The Risk Assessment of General Electric

General Electric is a large multinational supplier of electric appliances incorporated in New York, United States of America. Currently, the company operates in the following segments. Appliances, oil and gas, healthcare, energy management, and transportation. With investments in many business sectors, General Electric need an investment in the communication industry.

The communication industry is developing with great potential to grow exponentially. An additional department focusing on communication will improve the effectiveness and efficiency of the organization. Establishing a communication department will bring along some business challenges and problems.

Estimating the cash flow of the project that might originate from the project and how to finance the project. Some of the factors that affect the implementation and financing of communication department in General Electric include risk, cost, politics, and public relation. Finding a way to handle the issues related to implementing a new service or product in the communication sector could ease the process of the project.

The risk of failing is the main problem in starting projects.

Communication industry has well-established companies that could lead to steep competition and minimum chances of taking over the communication industry. Communication industry tightly depends on the trust and confidence of the target group to purchase products and services. General Electric Company could introduce communication services and products such as mobile phones, computers, internet provider services, and other communication products. The other risks involved in implementing the communication service and products build up from the risk of failing. Losing the money invested in the project could be a disadvantage to the company and its stakeholders.

Get quality help now

Doctor Jennifer

Verified

Proficient in: Risk Assessment

5 (893)

“ Thank you so much for accepting my assignment the night before it was due. I look forward to working with you moving forward ”

+84 relevant experts are online

Hire writer

The risk of stagnant development should be considered when dealing with a communication project for the first time. Well-established companies that provide the communication services could pose threat to the development of the project. Losing the funds and energy used to implement the new project or communication services sum up the total risks involved in the process (Koller, 2005).

Analysis of the risk involved will help in making good decisions and better organization of funds. The starting capital or cost is also one of the main problems that the company will face during the start period. Communication as a business requires much capital that will kick-start the business. Purchasing materials for making communication products such as mobile phones could raise the cost of operation. Employment Information Technology experts could also lead to an increment in cost of business. For that the company to give quality services to its clients experienced experts and quality input should be a priority. General Electric Company should incur extra charges to pay employees with extra knowledge and experience. With all the business preparation activities, the budget to finance the communication project will include a huge amount of cash. Due to the high cost of starting the communication department in General Electric organization strategy, it will be a challenge to pass a proposal to the committees.

There will be high chances of rejection due to many other projects that the company is undertaking. It may also take time and close consideration of the proposal before the committee approves it. Every project needs analysis and, therefore, implementation of the communication service as investment or project by General Electric will have to take time. The committee will consider factors such as profits and other benefits the company will gain from the new service. Every organization need to embrace current activities and, besides, long-haul ventures keeping in mind the end goal to enhance their operations and build their proficiency. Current undertakings and long-haul ventures can be recognized on the premise of a spending plan, asset, effect and degree (Chan Ho, & Ferran, 2014).

Financial Plan

As present undertakings are by and large little, they require fewer finances than long-haul ventures, however, this may not be valid on the off chance that crises and catastrophe recuperation venture. As present tasks are more incessant and require less spending plan, they require fewer endorsements than long-haul ventures which, as a rule, requires more endorsements.

Assets

Assets required for current task relies on whether the specific undertaking is mandatory or routine operative venture must be actualized. Then again, long haul activities require an assortment of assets over its venture improvement cycle.

Sway

Current activities normally have restricted effect on the firm. Current ventures are, for the most part, to solve operating issues and are dispersed once the issue is explained, whereas long haul undertakings have a tremendous effect on the money streams of the organization since long haul tasks may include huge changes in the business of an organization. Changes in real money streams could be certain or negative contingent upon achievement or disappointment of long-haul venture.

Scope

Long haul activities are normally more mind boggling and have a more extensive degree. Long term ventures are influenced by different inner and outside elements such as a critical strategy choice by a government. These elements may affect the long haul undertaking of a firm whereas the present task does not cover more extensive degree and are for the most part impacted by inside variables of the firm. Short term financing best fit current projects that the organization is undertaking. The outlet for financing current projects is the Commercial Paper, letter for credit, and account receivables funding options. The best for General Electric Company is the account receivable method. The account receivables have significant advantages over the others. Financing the project through record receivables does not involve credit assessment of the company. Subsequently process is less convoluted.

Second, organizations by and large do not pay enthusiasm on record receivables. Therefore, the cost of funding is negligible. Account receivables guarantee a smooth stream of operations with no liquidity issues. There exist three ways of funding long-term projects. The best ways to handle the finance of a long-term project include loans, an issue of equity to advance financing, and through retained earnings. General Electrics could opt for retained eamings for funding long-term projects. Retained income are promptly accessible with the organization and organization cannot experience floatation taken a toll. Second, as held income is a type of value in this manner, the danger of venture lies with the investors (Parrino, Kidwell, Murray, Dempsey, Morkel- Kingsbury, & Au Yong, 2011).