Risk Mitigation PlanInstitutional affiliationDateKingston-Bryce Risk Mitigation PlanThe risk mitigation plan is aimed at eliminating or minimizing the impact of risk events occurrences that can harm a project. During acquisition, a business is vulnerable to a high potential of risks hence important for the project manager to have an understanding of the various risks that might affect the outcome of the project (Pedroso et al., 2017). They should be in a position to determine if the risks are avoidable, sharable, reducible, or transferable.Risk AvoidanceRisks avoidance entails the elimination of risks that harm the assets of the organization. Risks avoidance is primarily aimed at avoiding the risks entirely. An example that can be utilized in KBL is to avoid renewing of the contract agreement with the acquired company’s foreign suppliers. To avoid the exposure of exchange rate volatility risk and its standing on local business contribution, the company should use the local suppliers. The company should also avoid the use of ERP system to avoid technological risks that come along with the implementation of the system within the company. The merged employees from the acquisition ought to complete the required training on the current ERP system.Risk SharingAt some point, risk avoidance might not work hence important for the company to utilize risk sharing. In this risks management concept, the costs associated with the risks are distributed amongst the participants in the enterprise. A good example of risk sharing is when the marketing team goes over their annual expenses while the sales team re-distributes certain amount of their budget to cover the loss that the marketing team has undergone or the company could have faced (Morten, 2019). For the acquisition, it is essentially important to share the risks amongst KBL and the acquired company. Since KBL will have control of the financial facets of the newly acquired company, they should consider diversifying their debts to distribute them equally if required.Risk ReductionA major aim of risk management is to ensure risks are reduced for the success of a project. Risks reduction entails how organizations reduce financial risks by coming up with measures that can help to minimize the occurrence of risks within the organization. For example, health and safety are major examples of how KBL can reduce risks. The newly acquired company may not have the required standards as a highlight by OSHA. The company should, therefore, implement training for the employees to understand the OSHA health and safety standards. Based on the acquisition, to reduce risks the acquisition can be broken down into small regular deliveries which can also help them to manage and achieve their goals.Risk TransferRisk transfer is a technique in which potential risks faced by an organization is shifted to a third party. A party generally assumes the liabilities of the other party. From the scenario, acquisition can be identified as a risk transfer as KBL will experience all the liabilities from the newly acquired company. The risk transfer is vital for acquisition as KBL will gain liability of the newly acquired company entirely rather than damaging the existing business due to the risks. The company can use the insurance policies of the newly acquired company to compensate with the financial liabilities.ReferencesMorten, M. (2019). Temporary migration and endogenous risk sharing in village india.Journal of Political Economy,127(1), 1-46.Pedroso, C. A., Salies, J. B., Holzberg, B. B., Frydman, M., & Pastor, J. A. S. C. (2017, October). Risk Mitigation on Deepwater Drilling Based on 3D Geomechanics and Fit-For-Purpose Data Acquisition. InOTC Brasil. Offshore Technology Conference.

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