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Risk and risk management
Corporate Strategy and Risk Management Chapter 6 Risk and Risk Management, the risk management process includes: collecting information, risk assessment, specifying risk management strategies, proposing and implementing risk management solutions, supervision and improvement of risk management, let’s look at it together.
Edited at 2023-04-10 11:48:50- bacteria
This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
- Plant asexual reproduction
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
- Reproductive development of animals
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
Risk and risk management
- bacteria
This is a mind map about bacteria, and its main contents include: overview, morphology, types, structure, reproduction, distribution, application, and expansion. The summary is comprehensive and meticulous, suitable as review materials.
- Plant asexual reproduction
This is a mind map about plant asexual reproduction, and its main contents include: concept, spore reproduction, vegetative reproduction, tissue culture, and buds. The summary is comprehensive and meticulous, suitable as review materials.
- Reproductive development of animals
This is a mind map about the reproductive development of animals, and its main contents include: insects, frogs, birds, sexual reproduction, and asexual reproduction. The summary is comprehensive and meticulous, suitable as review materials.
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Risk and risk management
concept of risk
Corporate risk is related to corporate strategy Risk is a series of possible outcomes [not understood as the most likely to occur] Risks are both objective and subjective Risks often coexist with opportunities
Main internal risks faced by enterprises
strategic risk
The possibility and loss of the overall loss of the enterprise and the inability to achieve strategic goals due to the complexity and variability of the internal and external environment and the limited cognitive and adaptive capabilities of the subject to the environment.
Lack of clear strategy or inadequate implementation of development strategy Development strategy is too radical Development strategies frequently change due to subjective reasons
operational risk
"Comprehensive Risk Management Guidelines for Central Enterprises"
Risks that may arise from corporate product structure and new product development [output side] Enterprises develop new markets and risks that may arise from marketing strategies [Market] Enterprise organizational structure, management status, corporate culture, and cognitive structure of middle and high-level managers [management, culture, people] Risks caused by errors in futures and other derivatives business Risks caused by errors in quality, safety, environmental protection, information security and other management Risks caused by moral hazard of internal and external personnel or errors in business control systems Risks such as natural disasters that cause losses to enterprises [natural disasters] Risks arising from the supervision of the company's existing business processes and information system operations
Major operational risks from an internal control perspective
Organization
Governance structure is ineffective The internal organization design is unscientific and the distribution of powers and responsibilities is unreasonable.
human Resources
Lack or excess, unreasonable structure, imperfect development mechanism The human resources incentive and restraint system is unreasonable and the management of personnel in key positions is imperfect. Improper human resources exit mechanism
social responsibility
Production safety measures are not in place and responsibilities are not fulfilled [Safe production] Poor product quality, infringing on consumer interests [Product Quality] Insufficient investment in environmental protection results in high resource consumption, causing environmental pollution Inadequate employment promotion and employee rights protection
company culture
Lack of positive corporate culture Lack of innovation, teamwork and risk awareness Lack of honest and trustworthy business philosophy ignore cultural differences
Procurement business
The procurement plan arrangement is unreasonable Improper supplier selection and unreasonable procurement methods Purchase acceptance failed and payment review not strict
asset Management
Inventory overstock shortage Inadequate renovation and renovation of fixed assets Intangible asset issues
sales obligation
Market forecasts are inaccurate Customer information management is not in place Fraud exists in the sales process
research and development
Innovation projects are unscientific or have insufficient demonstration Unreasonable allocation of R&D personnel or poor management of the R&D process Insufficient application of R&D results
Insufficient engineering
Guarantee business
Business outsourcing
Contract management
internal information transfer
Financial risk
Total budget
No budget or incomplete budget The goals are unreasonable and the preparation is unscientific. Lack of rigidity in budget and implementation issues
Funding activities
Poor funding decisions Wrong investment decisions Fund allocation is unreasonable Lack of strict control over financial activities
financial report
Compilation of financial reports in violation of regulations Providing false financial reports Failure to use financial reporting effectively
Main external risks faced by enterprises
Political Risk [National Policy]
Legal Risk
Legal Risk [Civil Liability]
Compliance Risk [Administrative Responsibility]
sociocultural risks
Cultural risks caused by transnational business activities
Cultural risks caused by corporate mergers and acquisitions
Cultural risks caused by factors within the organization
technology risk
Technical design risks
Technology R&D Risks
Technology application risks
market risk
Risks arising from changes in price, supply and demand of products or services
Risks arising from changes in the adequacy, stability and price of material supplies
Credit risk of customers and suppliers
Risks arising from changes in tax policies, interest rates, exchange rates, and stock price indexes
Risks from potential entrants, competitors, and competition with substitutes
risk management process
collect information
Important information that should be collected to analyze the five risks of strategy, finance, market, operation, and legal
risk assessment
Risk identification---Risk analysis---Risk evaluation
Specify risk management strategies
Determine risk preference, risk tolerance, risk management effectiveness standards, select risk taking, risk avoidance, risk transfer, risk conversion, risk hedging, risk compensation, risk control
Propose and implement risk management solutions
External solutions – outsourcing Internal solutions – operation of the risk management system
Risk management supervision and improvement
risk management system
Seven Tools for Risk Management
Risk taking, risk avoidance, risk transfer, risk conversion, risk hedging, risk compensation, risk control
Statistical methods [quantitative]
Maximum possible loss, probability value, expected value, fluctuation value, within limit value
Intuitive method [qualitative]
Expert opinion method, analytic hierarchy process [AHP]
Loss incident management
Loss financing, risk capital, emergency capital, insurance, professional captive insurance,
Risk management organizational function system
Board of Directors - General Meeting of Shareholders - Risk Management Committee [Audit Committee] - Risk Management Functional Department - Other functional departments and business units of the enterprise
COSO Committee
Three goals
Operational efficiency, financial reporting effectiveness, compliance with applicable regulations
five elements
Control environment, risk assessment, control activities, information and circulation, monitoring [audit]
Risk management techniques and methods
Qualitative analysis
Qualitative analysis: brainstorming method [BS method, intellectual stimulation method], Delphi method [expert opinion method], process analysis method, risk assessment diagram method
Quantitative analysis
Markov analysis method, sensitivity analysis method, decision tree method, statistical inference method
Qualitative vs Quantitative
Decision tree analysis method [ETA], scenario analysis method, failure mode, impact and hazard analysis method [FMECA]