Module Overview:
Economically, the world is getting smaller. Companies depend more and more on international markets to sell goods and services. The more complex the economic system, the harder it is to project the future, especially, understand the risks associated with investments.
As a manager, you must respond and build flexibility into your company to best adapt to the changing environment. You should make projections and plan for contingencies to maximize the probability of success. For example, a company may own several different lines of hotels, high-end expensive hotels and lower-end casual hotels designed for long distance travelers and families. Based on budgets and forecasts, management may want to focus marketing and promotion efforts on business travels at the high-end expensive hotels. What if there is an unexpected economic turn where business travelers from targeted clients have budgets significantly cut and cannot stay at these expensive hotels anymore? Management may quickly need to change the marketing efforts and begin to invest in tools that will attract more casual guests and markets into your high-end products for lower rates, which will reduce profitability, but keep rooms filled at a volume significant enough to cover costs.
In this module, you will be introduced to the principles of risk, and how they impact supply, demand, price, and ultimately investor returns.
Module Readings
Complete the following readings early in the module:
- Module overview
- From your course textbook, Managerial economics: Economic tools for today’s decision makers, read the following chapters:
- Demand Estimation and Forecasting
- The Theory and Estimation of Production
- The Theory and Estimation of Cost
- From the Argosy University online library resources, read:
- Lawler, E. E., III, & Toole, E. (Eds.). America at work: Choices and challenges. Gordonsville, VA: Palgrave Macmillan. Retrieved from http://site.ebrary.com.libproxy.edmc.edu/lib/argosy/docDetail.action?docID=10150440
Assignment: Discussion—Assessment of Risks
Risks are common for all firms, but there are different levels of risks in different industries and in different countries. The differences in risks from firm to firm or industry to industry are called unsystematic risks. Consequently, individual firms and industries deal with risks in different ways.
Tasks:
Consider two companies that deal in two entirely different industries, such as Microsoft, which is a technology company, and Caterpillar Inc., which manufactures heavy equipment.
Respond to the following questions:
- Explain how the risks and the approaches to anticipate these risks differ for each company.
- Analyze the kinds of risks that are most intimidating for each.
Submission Details:
- By Friday November 2, 2018, post your responses in a minimum of 500 words to this Discussion Area. Support your assumptions with reputable source material While responding, consider how the companies selected should mitigate their risks. How do these companies mitigate their risks during periods of greater uncertainty? What are some of the ways to assess these risks?
Write your initial response in 300–500 words. turned-in on time, Grading criteria followed All assignment qualifications addressed correctly, Grading Criteria followed, Include Question followed by the answer Reference Page Included Cover page Included, Paragraphs Indented, Running-head included, main heading should be centered; all new paragraphs should be indented; paper should be right ragged, not right justified; references, should always go on a standalone page. abstracts are not usually indented; acronyms should be spelled out when using them for the first time, for example HR. references as listed are APA standard. When you submit your papers through turnitin.com, your overall similarity index score should not be exceedingly high, with ten to fifteen percent being the maximum, Please make sure your APA formatting of citations. I have provided the APA resource cite for you. https://owl.english.purdue.edu/owl/resource/560/01, Please work on using literature within the span of the last 5 years, keep in mind there should not be any one, two, or three sentence paragraphs Your response should be thorough and address all components of the discussion question in detail, include citations of all sources, where needed, according to the APA Style, and demonstrate accurate spelling, grammar, and punctuation.
Do the following when responding:
- Read your answers.
- Provide substantive comments by
- contributing new, relevant information from course readings, Web sites, or other sources;
- building on the remarks or questions; or
- sharing practical examples of key concepts from your professional or personal experiences
- Respond to feedback on your posting and provide feedback to their ideas.
- Make sure your writing
- is clear, concise, and organized;
- demonstrates ethical scholarship in accurate representation and attribution of sources; and
- displays accurate spelling, grammar, and punctuation.
Grading Criteria:
Quality of initial posting, including fulfillment of assignment instructions
Reference to supporting readings and other materials
Language and grammar
