A Discussion on Risk Managament

Risk management is the organized method of identifying, analyzing and the preceding approval or alleviation of doubt in any form of investment decision making. Fundamentally, the process of risk management takes place whenever any investor or a fund manager examines and tries to measure the probability for incurring losses in any form of investment thereafter chooses the suitable act taking into consideration all investment objectives and risks. In the last few decades, Poland has had a couple of risky incidences, actual or projected, that called for proper management so as to restore calm and order.

The purpose of this report is to analyze all national and international threats to Poland focusing mainly on the assessment sphere of risk management. The report will highlight past events in all aspects of life, that is, political, economical, military and religious developments that have posed as a threat to Poland. This research will be relevant in learning about past developments or events that posed or were seen as threats and studying how these threats were handled back in the day in order to improve on the present society if similar threats whether real or perceived were to occur.

Risk management is vital in any level as insufficient risk management skills may lead to harsh costs for firms and individuals as well. A good example to illustrate this is the 2008 recession that affected almost every country in the world. The recession is seen to have largely originated from loose credit risk management practices of financial companies and large firms (Nanto 2009).

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Had there been proper practices of risk management, maybe the world would have escaped the recession period and saved billions of dollars incurred in the recovery period. Risk management guarantees that any firm or organization recognizes and understands all risks to which it is prone to.

This study has carried out research on benefits and consequences of good risk management practices to any firm, institution or country using Poland’s economical, political, cultural and military threats as the sole example. The research has worked on the definition, identified types of risks, and analyzed the goals and processes for managing risks and finally the strategies used in management of risks. The report is compiled systematically through thorough data and literature review that explain concepts and give chronological episodes in Poland. These events are then used to carry out historical, contextual and behavioral assessment of Poland national and international threats in relation to risk management.

The article “Behavior-based safety in Industry: Realizing the large-scale potential of psychology to promote human welfare, Applied and preventive psychology” was most useful in the research on human behavior. Similarly, “The Global Financial Crisis: Analysis and Policy Implications” by Dick K. Nanto proved a good source in the study about the recent financial crisis.

Historical Assessment

In the late 1970’s, there erupted rampant disorder and strikes in the port cities of Gdansk, Gdynia, and Szczecin (Hunter 2010). This social unrest was fuelled by increase in prices of necessary consumer goods, particularly food prices, making it an economical crisis. The events portrayed deep discontent to the living and working environment in the country.

In 1978, Cardinal Karol Wojtyla, the Bishop of Krakow was appointed Pope John Paul II, leader of the international Roman Catholic Church. This event was greatly rejoiced in Poland by Catholics who expressed joy at the promotion of a Pole to the much coveted papacy and welcomed his 1979 visit to their country with an outburst of passion (Hunter 2010).

In 1980, Polish’ foreign debt stood at more than $20 billion. The Polish government attempted to raise meat prices in the country spurring a series of strikes practically paralyzing the Baltic coast by end August and shut down majority of coal mines in Silesia. Poland had entered an extensive crisis which would transform the route of its prospective development (Hunter 2010).1980 also marked the signing of an accord by workers at the Lenin Shipyard in Gdansk with the state which brought the strike to a halt. Related contracts were also signed at Szczecin and in Silesia guaranteeing the workers’ right to structure self-governing trade unions and the freedom to strike. Due to mismanagement of funds and corruption in the industrious 1980, Gierek was substituted by Stanislaw Kania as the First Secretary. The prevalent strikes in 1980 caused the organizing and formation of the independent labor unions cohesion.

The whole of Poland was in disturbances and this resulted in declaration of martial law in 1981 with all liberty reduced. Curfews, private mail monitoring, suspension of schools, travel bans, strikes bans and communication cuts were imposed to all citizens. Participating affiliates of Solidarity or other self

regulating organizations were victimized, detained, and often exiled. Economic sanctions were imposed on Poland by the US and other western countries in a bid to prompt normal operations and liberty in Poland. Unrest and chaos in Poland persisted for numerous years thereafter (Hunter 2010).

1982, the oppressive martial law was lifted and a few political detainees were released but even after the official ending of the martial law, a group of prisoners remained in detention. In 1984, another amnesty was announced and almost every political detainee was released but still, solidarity activists were being harassed by government officials and security personnel. The solidarity union was banned.

The government’s failure to preclude Poland’s economic setback resulted in another wave of unrest and strikes all over Poland in 1988. In an effort to manage the state of affairs, the government issued de facto acknowledgment to Solidarity. Round table talks commenced in 1989 to try and break the dead lock between the communists and non-communists. These talks led to the creation of a lower house in parliament called the Sejm. In the same year, the Sejm voted approval of Prime Minister Mazowiecki and his cabinet to form the first ever non-communist led government.

Towards the end of 1989, the Sejm accepted the government’s restructuring program to convert the Polish economy swiftly from a centrally designed to free market economy. The constitution also underwent amendments to do away with references to the dictatorial role of the Communist Party thereby renaming Poland as the “Republic of Poland.”

In 1990, the constitution was changed to cut back the term of President Jaruzelski. Later that year, Lech Walesa became the first popularly elected President of Poland. The country made tremendous improvement toward attaining a fully democratic government and a free market economy. Freedom of speech, liberty of religion, assembly, and the freedom of the press were established. Numerous political parties were also established to mark democracy in Poland.

Olszewski at the request of the president managed to put together a coalition government which however received a vote of no confidence in 1992. In the same year, Soviet troops began to leave Poland. Another government was formed and later an ideological difference between coalition partners arose causing the president to dissolve parliament in 1993. Market reforms continued to be implemented thereby improving Poland’s economic position (Hunter 2010).

In 1994, Poland joined NATO’s Partnership for a Peace programme. This marked a first major political initiative. In 1995, Aleksander Kwasniewski who was once a Communist barely beat Lech Walesa in the democratic presidential elections. In an effort to improve democracy, Polish parliament adopted a new constitution in 1997. Later in 1998, the European Union began talks with Poland which joined NATO in 1999.

In 2000 Aleksander Kwasniewski was re-elected as the president of the republic of Poland. In 2001 citizens were allowed to view their own files kept by the secret police in the past communist regime. Later that year, a new coalition between the Democratic Left Alliance (SLD) and the Peasants’ Party formed the government with SLD leader Leszek Miller becoming the prime minister.

A natural disaster in form of the European floods hit Poland in 2002 (Brussels 2005). Floods that was as a result of a whole week of continuous heavy downpour that eventually wreaked havoc in Europe killing many, destroying properties owned by thousands of Polish citizens, and resulting in damage in billions of Euros in European nations of the Czech Republic, Austria, Germany, Slovakia, Poland, Hungary, Romania and Croatia (Brussels 2005). In the same year 2002, Poland officially received an invite from the Copenhagen summit to join the EU later in 2004. In 2003Polish citizens voted in a referendum in favor of joining the EU and in 2004 Poland became one of the ten new states to join the EU.

In 2008 The Polish government creates an accord with the US in standard to host a contentious American missile defense system. Later the same year, Poland’s last Communist leader, General Wojciech Jaruzelski, is on trial in over the 1981martial law. To withstand the prevailing global economic crisis, the IMF grants Poland $20.6 billion. A plane accident in 2010 kills President Lech Kaczynski and several senior officials (Hunter 2010).