In case of an unpredictable event, circumspect and aimed action is asked. In advance, goal-oriented precautions have to be met to represent information-streams and to enforce training - and education-measures.
In the event-case, the effect as well as the size of damages can be minimized at persons, real values, the environment and the neighbourhood. The reputation of the company, its co-workers, business partners as well as the authorities and the population will be persistently and positively influenced by positive and clear directed action.
The a.m. statements, courses and evaluation-systems should serve with support and guarantee that aimed action leads such situations and possible and unforeseeable damages can be reduced.
The management has to fix business-politics and define a lasting risk-strategy that has to be communicated to all co-workers. It is even though important that the goals are precisely and unequivocally defined in the business lines, not compete together and doesn't stand in conflict to each other. For the achievement of the strategic goals, it is decisive that the appointed goals are marketable and realizable.
Contents
Risk as Term (references, purpose, identification)
Risk Analysis (production sites/processes)
Risk Assessment (weighting risks, occurrence likelihood, causes)
Risk Management/Risk Monitoring (chances, actions and output verification)
Guidelines for Risk Management Integration
Risk as a Term
“The hazard that an event or action negatively affects the firm’s ability to achieve its business goals or pursue its corporate business strategy to a success”
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Figure 1 Risk as a Term
Underlying Causes / Purpose of Risk Management
The globalization of the markets as well as the onward Diversification, the reinforced margin-pressure necessitates and the reinforced confrontation with not directly and previously-sight-pure negative influences on the current operations are very important items to deal with.
The general bases for a simple and fast analysis and evaluation of risks to manage and to tie in into the organizations should be the basis for company’s success.
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Figure 2 Backgrounds and Basis of Risk Management
What variety of risks are pesent in the steel industry
The analysis of risks shows the multiplicity and substantiates the fact that the confrontation took place in the past years only rudimentary, since the pressure was not sufficient to give serious thought to it, since even experienced negative effects of the risks were rather rare. Turbulences in all areas, that the recognized risks involve, was the reason that businesses deal more and more with possible consequences and the defence of it.
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Figure 3 Varieties of Risks
KEYWORDS in Risk Management
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Figure 4 Keywords
Risk Management as an All-Over Task throughout Corporate Hierarchy
The confrontation with the topics of the risk-management is not important for near future but for the distant future.
Risk-management has to be understood as an encroaching task in the business and has to be accepted as a life style, since all business-areas will be concerned. It has to be goal-oriented to the risk-minimization, achievement and contribution to risk management on all business levels.
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Figure 5 Risk Management as a Task throughout the Business Levels
The reconnaissance, exploration, analysis and control of risks is easier said than done and there is a high demand of analytic planning with handicap of goals, results and the distribution of duties and responsibilities for all business-areas. Finally, also aimed control-mechanisms, like -accomplishment, success - and – preservation control instruments are a fundamental basis for success. The model-function of the "upper - management“ and the support on all levels of it is therefore an inalienable prerequisite for a working and lasting risk-management.
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Figure 6 Risk Management Organizations in Businesses (1) (2)
Risk Management as an Integrated Process
The process steps of an effective risk-management-process have to be outlined as a clear structure and have to be mediated accordingly.
Only through such a process the constantly necessary assimilation-process of the system can be motivated by leadership in the business-areas and the process and the resulting action will be kept alive.
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Figure 7 Risk Management as an Integrated Process (1) (2)
Implementation of an Integrated Risk Management System
Subsequently, examples of process steps are presented, to outline the transposition process of an integrated risk-management-system, as well as the complexity of the total-scope.
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Figure 8 Implementation of an Integrated Risk Management System (1) (2)
It is also evident to show the possibilities of an aimed risk-control system, as their possessions will affect the entire operations in case of an unpredictable event, that can cause variant types of risks but also challenges in contribution and understanding. Also the accepted risks have to be explored and presented to the leading functions on this occasion, because they have to be accepted as a rest-risk, because they are economically not supportable.
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Figure 9 Model of Risk Control (1) (2)
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Figure10 Risk Graph as an Assessment Tool (1) (2)
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Figure 11 Risk Graph as a Basis and an Assessment Tool (1) (2)
In the meantime, the well known risk-graph is used in many areas, it is an appraisal tool that can simply be handled and enables a fast overview on a spot occasion.
The ideal approach to risk analysis
Selection of indicators and evaluation factors are evident, to come to a transparent representation of risks. Such indicators and factors are already present out of other business figures and therefore a fast and simply evaluation with anyway existing information, numbers, results and records is promptly possible.
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Figure 12 Ideal Approaches to Risk Analysis
Target-oriented analysis as initial step prior to risk graph assessment
Important is also the investigation of the occurrence-likelihood as well as the possible damage-size. Therefore extensive experiences are necessary, however well known information can be used. That information and experience should be summarized to evaluation-standards as well as ratios as indicators and factors for further investigation. Existing and anyway used knowledge as well as numerical data should be taken into account, since this is known and catchy.
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Frequently asked questions
What is "Risk as a Term" about?
This section defines risk and its impact on a firm's ability to achieve its business goals. It also discusses the underlying causes and purpose of risk management, highlighting the influence of globalization, diversification, and margin pressure. It emphasizes the need for fast risk analysis and integration within organizations for success.
What does the document say about risk analysis?
The document introduces the multiplicity of risks, particularly in the steel industry, noting the past rudimentary confrontation with risks due to insufficient pressure. It also highlights keywords in risk management and emphasizes risk management as an all-over task throughout the corporate hierarchy.
What is the role of risk management in this context?
Risk management is presented as a crucial task for the future, requiring understanding and acceptance as a lifestyle within the business. It focuses on risk minimization and contributions from all business levels. It's also noted that successful risk management requires analytic planning, clear distribution of duties and responsibilities, and supportive control mechanisms.
How does the document describe risk management as an integrated process?
The document outlines the process steps of an effective risk management process, emphasizing the need for a clear structure and assimilation-process motivated by leadership. This keeps the process and resulting action alive.
What are some examples of process steps presented in the document?
The document mentions examples of process steps for implementing an integrated risk management system, showing the complexity of the total scope. It's also evident to show the possibilities of an aimed risk-control system, as their possessions will affect the entire operations in case of an unpredictable event. The accepted risks have to be explored and presented to the leading functions on this occasion, because they have to be accepted as a rest-risk, because they are economically not supportable.
What does the document say about risk assessment tools?
The document describes the risk graph as a well-known appraisal tool used in many areas, enabling a fast overview of a situation. It also mentions the selection of indicators and evaluation factors for transparent risk representation using existing business figures.
What is the document's perspective on risk analysis?
The document advocates for a target-oriented analysis prior to risk graph assessment, emphasizing the investigation of occurrence-likelihood and possible damage size. It suggests using existing knowledge and numerical data to create evaluation standards, ratios, and indicators.
- Quote paper
- Dipl.Ing. Rainer Jaspers (Author), Karol Balog (Author), 2012, Risk Management as a Challenge and a Key Element for Corporate Success, Munich, GRIN Verlag, https://www.grin.com/document/195235
