Role Of Enterprise Risk Management
Google as a company aims at offering people with easy access to information all over the world. Various risks are involved that may have devastating effects not only to Google but also their clients. Since it is a global business that aims to ensure universal access to information, the risks vary from one point to another as regards to regulations and the client perception of confidentiality. Having the world’s largest engine, Google.com has made Google be a blue print in the business and this has presented it with volumes of opportunities and vulnerabilities. Goggle has witnessed growing profits but this is not an indication that it has a perfect risk management system
What risks does Google face?
Google is exposed to various risks that require diversified measures. Political risks are faced by the company as it operates universally. Governmental laws and regulations vary from one jurisdiction to the other and Google still has to offer services despite this fact. Google data protection applications in some instances find the law from different jurisdictions contrary to what the company provides for. In 2010 for example, it had to quit the Chinese mainland market because of conflicting policies on data protection and this led to drop in revenue.
Google offers online advertisement services. The economic uncertainties experienced in various countries poses a risk that could harm the business. When there is a slump in the economy, the clients cut down the advertising costs and so is Google’s revenue brought down. The wide range of advertising options offered by Google comes in place to ensure if one is less prioritized, then the other has more preferences and this tends to ensure the economic slumps do not have fatal impacts on the company’s revenues.
Technological risks are also faced by the company. New technologies come with lots of intellectual property. A harm to the intellectual property will in turn have high chances of causing harm to the company. When intellectual property is involved, laws that protect the intellectual property rights provide varied remedies depending on the jurisdiction. This may lead to suits that cost the company in terms of money and image. The technology is also fast growing and there is need to be on toes in terms of infrastructure. If the company cannot match the level of technological infrastructure needed to ensure its operations, then it may greatly suffer.
What risk management strategies are in place?
To solve the political risks, Google has devoted plenty of time and money to negotiate with the governments. In creating harmony with the variety of laws, Google blocks some access and contents so as to conform with the individual country laws.
Google has applied the gift economy trend which entails offering free services products to its end users. Marketing, research and development have also been the basis of mitigating against the economic risks. The purchase of Postini in 2007 ensures that the Information Technology provided email security against virus and hacking attacks.
In order to manage technological risks associated with IP, Google has come up with policies that discourage mining for videos that was done through open VLC player and has made payment to files applicable on its servers. Further it has adopted the Digital Millennium Copyright Act to reduce instances of violation of IP rights.