This paper aims to present Risk Management with its systematic approach and to explain it using Daimler AG as an example. At the end of this paper, the question of how Daimler AG deals with risks of various kinds and what criticism can be derived from this should be answered.
First chapter 2 will present the basics for the creation of a theoretical foundation. Specific definitions will be introduced and the processes of Risk Management about its operational and strategic objectives will be disclosed. Chapter 3 also uses a practical example to demonstrate implementation at Daimler AG, which provides an analytical view and a final view of the sum of the findings. At the same time, the typical characteristics of the automotive industry are shown and the resulting risks for Daimler AG are worked out. Finally, an approach to improve the communication of risk management is presented. This approach enables a more advanced presentation of opportunities and risks in combination with allocated strengths and weaknesses. At the end of the work, we find a conclusion with the demands that will result from these elaborated findings.
Table of Contents
1 Introduction
2 Basic presentation of Risk Management
2.1 Definition of risks and Risk Management
2.2 Procedural elements of Risk Management
2.3 Operational and strategic orientation of the instruments
3 Application of Risk Management at Daimler AG
3.1 Description of the object of investigation
3.2 Need for Risk Management at a company level
3.3 Organisational structures and methods
3.4 Application of a critical appraisal
3.4 Further development of risk and opportunity communication
4 Results
Objectives and Research Focus
The main objective of this assignment is to present the systematic approach of Risk Management and to demonstrate its practical implementation using Daimler AG as a case study. The paper investigates how the corporation handles various business risks, critically evaluates the existing internal risk management processes, and proposes a conceptual framework to enhance the communication of risks and opportunities in relation to the company's specific strengths and weaknesses.
- Theoretical foundations of operational and strategic risk management.
- Empirical case study of risk management structures at Daimler AG.
- Critical analysis of current risk identification and reporting methods.
- Development of a strategic tool for integrated risk, opportunity, strength, and weakness assessment.
Excerpt from the Book
3.3 Organisational structures and methods
Every management system begins with the formulation of a risk strategy, which is based on the pre-conceived strategic orientation as described in Chapter 2.3. The formulation is intended to identify and assess the risks faced by management in business segments and operating units according to criteria of the probability of occurrence and potential damage. The assessment of the extent of damage is based on risks that could affect EBIT, which is the key performance indicator of the Daimler Group. Management has devised a system of graded thresholds to trigger the handling of significant risks and trigger reporting.
The Risk Management system was embedded in existing controlling and reporting systems, which can be found in the Group Internal Audit and Finance and Controlling departments. It thus became part of the entire complex of planning, management and reporting processes in the relevant business and functional areas of the Group. In general, the focus of the Risk Management system at Daimler AG is on the identification, assessment, control and documentation of risks. Three perspectives, namely those on the viewing plane, the fields of observation and the types of risk, make up the tools for identifying risks.
Summary of Chapters
1 Introduction: This chapter outlines the growing importance of risk management in complex global markets and defines the scope of the study using Daimler AG as an example.
2 Basic presentation of Risk Management: This section establishes the theoretical foundation by defining risk, explaining the procedural elements of risk management, and differentiating between operational and strategic instruments.
3 Application of Risk Management at Daimler AG: This chapter provides a practical application analysis, covering the company structure, the necessity of risk management, organizational methodologies, critical appraisal, and proposals for improved communication.
4 Results: The final chapter summarizes the findings regarding Daimler AG's risk management effectiveness and reflects on the limitations and necessary future developments identified during the analysis.
Keywords
Risk Management, Daimler AG, Risk Identification, Risk Assessment, Strategic Management, Corporate Governance, Value-at-Risk, Risk Culture, Automotive Industry, Risk Communication, EBIT, Opportunity Management, Operational Risk, Strategic Planning, Financial Risk.
Frequently Asked Questions
What is the core subject of this paper?
The paper focuses on the systematic implementation and critical evaluation of corporate Risk Management, specifically using Daimler AG as a practical case study.
What are the central themes discussed in the work?
The central themes include the theoretical definition of risk, the procedural cycle of identification and control, the practical implementation of risk management within an automotive corporation, and the need for more transparent communication of risks and opportunities.
What is the primary research goal?
The primary goal is to examine how Daimler AG manages its risks and to suggest a more advanced, integrated approach for mapping opportunities and risks against the company’s internal strengths and weaknesses.
Which methodology is applied in this assignment?
The assignment employs a descriptive and analytical approach, utilizing existing annual reports, theoretical risk management literature, and the development of a conceptual framework (matrix) for strategic assessment.
What topics are covered in the main body?
The main body covers the definition and process of risk management, an overview of Daimler AG’s business divisions, the legal requirements (such as KonTraG), and the evaluation of specific tools like Value-at-Risk (VaR).
Which keywords best characterize this work?
Key terms include Risk Management, Daimler AG, Risk Identification, Value-at-Risk, and Strategic Management.
How does the author evaluate the current risk reporting at Daimler AG?
The author argues that while Daimler AG’s risk reporting is comprehensive, it often stays at a superficial level and fails to explicitly link identified risks and opportunities to the company’s specific strengths and weaknesses.
What is the purpose of the proposed "Figure 1" in the text?
Figure 1 is proposed as a strategic tool to visually map risks and opportunities against time and probability, allowing the company to better align its internal strengths to mitigate specific risks or realize identified opportunities.
- Citar trabajo
- Felix-Sebastian Ament (Autor), 2021, Group Risk Management. Application of Risk Management in Daimler AG, Múnich, GRIN Verlag, https://www.grin.com/document/1007020
