Walmart: The Risk Management Plan

Risk management is a process whereby a company identifies, assesses, and controls its earnings and capital threats. The risks can result from legal liabilities, financial uncertainties, strategic management errors, technology errors, natural disasters, or accidents. Risk management is termed as an essential element of good governance and management. It consists of steps that, when applied in sequence, allow continual enhancement in making decisions. Every organization has its methods of preventing and managing risks during its operations. Walmart Company, an American multinational retail corporation consisting of discounted departmental stores, a chain of hypermarkets, and grocery stores, have established a particular strategy to deal with risk management.

Walmart has effectively executed a risk management plan in their daily operations, which has been of high benefit. The risk management plan has helped the company identify clear deliverables that are directly related to risk mitigation, hence enabling the team to focus on the crucial risk areas. The method used by Walmart to manage risks involves a program that consists of a five-step process. The steps include risk identification, mitigation, planning, performance metrics, and investment return.

In the risk identification step, a risk map is used in evaluation whereby Y-axis represents impacts, and X-axis represents the risk probability hence prioritizing Walmart’s most significant seen risks. The risk mitigation step involves conducting a creative list of existing procedures to address particular risks. The action planning step is whereby projects teams create simple project plans identifying the responsibilities of every person. On the performance metrics step, the project plan implemented in the planning step is measured to determine whether they negatively impact specific risks. The last step, return on investment, involves evaluating whether or not a project can lower expenses or increase sales. The five-step technique helps the company ensure that the decisions that positively affect it do not put its shareholders at risk. Risk management is a new concept, and it is finding its way into the functions of many firms. Therefore, a company such as Walmart understands the value of having a suitable risk management method hence increasing its visibility.


Asperti, N., Vedovati, G., & Vuerich, L. (2020). Enterprise risk management in Walmart and Target. Web.

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