Although we may not realize it, we assess risk every day of our lives. Is it safe to cross the street? Should I eat a healthy salad or throw caution to the wind and eat a cheeseburger for lunch? Can I postpone getting new brakes for the car? To make decisions, we analyze our options and make assessments based on possible benefits versus potential harm.
Decision-making in the business world is similar, but risk analysis takes place on a much larger scale under more serious circumstances. If a company makes a bad choice, it risks losing enormous sums of money, its market share and hundreds or even thousands of jobs, depending on the organization’s size. High stakes spur both large and small businesses to invest significant time and energy on financial risk management.
The goal, however, is not always to avoid risks. Taking chances is vital to the health of any enterprise because it is the only way to grow and gain competitive advantages. Taking a chance on global expansion and launching new products can be necessary gambles. Yet, while risks are required, it is essential to minimize the potential fallout mistakes can cause. Business leaders can learn how to manage and leverage financial risk for organizational gain through specialized, advanced degree programs like the online Master of Business Administration (MBA) with a Concentration in Finance from Texas A&M University-Corpus Christi (TAMU-CC).
Types of Financial Risk Businesses Face
Executives who oversee financial risk management strategies must generally consider four main categories: market risk, credit risk, liquidity risk and operational risk.
In terms of market risk, good financial risk management means understanding the marketplace and anticipating challenges from your competitors. Understanding an enterprise’s credit risk begins with accurately measuring your company’s capital and debt capacity. Similarly, a risk manager should know how readily a business can liquefy its assets and what policy or legal issues may arise if a company moves in a new direction.
As with poorly managed liquidity risk and recent bank collapses, Instability and fluctuations in inflation and interest rates — along with technological developments and other factors — put the challenges of risk management in the news in 2023. Those who work in financial risk management must be able to identify and address these potential vulnerabilities and developments rapidly while proactively establishing systems that protect companies from possible financial, legal and operational threats.
Honing Your Financial Acumen
Few career paths in business are as exciting — or as challenging — as financial risk management. Which risks are worth taking? Which risks should you avoid? It can be tremendously satisfying to play a pivotal role in making these decisions.
Earning an MBA in finance is one of the best ways to develop the right skills and financial knowledge to manage a company’s ventures. The demand for executives with superior financial skills is great in a global marketplace where competition is fierce and companies must take risks to thrive. For instance, the U.S. Bureau of Labor Statistics (BLS) projects that employment of financial managers will grow 16% between 2022 and 2032 — much faster than the average of all occupations. Plus, finance experts are needed to drive success in all industries, for all types of organizations, across the globe.
Solve Financial Challenges With an Online MBA in Finance Degree
To meet the needs of the marketplace, universities like TAMU-CC offer specialized MBA programs that focus on finance. TAMU-CC’s online MBA in Finance program offers graduates in-depth instruction in areas such as multinational finance, investment, financial markets and institutions and personal financial planning. The program helps students develop the skills they need to guide organizations through the challenges of the future.
Designed for professionals who want to advance their careers and increase their earning potential, TAMU-CC’s MBA in Finance is available as an online degree. Busy professionals can enjoy the flexibility of completing coursework from home without interrupting their personal and professional lives.
Working in financial risk management can be a rewarding career for those with the right skills and vision to face fiscal challenges with confidence.
Learn more about the TAMU-CC online MBA with a Concentration in Finance program.
