Risk Type and Trends at Banks

Risk Types and Trends in Business

Tim Amundson

Rasmussen College

Author Note

This paper is being submitted on February 20, 2016, for Dr. Roy Viar IV RMI4020-06 Risk Management course.

Risk Types and Trends in Business

Headquartered in Watsonville, California, Granite Construction Inc., (NYSE: GVA) is a full-service general contractor, construction management firm and construction materials producer. There are many risks that Granite Construction (reference 1 check notes) Inc. may encounter throughout the process of the project. Risks begin before even starting the project. There is a lot of planning before even submitting a bid, and I believe that it begins when the RFP is sent out to prospective bidders.

Many strategic risks must be taken when taking on a project or even before the project is awarded. What should they bid? Looking back on previous projects, what were the considerations that were made in placing similar bids? What would their competitors bid? The price of fuel has decreased so I must take into account that when I am looking for sub-contractors and how that will factor into the bid. How many man-hours will this project take and do they have the capacity to take on this project without adding additional employees which in turn would lead to additional payroll costs and workers compensation costs. I would assume that they would study a complex multifactor productivity equation to run the numbers, analyze the data and make an informed decision on the results to make a competitive bid on the project. Back to the decision on if they have the capacity to take on this job. If they take on a large project, are they running the risk of neglecting other clients and their projects? If the answer is yes, then they have to look at the negative impact on the company as a whole. This would be known as Risk Reputation.

According to Investopedia.com, (reference 2) Operational Risk can be thought of as a human risk. It is the risks...