Risks are inevitable in any business organisation. In this case, a company must put in place comprehensive measures to address various types of risks that a company may face. A senior manager of any organisation has a significant role to play in designing risk management strategies for the company. This report is, therefore, about the role of senior management in risk assessment, development of the company’s risk management strategy, communication and ressourcing risk management strategies and the evaluation of outcomes.
Risk management can be defined as the process of identifying, evaluating and prioritising risks supported by a well-coordinated efficient investment of ressources to minimise, monitor and control the probability of the occurrence of the unfortunate events and maximise attainment of opportunities. Risks originate from several sources, such as uncertainty in the financial markets, threats of project failure, legal issues, accidents, credit risks, and natural occurrences, among others. There are also cases where some events that have never happened before can occur, such as 9/11 terror attacks. These risks are referred to as unforeseeable risks. According to Nassim Taleb, unforeseeable risks are events, which are the rare but high impact on the business or organisation. In the contemporary business environment, inventions, such as social media and natural issues, such as global warming can have a massive impact on business thus the management should prepare for such issues or events appropriately.
Risk management, therefore, encompasses strategies adopted by the organisation to ensure that the negative effects of these uncertainties are limited by avoiding, reducing, transferring or accepting the risk. However, risk management initiatives must also consider strategic risks. Basically, strategic risks refer to long-term risks that may arise from long-term decisions taken by the company. That is, a strategic risk refers to potential losses that the company may incur as a result of pursuing wrong business or long-term plans. In this regard, strategic risk management could be described as identifying, assessing and managing risk processes that arise from the company’s business strategy, which includes taking necessary actions if such risks are identified. It encompasses the evaluation of a broad range of probable incidents and circumstances that may disturb the company’s strategy and its performance.
Inhaltsverzeichnis (Table of Contents)
- INTRODUCTION
- TASK 1
- A.C. 1.1
- A.C. 1.2
- A.C. 1.3
- TASK 2
- TASK 4
- TASK 5
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This report explores the pivotal role of senior management in the development and implementation of risk management strategies within a business organization. The report aims to shed light on how senior management can effectively identify, assess, prioritize, and mitigate risks, ensuring organizational resilience and success.
- The importance of risk management in a business context.
- The specific roles and responsibilities of senior management in risk management.
- The various models and frameworks available for risk management.
- The significance of risk awareness and its impact on risk vulnerability.
- Strategies for effectively managing and mitigating risks.
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction highlights the inherent nature of risks in any business organization and emphasizes the crucial role of senior management in crafting comprehensive risk management strategies. The report delves into the definition and origins of risk, emphasizing the distinction between foreseeable and unforeseeable risks.
Task 1 elaborates on the concept of risk management, its different forms, and the multifaceted responsibilities of senior management in this domain. This chapter examines the influence of senior management on the company's risk appetite and introduces various decision-making criteria for addressing uncertainties. The chapter concludes by exploring the impact of risk awareness on managerial vulnerability and underscores the importance of risk oversight by senior management.
Schlüsselwörter (Keywords)
Key terms and concepts explored in this report include risk management, senior management, risk assessment, strategic risk management, risk appetite, risk tolerance, risk awareness, risk oversight, risk models, ISO 31000, ERM, and risk mitigation strategies. The report delves into the crucial role of senior management in identifying, evaluating, and managing various types of risks, including financial, operational, legal, and strategic risks.
- Quote paper
- Difrine Madara (Author), 2018, Risk Management Strategies and the Role of Senior Managers, Munich, GRIN Verlag, https://www.grin.com/document/506614
