Case Study: Las Margaritass

The goal of risk control is to reduce organizational expected property, liability, and human resource losses (Fraser and Simkins. 2010). Additionally, risk controls aids in making the annual loss experience more predictable. Loss control fights against risk by reducing the chance that a loss will occur or by decreasing the severity of a loss. According to Hoffman, it is important to identify the objective(s) of enhancing loss control (2007). Risk control involves loss prevention and mitigation strategies. Control measures include avoidance, loss control, separations, combinations, and some transfers. Avoidance, as a control measure, is applicable for property, person or activities. Avoidance occurs when there is a refusal to assume an exposure

One way for an organization to combine risk is through internal growth. For instance, a taxicab firm can increase the fleet, combination increases the number of exposure units. As it relates to Las Margaritas, the application of the combination method will best suit operational and reputational risk exposures. The idea behind this method is to increase the number of units or people, thereby reducing the risk. At Las Margaritas, having multiple servers will reduce the chances of a disgruntled employees causing a decrease in the quality of customer service, and disruption in orders and wait times. Additionally, this collaboration will flow into the firm’s reputation, as with the decrease in risk due to hiring more servers, the likelihood of the firm’s reputation being affected negatively, by the acts of one server, will also decreased. The accountable parties will be the employees and management. The employees are responsible for his or her action and if a manager observe or is informed by a customer or another employee regarding flaw with service or a particular server, it is the managers duty to provide corrective action to remedy the problem. This action may entail training. The intended outcome of pooling is to reduce the risk of reputational damage to the restaurant and increase the quality of service at the restaurant. An unintended

An example of transferring property or activity responsible for risk to someone else is when an organization sells a building it also transfers the associated ownership risk to the new owner. An example of transferring the risk but not the property or activity is a tenant transferring property damage of the landlord’s premises to the landlord. Risk control transfers can shift only property and human resource risks. As it relates to Las Margaritas, employing the transfer method will best suit the technology and capital risk exposures. The firm can transfer the responsibility of technology and web designing over to a web designer. Thus, any issues that arise from the faulty design of the website would be the responsibility of the web designer. Additionally, with paying for order item online, the responsibility will be transferred to a second party, like paypal, and all issues the occur regarding the customers concerns with charges will be the responsibility of the second party. Management will be accountable party. The intended outcome is for the website to increase the restaurants customer base and business. An unintended outcome will be the website is poorly designed and it causes more problems for the customers, thereby reducing the customer experience and possible eroding the reputation of the firm. Additionally,