Вы находитесь на странице: 1из 19

RISK MANAGEMENT

: Mohiuddin Asad,

BY

B.COM, MBA, ACCA, CMA, CIA, CFE, FFA, CCSA

What is Risk?


Chance or situation involving exposure to the possibility of loss, injury, or other adverse or unwelcome circumstances. In quantitative terms; Probability x Impact

What is Risk Management?




Risk Management is not about, Not taking risk at all, rather it is a conscious, planned and calculated way of taking risks. The process of identifying, assessing, prioritizing and deciding how to best handle risks.

Steps in Risk Management?


Identify  Assess  Prioritize  Manage  Monitor


Main Categories


Compliance Risk Operational Risk Financial Risk

Compliance Risk


Examples :
Licenses , Permits, Copyrights, Patents etc expired. Employees working without work permit. Labor, Health, Safety or Environmental Laws breached. Accounting standards not followed. Software licenses breach Quality standards not followed

Operational Risk


Examples :
Sales drop; New competitor Dependency on few customers Loss of Franchise Service complaints; Lack of service staff Parts not available Stock out Warranty disputes Reputation risk Economic recession Inventory damage / short during transfers System Down Flood / Fire disturbed business

Financial Risk


Examples :
Funds shortage Collection problems / write offs Currency risk Risky but profitable credit deal Duplicate payment Interest rate risk Investment risk Fraud Fire / Flood damages Theft / shortage Penalties / fines

Assessment of Risk
High High / Low High / High

PROBABILITY

Low / Low Low IMPACT

Low / High High

Assessment of Risk
High High / Low
Parts shortage Warranty disputes

High / High
Loss of Franchise Risky Credit Deal

PROBABILITY
Environ law breach Accounting standards Stock Out CR Expired

Low / Low Low IMPACT

Low / High High

Risk Prioritization


High Impact High Impact

+ +

High Probability Low Probability Low Impact Low Impact

High Probability + Low Probability +

Risk Management Techniques


Transfer  Avoid  Reduce  Accept  Remember mnemonic TARA


Cost vs. Benefit Analysis




Whichever technique or a combination of techniques to be chosen, remember the underlying universal business assumption; Benefits

>

Cost

High Impact & High Probability


 Loss of Franchise Transfer Not Applicable Avoid Not Possible Accept Not Feasible Reduce How?  Risky

but profitable credit deal

THINK !! Transfer, Avoid, Reduce, OR Accept ?

High Impact & Low Probability




Stock out : THINK !


Transfer Avoid Accept Reduce

License expired : THINK !


Transfer Avoid Accept Reduce

High Probability & Low Impact




Parts inventory shortage : THINK !


Transfer Avoid Accept Reduce

Warranty disputes : THINK !


Transfer Avoid Accept Reduce

Low Probability & Low Impact




Noise pollution : THINK !


Transfer Avoid Reduce Accept

Accounting standards not followed : THINK !


Transfer Avoid Reduce Accept

Risk Monitoring
Regular review  Corrective actions  Remember it s a cycle

Risk Management

Thank You

Вам также может понравиться