Fundamentals of Risk Management

Risk strategy
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use of the brand to extend into new product areas and new business sectors should 
only be undertaken where there is clear responsibility within the organization for 
managing the brand.
As well as brand extensions, there has been a trend in recent times towards allow-
ing branded concessions to be established within other organizations. It is now
commonplace to see high-profile catering brands running the restaurant and cafe 
facilities in large department stores. This trend has developed at the same time as the 
increase in high-profile sponsorship deals. For example, many sports clubs have a 
new stadium that is actually called by the name of their main sponsor.
Many organizations operate on a franchise basis, whereby the brand is franchised 
to an individual or other business. These developments in branding enable maximum 
benefit to be gained from a high-profile brand. However, there are significant risks 
attached to these opportunities, and brand use and extension continues to be an 
issue that requires careful management.
Successful management of a franchise brand has many challenges. The expectations 
and requirements of the franchise or brand owner would be set out in a detailed 
contract in most cases, although some franchise organizations have been in existence 
for a long time and the early franchisees may not have the same rigid contract con-
ditions. Most franchise owners provide extensive training for franchisees, including 
training on the quality of products. A significant issue for many franchise owners is 
arrangements for procurement of supplies. Often, the franchise owner will prohibit 
procurement of supplies locally, so that the product delivered by the franchisee is 
always consistent.
Environment
One of the most rapidly developing concerns in society is global warming and how 
the activities of individuals and organizations might have an impact. Environmental 
concerns can range from issues to do with historical land contamination and con-
tamination of water supplies, to industrial emissions into the atmosphere and the 
desire of organizations to be seen as green.
Disposal of waste is an issue of concern to all organizations. For organizations 
producing industrial waste, the legislation is extremely detailed on how the waste 
must be treated and the arrangements for discarding it. For commercial organiza-
tions that do not produce industrial waste or by-products, there are still issues of 
concern. The disposal of commercial waste can be costly and most countries require 
or (at least) encourage a large degree of recycling.
The concerns for many organizations therefore relate to minimizing the amount 
of commercial waste that they produce, as well as adopting other green policies. For 
many organizations in the public sector, recycling arrangements are detailed and
recycling targets are important because of the greater scrutiny of the performance of 
public bodies.
Arrangements that may be investigated will include the procurement of supplies 
or raw materials that have less impact on the environment and/or are easier to
recycle. Organizations may also wish to introduce a recycling policy and make specific 
arrangements for the collection of recyclable waste materials. For some organiza-
tions, there is also scope to look at travel arrangements and encourage employees to 

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