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Sample Masters Risk Management Coursework

Published by at December 13th, 2022 , Revised On March 20, 2024

Strategic Risk Management

Executive Summary

The following essay is based on the assessment of strategic risk management in an organisation. The coursework aims to discuss whether or not strategic risk management as a holistic approach for managing the risk within an organisation is useful. The organisation that has been selected for undergoing the coursework is British Petroleum.

The different sections of the assignment outline the necessity of strategic risk management and have assessed the factors influencing its implementation. The use of different theories, models, and frameworks has supported the discussion in context with British Petroleum. The assignment has presented the conclusion supporting the need for strategic risk management in the petroleum industry for gaining several benefits.

Introduction and Company Overview

The process of strategic risk management is defined as identifying and assessing the risk that the business may face within its operations and the development of strategies, according to the study of Chance and Brooks (2015).

Additionally, the purpose of strategic risk management is to ensure that the company is working effectively and has been managing the risks meritoriously by taking preventive measures for its functions and operations. The following assignment has discussed the need for strategic risk management in the selected company. British Petroleum was assessed and analysed using secondary sources.

British Petroleum is one of the renowned oil companies that started its operations in 1909 with the Anglo Persian Oil Company and their headquarters in London. The company has been operating upstream of oil exploration and downstream of oil refining, sales, and marketing.

It is one of the largest companies in the world, having more than 22 400 service stations across the world. The company provides fuel, energy, and retail service to its consumers and offers petrochemical products for daily use (British Petroleum Annual Report, 2018).

Strategic Management for Developing Holistic Approach to Managing Risk

Within the case of British Petroleum (B.P.), the Gulf of Mexico Oil Spill in 2010 is one of the major events that occurred due to the negligence and the lack of contingency planning in the company. The incident occurred at one of the company’s oil wells, where nearly 4.9 million barrels of oil were leaked in three months.

It had an extreme impact on the environment and the country’s economy that resulted in the decreasing share price of the company (Sammarco et al., 2016). The issue has also created a higher negative perception among the stakeholders and the general public.

According to the study presented by Neil Allan, John Davis, and Patrick Godfrey (2007), strategic management plays a vital role in managing the risk in an organisation. The study has highlighted some of the key factors that are responsible for managing risk in the company.

These factors are people, process, pattern, performance, and perception of the people and the company. The loss of strategic risk planning may attract several disasters to the company in the short and long run.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 1 Neil Allan, John Davis and Patrick Godfrey (2007)

The figure has provided the identification of different risks that are associated with the companies. Strategic risk management is the holistic approach for the effective management of the risk in the companies. The study of Larkin (2003) has also presented the concept and application of strategic risk management within the companies that can create a difference in the compliance and governance of the company.

Additionally, the study of Bromiley et al. (2015) has emphasized the absence of strategic risk management that can create hurdles within the firm’s operations and can develop the negative perception of the company in the global world.

The study conducted by Slagmulder and Devoldere (2018) has also mentioned the need for strategic risk management that can sustain the uncertainty for assessing the company’s different capabilities that can affect the company’s performance.

It demonstrates the company’s capabilities for assessing and managing the risk that can be faced in the long run and the short run within different operations. According to the company’s annual report, it has been mentioned that the company utilizes the methods of risk management and uses its abilities for managing the faced uncertainties within the firm (B.P. Annual Report, 2018).

The company’s risk management system is understood by the environment and is assessed in the best possible way to treat the company’s potential exposure. British Petroleum conducts several risk management activities necessary for managing the company’s different identified and expected risks (B.P. Annual Report, 2018). The risk management activities of the company are provided below;

Sample Masters Strategic and Operational Risk Management Coursework

Figure 2 risk management activities (B.P. annual report, 2018)

The management and staff of the company identify and operate the risks daily in terms of the management and promotion of the risk for carrying out the proper operations. Additionally, the use of strategic risk management is highly effective in meeting the company’s requirements in terms of the laws and regulations provided by the government and the regulatory body.

The effective use of strategic risk management allows the company to carry out sustainable operations and minimize the negative impact of the risk on daily operations (B.P. annual report, 2018).

The management and the operations of the company are effectively managed in terms of the functions and integrations of the strategies applied in the company for better performance and resources. The company has a defined standard and utilizes the risk management activities to improve the previous operations and plan the new activities in the long run.

Additionally, according to the study conducted by Rugby (n.d), the company can utilize the sources and can develop the means of mitigating the hurdles and hazards in the company for effective functions and operations.

The effective use and implementation of strategic risk management allow the company to act upon the standards and regulations of the governance. The company assesses and manages the risk effectively that can be according to the policies and the activities of the government and the authorities.

Additionally, as discussed in the company’s Annual report, the company’s auditing team overlooks and assures the proper risk management system for the appropriate designs and assessment of the risk that is significantly related to British Petroleum.

British Petroleum has its own effective risk and governance committees for assessing and controlling the risk factors for different aspects of the company. It has been observed that the company has its executive committee for the management of different risks in terms of strategic and commercial risk, health, safety, security, environment, and operational risk, financial reporting risk, employee risk, and the risk for taking further investment decision (B.P. Annual Report, 2018).

Additionally, the company has different boards and committees for the audit, safety, and another geopolitical committee for the company’s risk management.

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Major Internal Operational Risks in British Petroleum

Even though the company has been operating well and has been creating a better image globally, there are some of the major internal operational risks in the company for long-term sustainability.

The assessment has been made using enterprise risk management that can provide the core areas of internal and operational management for British Petroleum and the risks associated with the business in the long run.

The enterprise risk management is associated with the overall organisation for the internal and external operations for the development and implementation of strategies in the long run. According to the study conducted by Fraser and Simkins (2010), there are several internal and external effects of the company that comprises the assessment of events related to the company’s risk management.

Different categories of enterprise risk management create control in different aspects. Mcneil (2013) has also discussed enterprise risk management’s different objectives that include the strategic, operational, and reporting, and compliance risks under the single head. The strategic goals and objectives of the company are directly associated with the company’s overall goals in the long run.

However, the authors have also presented contrary arguments related to the company’s limitations due to the absence of strategic risk management. Some of the major risks that have been identified in the company are related to ethical misconduct and having the threat of non-compliance.

Additionally, as discussed in the company’s annual report, there are several risk factors for British Petroleum that can affect its performance and create a negative perception in the global world (B.P. Annual Report, 2018).

Some of the major internal risks of the company include; Process safety, personal safety, and environmental safety risks, Financial reporting risks, Drilling and production risk, Environmental and other uncertainties, Transportation and delivery risks, and Product quality risk.

Strategic Risk Management Framework

Several companies utilize the methods of strategic risk management using the framework that can be used to assess the risk and identify the appropriate measures of risk that can create the difference within the companies. Strategic risk management can be highly effective for creating better options and developing the contingency plan for risk management.

Additionally, the study of Sheedy, Griffin, and Barbour (2017) has presented the framework for assessing risk and implementing proper strategies for managing the risk in the company. The strategic framework for the risk has been presented and has been explained within the context of British Petroleum that can reduce the risks and can take certain actions for the ;

Sample Masters Strategic and Operational Risk Management Coursework

Figure 3 – 1 Strategic Risk Management Framework

The first step is to assess and analyze the strategic position of the company. The company must follow the strategic risk management framework for managing and evaluating its performance. The next step in the framework is to meet the shareholders’ expectations.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 4 – 2 Strategic Risk Management Frameworks

Furthermore, the step is to scan the environment of the company.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 5 – 3 Strategic Risk Management Frameworks

It supports scanning and evaluating different internal and external strategies for the company to manage the risks.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 6 – 4 Strategic Risk Management Frameworks

The company can also conduct the SWOT analysis to determine the risks that can be gained through the company’s SWOT analysis.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 7 – 5 Strategic Risk Management Frameworks

The use of strategy formulation within the company is to have the company’s objectives that can create the different strategies and policies and help achieve the company’s mission and vision.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 8 – 6 Strategic Risk Management Frameworks

The strategy implementation step is necessary for the operational planning in terms of programs, budgets, and the procedures for the risk assessment and analysis.

Sample Masters Strategic and Operational Risk Management Coursework

Figure 9 – 7 Strategic Risk Management Frameworks

Furthermore, the last step of evaluation and control organizes and directs the plan efficiently and effectively for the identification of the strategic plans and identifying the new opportunities and risks for the development of strategic reviews and having the proper contingency plan for the future risks and supporting the strategic risk management of the company.

Purpose of Strategic Risk Management

Within the context of British Petroleum, it has been observed that strategic risk management is highly effective in avoiding the problems of recognizing the risks of the company that can occur in the long run. It has been observed that strategic risk management can be effective for the company to assess the company in terms of internal and external factors of the company.

Based on the study of Niknejad and Petrovic (2016), the use of strategic risk management allows the company to gain the benefits of increasing their overall productivity and conducting the operations under the assessment of risk for the company to avoid any sort of negativity within the company in the long run.

There are several studies conducted by different researchers regarding the challenges that can be faced by the business towards their goal attainment (Baron, Mueller, and Wolfe, 2016).

On the other hand, it has been highly recommended for the companies to carry out effective strategic risk management to minimize the hurdles and issues towards completing the tasks. It has been observed that strategic risk management allows the adoption of such policies that can be effective for its performance and its overall long-term sustainability (Zou, Scholer, and Higgins, 2014).

British Petroleum can gain the benefits from strategic risk management in terms of having the assessment of the investment and the having proper implementation of strategies towards the long-term success (Obuchowski, 2006). Such strategies can also ensure gaining a competitive advantage in the long run and in developing a differentiated position in the global market.

Factors Influencing the Implementation of Strategic Risk Management

Planning and implementing the strategic risk management strategies are necessary for the companies to carry out contingency plans for the company to gain profitability in the long run. However, certain factors in the companies provide certain limitations for implementing the strategies for long-term growth and sustainability.

Based on the study of NDAMBUKI (2016), some of the most commonly observed factors that are responsible for influencing the implementation of strategies are the changes in culture, personnel training, organisational resources, communities, and the implementation of strategic risk management are among the common factors that restrict the companies in implementing the strategies of risk management in the companies.

Within British Petroleum, the company has a differentiated position for the risk assessment and controlling of the activities for the individual aspects. Additionally, the presence of corporate governance and the implementation of laws and regulations allow British Petroleum to control and assess the requirements for the individual segments effectively.

As discussed in the company’s annual report, the ability to act upon the strategies could also negatively affect the company and its position if it is not controlled effectively (B.P. Annual Report, 2018). British Petroleum has the strategies for implementing the new technologies that can enhance the business process and operations.

However, there are certain areas and geographical locations that are not advanced for the use of technology. It is also one of the major limitations that the company can face while adopting the strategies for risk management.


The following assignment is based on the strategic risk management of the selected company British Petroleum that has been assessed and analysed using the different aspects of the risk management that the company uses to manage the company’s risk.

The study has emphasised identifying the risk that is there within the company and the strategies that can be used for mitigating these risks. It has been evaluated that the company has faced a massive challenge in terms of the Mexico Oil spill that has negatively influenced the company’s position.

However, the use of such strategic risk management strategies for controlling the risks in different operations has created a positive influence towards mitigating the company’s risks. The analysis has provided the assessment that the company utilises the different strategies for identifying, controlling and minimizing the upcoming risks of the company. The last section of the assignment has provided the limitations and benefits of British Petroleum to implement the risk strategies to control the challenges in the company.


Baron, R.A., Mueller, B.A. and Wolfe, M.T., 2016. Self-efficacy and entrepreneurs’ adoption of unattainable goals: The restraining effects of self-control. Journal of Business Venturing31(1), pp.55-71.

British Petroleum Annual Report (2018). [online] Available at: https://www.bp.com/content/dam/bp/en/corporate/pdf/investors/bp-annual-report-and-form-20f-2017.pdf [Accessed 4 Oct. 2018].

Bromiley, P., McShane, M., Nair, A. and Rustambekov, E., 2015. Enterprise risk management: Review, critique, and research directions. Long-range planning48(4), pp.265-276.

Chance, D.M., and Brooks, R., 2015. Introduction to derivatives and risk management. Cengage Learning.

Fraser, J., and Simkins, B., 2010. Enterprise risk management. Hoboken, N.J.: Wiley.

Larkin, J. 2003. Strategic reputation risk management. Basingstoke: Palgrave Macmillan.

Mcneil, A. 2013. Enterprise Risk Management. Annals of Actuarial Science7(1), 1–2. doi:10.1017/S1748499512000334


Neil Allan, John Davis, and Patrick Godfrey. 2007. Ten steps to managing strategic risk—a holistic approach. Proceedings of the ICE – Civil Engineering160(3), 137–143. doi:10.1680/cien.2007.160.3.137

Niknejad, A., and Petrovic, D., 2016. A fuzzy dynamic Inoperability Input–output Model for strategic risk management in Global Production Networks. International Journal of Production Economics179(C), 44–58. doi:10.1016/j.ijpe.2016.05.017

Obuchowski, J. 2006. The Strategic Benefits of Managing Risk. MIT Sloan Management Review47(3), 6–7. Retrieved from http://search.proquest.com/docview/224962096/

safe handling of light ends : a collection of booklets describing hazards and how to manage them. (n.d.). ([5th ed.].). Rugby, U.K.: British Petroleum/Institution of Chemical Engineers.

Sammarco, P.W., Kolian, S.R., Warby, R.A., Bouldin, J.L., Subra, W.A. and Porter, S.A., 2016. Concentrations in human blood of petroleum hydrocarbons associated with the B.P./Deepwater Horizon oil spill, Gulf of Mexico. Archives of toxicology90(4), pp.829-837.

Sheedy, E.A., Griffin, B. and Barbour, J.P., 2017. A framework and measure for examining risk climate in financial institutions. Journal of Business and Psychology32(1), pp.101-116.

Slagmulder, R., and Devoldere, B., 2018. Transforming under deep uncertainty: A strategic perspective on risk management. Business Horizons61(5), 733–743. doi:10.1016/j.bushor.2018.05.001

Strategic Management Framework., 2018. [online] Available at: https://www.icwa.wa.gov.au/__data/assets/pdf_file/0016/7117/Risk-Management-Strategic-Management-Framework.pdf [Accessed 4 Oct. 2018].

Strategic risk management.(Brief article). (n.d.).Business Insurance46(35).

Zou, X., Scholer, A.A. and Higgins, E.T., 2014. In pursuit of progress: Promotion motivation and risk preference in the domain of gains. Journal of personality and social psychology106(2), p.183.

Frequently Asked Questions

The purpose of risk management studies in a degree is to equip students with the skills and knowledge to identify, assess, and mitigate potential risks in various domains, enabling informed decision-making and safeguarding against adverse events.

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