Homework Question on Operational Risk
- One of the reasons companies do not have appropriate security is because they do not have an accurate assessment of what is at risk.
- Briefly describe a company that has an operational risk related to electronic commerce (you can create what the risk might be), then consider how you might manage the risk by making operating procedures to prevent the vulnerability existing.
- The one page assignment should include;
- A description of what the operational risk is and the ways it can be exploited,
- An explanation of the how the risk relates to electronic commence, and
- An explanation of what procedures should be put in place to manage the risk.
- If you use a real-life company as a model, make sure you clearly explain the difference between your writing, and your reference.
Homework Answer on Operational Risk
Virgin Atlantic Company deals with the sale of air tickets online for air travel. The operational risk of a business engaged in electronic commerce refers to the risks associated with business activities such as purchasing, sales, and marketing, and some of the risks involved are discussed below. The first risk is that web page content is exposed to libel, slander, and defamation of character. This is where the use of e-commerce may lead to unexpected liability due to interference with a company’s web page.
Another risk is the exposure of business information to a country that may violate its local laws governing business operations. Lastly, we find that the conduct of payments and confidential transaction information from the company website may be invaded by hackers, resulting in improper use of a company’s private information. Hackers use the company’s information to deprive the customers and destruct the operations of the business.
They also exploit the company’s private information to their own advantage, leading to unprecedented liability for the company; this may result to losses and lawsuits against the enterprise.These risks are related to electronic commerce due to the fact that they are associated with the increased use of internet in conducting business transactions. They can be prevented from occurring by using electronic commerce risk management systems (Girling, 2013).