MGMT 311 Assignment Week 6MANAGING RISK: KODAKS DEMISE 2Managing risk is essential to the success of an organization. Not having an effective risk management plan can have adverse effects on an organization. Business Dictionary defines risk as a probability or threat of damage, injury, liability or loss (Risk, n.d.). When digital technology was created, Kodak failed to use accurate information regarding how the product would perform in the market. This failure to act on potential risks and opportunities caused the leadership to not make the right strategic choices for the organization and resulted in the company filing for bankruptcy in January of 2012. A risk management plan identifies risks as well as potential ways to avoid them. This process helps ensure the organization is stable and safe. Financial risk management deals with assessing the financial risks that an organization may be facing and developing strategies that are consistent with their policies to address the risk (Horcher, 2005). Enterprise risk management allows organizations to identify and manage all risks in an integrated manner. Risk assessments are based on a thorough understanding of the business, its customers, and the organizations strategic objectives. Vince Barabba, a former Kodak executive states that in 1981 the company conducted very detailed research regarding digital photography. The study gave Kodak information that indicated that digital photography could replace their established film business. The study additionally stated an estimated time of ten years for digital photography to integrate into the market and outlined several steps Kodak could take to prepare for this new market (Barabba, 2011). Leaders at Kodak failed to make proper decisions and implement strategic plans in response to the information received and this eventually led to the organization filing for bankruptcy..