“If we do not manage risks, they will control us …”
The experience of leading international companies proves that the stability of business development and improve management is impossible without the active use of risk management as an integral part of company management system, regardless of its size and specific production or provision of services.
The risk management system aims to achieve the necessary balance between making a profit and the reduction of losses of entrepreneurial activity and is intended to become an integral part of the organization’s management, i.e. it should be integrated into the general policy of the company, its business plans and activities. Only under this condition, the use of risk-management system is effective.
Finaam Corporation offers maintenance of our experts in Risk of management, which involves building the necessary culture and business infrastructure for:
– Identify the causes and the main factors of risk;
– The identification, analysis and risk assessment;
– Decision-making on the basis of the estimate;
– Development of antirisk control actions;
– Reduce the risk to an acceptable level;
– Organizing the implementation of the planned program;
– Monitor the implementation of the planned activities;
– Analysis and evaluation of risk solutions;
– The conclusion of the critical state enterprises (bankruptcy);
– Attraction of investments;
– Modernization of the enterprise;
– Attracting new technologies.
Introduction into the practice of business risk management system ensures the stability of their development, to improve the validity of the decision-making in risky situations, to improve the financial position due to the implementation of all activities under controlled conditions.
Background of risk management
All enterprises at realization of their business processes systematically face the need to manage different types of risks. Therefore, senior management should ensure that all managers and personnel of the organization as a factor of paramount importance have recognized necessity of risk management.
Basis for risk management consists of the following main features of risk management.
Management of risks associated with both negative and with favorable consequences. The essence of risk management is to identify potential deviations from planned results and to manage these abnormalities to improve prospects, reduce losses and improve informed decision-making. Manage risks means to identify prospects and identify possibilities for improvement, as well as to prevent or reduce the probability of an undesirable course of events.
Management of risks assumes a thorough analysis of the conditions for decision-making.
Management of risks – is a logical and systematic process that can be used to select the way of further improvements, increase efficiency of business processes of the organization. This is the way leading to the provision of guaranteed performance of business processes. Risk management must be integrated into the daily operation of the enterprise.
Management of risks requires advanced thinking. Management of risks – it is rather a process of determining what can happen and also ensuring a state of readiness for this, rather than reactionary management of activities. Formalized risk management system allows you to create a system of managing the organization, which works to prevent possible problems.
Management of risks requires a clear allocation of responsibility and authority required to make management decisions. Senior management is responsible for the general management of risks in the organization. Its exclusive prerogative is allocation between the relevant staff responsibility and authority.
The decisions that are taken in the risk management process must be in accordance with statutory requirements and respond to corporate goals. Thus, it is important to determine the optimal balance between the responsibility for risk and the ability to control this risk.
Management of risks depends on an effective process cooperation between the participants of risk management. The process of risk management is carried out both in the internal and external environment of business, so you need to interact with internal and external stakeholders. To ensure a complete risk management, first of all it is important to establish effective cooperation inside the organization.
Management of risks requires a balanced solution. In the process of risk management is necessary to clearly determine the economic feasibility of risk reduction and the achievement of planned results.
These features of risk management are its basic factors:
1. Reduction of uncertainty in business activities;
2. Using of perspective improvement opportunities;
3. Improving the planning and effectiveness of the activity;
4. Economy of resources;
5. Improving the relationships with stakeholders;
6. Improving the quality of information for decision making;
7. The growth of business reputation;
8. Support from the founders;
9. The control of the production process and the implementation of investment Projects.
Scope of risk management
The process of risk management must be accompanied by control solutions at all levels of management of the organization (for example, at the highest level, at the level of structural units, or project team), consequently risk management must be integrated into the management of business processes and their constituent parts (stages).
The risk management process should be accompanied by planning and decision-making on the most important issues. This applies primarily to changes in politics, submission of new policies and procedures, project management, large cash investments or optimization of internal organizational conflicts and contradictions.
In the applied aspect, the process of risk management has a number of practical applications.
Here is an indicative list of them:
• Strategic, operational and budget planning
• Asset management and planning of resource allocation
• Changes in the business (strategic, technological and organizational)
• Design and development of new products
• Quality Management
• Social aspects of interaction with the public
• The Code of Business and Professional Ethics
• Information Security
• Issues of civil liability
• Contract management, suppliers and procurement
• Management of subcontractors
• Personnel Management
• Corporate governance
• The scope of the process of risk management depends on the importance of managerial decisions that must be taken during the business activity
• Modernization, reconstruction, expansion of production areas.
Consultation has the following characteristic features:
– First of all, this is event to achieve the final result, and not the goal of risk management;
– The results of consultation are the information base for making risky decisions, but they are not controlling influence on this decision.
Specialists of Finaam conduct a complete review and will offer you a step by step procedure to improve the state of your business, will be with you a complete cycle of production and financial recovery. Will share knowledge and experience.
Involvement in the process of risk management other participants (for example, experts on specialized issues), or at least to provide expert assessments, is essential and crucial for the effectiveness of risk management. Interacting with participants of risk management makes risk management more carefully, it puts it on a qualitative basis and attaches importance to the organization.
THE SUCCESS OF OUR CLIENTS – OUR SUCCESS!