HRMM044 – BRP
How to Improve the Productivity of Financial Risk Management within Railway Telecom Industry of SaudiArabia
Student Name: Tasneem Ahmed
Student Number : 19437913
Table of Contents
Section 1 3
Introduction 3
Aims 3
Objectives 4
Research Questions 4
Approach to the Study 4
Section 2 4
Background 4
Section 3 5
Methodology 5
Research approach 5
Research Methods 6
Sampling 6
Place of Research 6
Data collection instrument 6
Data Analysis 6
Ethical Considerations 7
References 8
Section 1
Introduction
Financial risks are those direct risks which arise from the way a business and its cashflow is managed.Financial risks are those direct risks which arise from the way a business is handled, and the flowing of the money in and out of the business is managed. Financial risk management is also used for reflecting the ability of the company to be able to manage its financial leverage and debt [ CITATION Muh171 l 1033 ]. Like every country, Saudi Arabia also operates with an effective railway sector which has been focused on transporting people as well as goods from one place to another. The railway industry is one of the most important industries in every country where it makes a significant contribution towards the economy. In the movement of the trains, and to avoid any hazards and risks, railways use signalling and telecommunication as a medium to facilitate the smooth functioning of trains. The responsibility of signalling and telecommunication is undertaken by the Railway Telecom Industry that operates within the railway sector. The Railway Telecom industry is responsible for the construction and management of signalling and telecommunication to ensure the smooth functioning of the railway sector [ CITATION Hai181 l 1033 ]. However, the industry has been experiencing increasing expenses on daily basis whereby the industry has been running into losses. If the telecom industry would continue to run under losses, it will result in the deterioration of the potential of the industry. The Financial Risk Management Department within the Industry is not able to plan for the future risks which has been a major concern of the performance of this industry. Hence, this proposal provides an overview of the research plan that will be undertaken in order to undertake research to identifyon the factors which are affecting the effectiveness of Financial Risk Management within the Railway Telecom Industry of Saudi Arabia.
Aims
The primary aim of this research will be to identify the factors which are affecting the effectiveness of the Financial Risk Management within the Railway Telecom Industry, and will then evaluate that what processes or actions can be undertaken to mitigate such factors and improve the quality of Financial Risk Management. By improving the quality and effectiveness of financial risk management, the industry can attain some level of financial stability which will help them to avoid huge losses in the coming future.
Objectives
- To identify the factors which contribute to the management of financial risk within the Railway Telecom Industry of Saudi Arabia
- To identify measures which can be undertaken to improve the effectiveness of the management of financial risk in the Railway Telecom Industry.
Research Questions
- What are the factors which are affecting financial risk management in the Railway Telecom Industry of Saudi Arabia?
- What steps can be undertaken for improving the effectiveness of financial risk management in the Railway Telecom Industry.
Approach to the Study
The research will use a deductive approach and exploratory research. A quantitative research method will be used to collect data using a survey questionnaire [ CITATION Lis161 l 1033 ]. The quantitative research will help to collect data in numerical terms which will facilitate the conclusion of the research and thereby obtaining the expected outcomes. Furthermore, since this research will involve human element, hence, the researcher will ensure that the autonomy of the respondents will not be affected in any manner. Moreover, an ethical consent will be obtained from the respondents before proceeding with the research.
Section 2
Background
As highlighted by Horcher (2011), financial risk usually arises because of the number of transactions of financial nature, including purchases and sales, loans and investments, and the various other business activities [ CITATION Hor11 l 1033 ]. The financial risks may arise because of the legal transactions, mergers and acquisitions, new projects, energy component of costs, debt financing, or through the management activities, competitors, stakeholders, weather or foreign governments. Bartram, et al., (2015) highlighted that when the financial prices change in a significant manner, it may increase the costs, while reducing the revenues or may impact the profitability adversely of an organisation [ CITATION Bar151 l 1033 ]. The financial fluctuations may make it more difficult to be able to budget and plan, the services and the prices of goods and to allocate capital.
Financial risk management can be referred to as a process to deal with the uncertainties which are likely to result from the financial markets. Nair, et al., (2014) provides that this involves the assessment of the financial risks being faced by an organisation and developing the management strategies which will be consistent with the policies and internal priorities [ CITATION Gir14 l 1033 ].
Addressing the financial risks in a proactive manner may offer an organisation with a competitive advantage. It further ensures that the operational staff, management, stakeholders as well as the board of directors would be in agreement over the key issues of risk. Managing the financial risks may necessitate the undertaking of organisational decisions in respect to risks which are acceptable versus those which are not. Dinu (2014), reported that the passive strategy to take no action may be referred to as the acceptance of all of the risks by default [ CITATION Ana141 l 1033 ]. The organisations manage the financial risks by using several different products and strategies. It is essential to understand that how these strategies and products would be working in order to reduce the risks in context of the risk tolerance as well as the objectives of the organisation.
It has been argued by Cendrowski and Mair (2009) that in order to make the financial risk management effective, it would imperative that the executives and the managers would be treating the two concepts as intertwined [ CITATION Cen09 l 1033 ]. The authors attribute their arguments to the fact that the risk management is focused on influencing the effectiveness of financial risk management to the same extent that is done by the financial risk management to the general process of management of risk.
However, when financial risk management tends to be effective, Razali, Yazid & Tahir (2011) have indicated that the overall positive effects would be linked with the sustainable growth and improvement of operational efficiency [ CITATION Bon161 l 1033 ].
Section 3
Methodology
Research approach
The research approach acts as a guide map for the researcher on the basis of which a researcher can undertake the research. In order to conduct this research, the researcher will be using a deductive approach which will be focused on exploratory research [ CITATION Wil101 l 1033 ]. The researcher will be using the primary research to undertake this research so that the first-hand information can be obtained.
Research Methods
The research method for data collection will be quantitative method because it will help to collect data in quantified terms which will be in numerical terms which will facilitate the research results and the data can be compared effectively [ CITATION Ell173 l 1033 ].
Sampling
The overall population is not large, where the people working in the financial risk management department of Saudi Arabia are almost 30 employees. Hence, the overall population is not so large, hence, the researcher will be conducting the research will all of the employees which will help to obtain the required data in an effective manner.
Place of Research
The research will be conducted at the Damman railway station which is the headquarters of Saudi Railway Organisation. The chairperson will be approached and prior permission will be obtained to conduct the research at the office itself in 3 days where 10 respondents per day will be asked to provide responses to the questionnaire.
Data collection instrument
The data for this research will be collected using survey questionnaire which is one of the most effective medium of collecting data in quantitative terms. The questionnaire will consist of 10-15 questions which will be closed ended multiple choice questions which the respondents will be required to answer [ CITATION SRo12 l 1033 ]. The questionnaire will be web-based where the questionnaire will be created using Google forms To ensure the reliability and validity issues, the researcher will collect the responses and the responses will then be stored on the Google Forms server which will be accessible by the researcher only and will not be tempered or manipulated in any manner.
Data Analysis
The data collected will be in numerical terms and in order to analyse the data, the researcher will be using statistical tools where the data will be compiled in the tables and will be analysed using the measures of central tendency. The data will then be represented using pie charts, and graphs for better understanding.
Ethical Considerations
In order to collect data, the researcher will be required to consider the ethical considerations. The researcher will ensure the anonymity of the respondents where the personal information will not be shared with any third party, and the respondents will not be forced to answer any question. A consent form will be taken into consideration prior to the collection of data where the researcher will ensure that all the details pertaining to the research are provided effectively to the respondents and the respondents have been informed about the process of opting out of the research anytime.
References
Anwar, M., 2017. Financial Risk Management Practices in Financial and Non-Financial Firms; Survey of Pakistani Firms. SSRN Electronic Journal, Volume 5, pp. 1-28.
Bartram, S. M., Brown, G. W. & Waller, W., 2015. How Important Is Financial Risk?. Journal of Financial and Quantitative Analysis, 50(4), pp. 801-824.
Boeren, E., 2017. The Methodological Underdog: A Review of Quantitative Research in the Key Adult Education Journals. Adult Education Quarterly, 68(1).
Boniface, O., 2016. Financial Risks Management in Public Sector Organisations. Research Journal of Finance and Accounting, 7(1), pp. 94-106.
Cendrowski, H. & Mair, W. C., 2009. Enterprise Risk Management and COSO: A Guide for Directors, Executives and Practitioners. London: John Wiley & Sons.
Dinu, A. M., 2014. Risk in Financial Transactions and Financial Risk Management. Procedia – Social and Behavioral Sciences, Volume 116, pp. 2458-2461.
Horcher, K. A., 2011. Essentials of Financial Risk Management. New Jersey: John Wiley & Sons.
Liu, L., 2016. Using Generic Inductive Approach in Qualitative Educational Research: A Case Study Analysis. Journal of Education and Learning, 5(2), pp. 129-135.
Nair, G. K., Purohit, H. & Choudhary, N., 2014. Influence of Risk Management on Performance: An Empirical Study of International Islamic Bank. International Journal of Economics and Financial Issues, 4(3), pp. 549-563.
Roopa, S. & Satya, R. M., 2012. Questionnaire Designing for a Survey. The Journal of Indian Orthodontic Society, 46(4), pp. 37-41.
Song, H. & Schnieder, E., 2018. Development and Evaluation procedure of the Train-centric Communication based System. IEEE Transactions on Vehicular Technology, Volume 99, pp. 1-8.
Wilson, J., 2010. Essentials of Business Research: A Guide to Doing Your Research Project. SAGE Publications, p. 7.
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