...Summary This report is produced for the purpose of training staff in major risk areas. It draws on the BP oil spill case in the Gulf of Mexico to identify areas of major risk and how these risks were dealt with. In order to allow for more comprehensive analysis, attention is focused on mainly three risk management issues faced by BP. Ineffective management, regulatory failure and crisis containment failure were the three risk management issues identified. In the case study we found BP’s management to be ineffective as its promotion of a profit based organizational culture not only leads poor decisions based on cost cutting criteria to be taken, but also prevents organizational learning. BP management further failed to co-ordinate and communicate effectively, further exposing the company to greater risks. All these problems associated will poor management of the company demonstrate the importance an effective management system that promotes long term sustainability instead of short term profits. Nations and companies may often view government regulations as an additional check, expecting regulation to take preventive or corrective actions where they fall short. In BP’s oil spill case however government and company interdependence increased the complexity of the situation which resulted in both failing to take corrective actions to reduce risks while also failing to formulate an appropriate crisis plan. This illustrates...
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...The Importance of Risk Management to a Business All organizations encounter uncertain events when trying to achieve their objectives. These uncertain events may arise inside or outside the organization. Each individual uncertain event that would impact one or more objectives is known as a risk. If the risk would have a negative impact on the business if it occurred, then it is a threat. If it has a positive impact then it is known as an opportunity. The combined effect of risks to a set of objectives is known as risk exposure, and is the extent of the risk borne by that part of the organization at that time. Risk has always been an inherent feature in any undertaking therefore risk management is not a new concept for organizations. The earliest application of risk management within organizations tended to focus on insurance management in terms of establishing financial capacity for the negative effects of adverse events. During the 1970s a broader view started to emerge whereby organizations began to develop a better understanding of the nature of the risks being faced and looked at alternatives to insurance. There remained, however, a focus on the negative effects of risk. Only in recent years have organizations begun to recognize that risk management, in its broadest sense, applies to both negative threats and positive opportunities. In each case a proactive approach is required, which seeks to understand the size of the possible threats and opportunities so that a decision...
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...large multinational and small to medium, should take the threats and risks they could face seriously. Security Risk Management (SRM), Business Continuity Management (BCM) and Emergency Planning (EP) assist in achieving this by putting in place effective risk identification and management measures. Effective management of risk can make the difference between success or failure of business operations during and after difficult events. Threats can include man made threats, such as terrorist attacks, or naturally occurring threats such as earthquakes. Effective risk identification and management is essential to any business, especially with the current uncertainty in the world’s economic climate. In order for businesses to survive, during times of increased strain on business operations, it is essential that an alignment between security and business operations can be achieved. This can be achieved by the security department not only widening the remit to cover more risks, but changing how the department works and relates to the rest of the business; including shared responsibility for things such as Corporate Governance, Information Assurance, Business Continuity, Reputation Management and Crisis Management. The problem is security departments now have more responsibilities in an increasingly complex and fast moving world. Security Risk management is no longer an activity just for companies who work in high-risk areas or with exposure to significant security threats. Therefore,...
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...Assignment On Risk Management in International Business with Special Reference to Bangladesh Submitted to Dr. Shah Md. Ahsan Habib Crouse Instructor: International Business Submitted by Milton Kanti Das Id: 12364015 Program: MBA BRAC Business School 1::Introduction: Due to globalization, it’s hardly to find any business activities that are only associated within only in local market. Basically, today’s business means international business. On the other hand international business consists of lots of opportunities as well as lots of risks. Being success in the international business depends on handling of the risks properly. If these types of risks cannot handle properly doing business will be very difficult to sustain in international market. There are risks in international business among them some can be handled and some cannot be handled. Here in this page I will try to discuss those risks regarding international trade that can be handled by using different mechanism. There are different types of mechanisms have developed all over the world to reduce these risks. Throughout the paper I have tried to discuss these mechanisms also. 2::Objectives To discuss the theoretical aspect of risks and techniques of risk management in international business. To discuss the risk management tools of Bangladesh. 2.1:: Theoretical Aspect of Risks and Techniques of Risk Management in International Business: In international business firms have to face many risks due to political...
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...Running head: RISK MANAGEMENT AND THEIR INFLUENCES Risk Management and Their Influences on Corporate Governance University of Maryland University College Graduate School of Management& technology Executive Summary Implementing a risk management process in line with organizational or business goals and objectives is vital for successfully managing or mitigating risk. Risk identification, analysis, handling, and monitoring should be addressed by all stakeholders. The process should be implemented in accordance with a pre constructed Risk management plan. A well developed risk assessment will make use of the considerable number of assessments, planning, and formal risk identification performed to provide a picture of the composite or overall risk associated with an organization. Also an effective risk mitigation strategy will provide a significant increase in the confidence level that a business or organization will meet its cost, schedule, and performance requirements. Introduction Risk is an important concept that plays a major role in the success of a business and organization. Risk is defined as the exposure to injury or loss. Every decision that we make as human beings contain some form of risk and most of the time the weight of the risk determine whether we will follow through with an action or not. Risk Management is a systematic way to keep those risks in check and a way to limit those risks in impacting the...
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...Framework for Enterprise Risk Management © 2013 Johnson & Johnson Contents Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 J&J Strategic Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 What is Risk?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 J&J Approach to Enterprise Risk Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Governance & Oversight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 . . 2 3 Introduction In order to deliver value to our consumers, patients, caregivers, employees, communities and shareholders, we at Johnson & Johnson (J&J) must understand and manage the risks faced across our entire organization. Risks are inherent in our business activities and can relate to strategic threats, operational issues, compliance with laws, and reporting obligations. This document...
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...FINANCIAL MANAGEMENT Module Run No: R19/3-2011 PROJECT REPORT By: Tengku Mohamad Hedir (Intake: R19/03-2011) In partial fulfillment of the requirement of the HIGHER DIPLOMA IN SUPPLY CHAIN MANAGEMENT NO | TABLE OF CONTENTS | PAGE | 1 | INTRODUCTION | 3 | 2 | OBJECTIVE | 3 | 3 | EXECUTIVE SUMMARY | 4 | 4 | CAUSE OF THE ECONOMIC CRISIS | 5 | 5 | RISK MANAGEMENT | 6 | 6 | VARIOUS FORMS OF RISKS | 7 | 7 | MANAGING RISKS | 9 | 8 | CONCLUSION | 11 | INTRODUCTION This Project Report is based on the topic of “The Global Economic Crisis Challenges Management of Business Risks”. With view to the economic crisis in 2008 up till today, many businesses and major world economies are still reeling from the effects of the global downturn. This is primarily due to the onset of the subprime credit crisis. The subprime crisis is characterized by a rise in mortgage delinquencies and foreclosures backed by housing loans to individuals who face difficulty maintaining the repayment schedule. However, those who turn out better from the crisis have been seemingly those with greater awareness of their risks of doing business and practice more effective management of these risks. OBJECTIVE The objective of this Project Report is to identify the various risks that a business in Singapore needs to be aware of and to manage. EXECUTIVE SUMMARY The importance of risk management cannot be overstated. This is a fundamental part of doing business that must...
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...Table of Contents What are the company’s mission and current strategies? Risk Identifications and Implications Risk Management process Appointment of Risk Management Personnel: Actions of the Risk Management Committee Basic Approach to Internal Controls Business Continuity Management (BCM) at Toyota Risk Organization Risk management system Improve risk management Creation of the Emergency Operation Centre Creation of Global Large-Scale Disaster Countermeasure Committee Improving information telecommunication system in case of an emergency CSR Management Organizational Culture If you were hired as an Advisor: What recommendations or changes would you make? How would you implement these recommendations or changes? What are the company’s mission and current strategies? Toyota has for mission to be the first choice for all customers looking for materials handling solutions and to be widely recognized for their innovative products and services with a total respect for society. Toyota tries to build trust and confidence with their customers by delivering outstanding quality products and services which ass real value to their businesses. Toyota respects the expectations and ambitions of employees, stakeholders and suppliers through a constant search to improve. Toyota aims to achieve long-term and stable growth in harmony with the environment, the global economy, the local communities it serve and its stakeholders. The impact of the high Australia dollar...
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...organization is a very y large corporation containing a host of many businesses. This plan would enable them to face and handle challenges in their every day management decisions. They will be able to proceed with handling risk, opportunity, and many uncertainties as they continue to grow. They need to be able to balance risk with strategies and identify and select among the correct alternatives when they response to risk in their decisions. They need to be able to not be caught off guard but be prepared for swings in the business environment. The enterprise risk management program will prepare the management to be able to deals with various risks and opportunities that will affect their value. Enterprise risk management when put into place will be an ongoing and flowing through out the entire entity of the business. It will be used and effect by both management and employees on every level of the organization. It will apply in their strategy setting. It is designed to identify what or if the potential risk occurs how it will affect the business. The enterprise risk management focuses on four categories; strategic, operations, reporting, and compliance. The components of the enterprise risk management consists of eight interrelated parts; internal environment, objective setting, event identification, risk...
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...Risk is widespread and dwells at the heart of every monetary activity of people, organisations and governments. Risk management is the procedure of distinguishing the risks, assessing it and after that decisions are made and executed for the best method for dealing with the risks. From the macroeconomic angle the techniques of risk management can diminish the quantity of business and modern endeavours that would some way or another get to be wiped out. The most striking advantage of powerful risk management results from loss of control. Compelling misfortune control techniques can minimise the recurrence and power of catastrophes. Risk is pervasive and spreads through each issue of life. To business segments, unanticipated circumstances make...
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...MIT Sloan School of Management MIT Sloan School Working Paper 4933-11 Developing a Common Language About IT Risk Management George Westerman and Richard Hunter ©George Westerman and Richard Hunter All rights reserved. Short sections of text, not to exceed two paragraphs, may be quoted without explicit permission, provided that full credit including © notice is given to the source. This paper also can be downloaded without charge from the Social Science Research Network Electronic Paper Collection: http://ssrn.com/abstract=1979796 Electronic copy available at: http://ssrn.com/abstract=1979796 CENTER FOR Massachusetts INFORMATION Institute of SYSTEMS Technology RESEARCH Sloan School Cambridge of Management Massachusetts Developing a Common Language About IT Risk Management George Westerman and Richard Hunter June 2009 CISR WP No. 377 A version of this paper will be published as “Developing a Common Language About IT Risk,” IESE Insight, Issue 1, Second Quarter 2009: 21–27. © 2009 Massachusetts Institute of Technology. All rights reserved. Research Article: a completed research article drawing on one or more CISR research projects that presents management frameworks, findings and recommendations. Research Summary: a summary of a research project with preliminary findings. Research Briefings: a collection of short executive summaries...
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... T Anatomy of Risk Management Practices in the Mortgage Industry: Lessons for the Future Clifford V. Rossi Anatomy of Risk Management Practices in the Mortgage Industry: Lessons for the Future Clifford V. Rossi Robert H. Smith School of Business University of Maryland May 2010 2 9946 Anatomy of Risk Management Practices in the Mortgage Industry: Lessons for the Future © Research Institute for Housing America May 2010. All rights reserved. Research Institute for Housing America Board of Trustees Chair Teresa Bryce, Esq. Radian Group Inc. Michael W. Young Cenlar FSB Nancee Mueller Wells Fargo Edward L. Hurley Avanath Capital Partners LLC Steve Graves Principal Real Estate Investors Dena Yocom IMortgage Staff Jay Brinkmann, Ph.D. Senior Vice President, Research and Business Development Chief Economist Mortgage Bankers Association Michael Fratantoni, Ph.D. Vice President, Research and Economics Mortgage Bankers Association Anatomy of Risk Management Practices in the Mortgage Industry: Lessons for the Future © Research Institute for Housing America May 2010. All rights reserved. 3 Table of Contents Executive Summary 1. Introduction: Findings and Recommendations 2. A Model for Mortgage Risk Taking: Growth, P / E and the Fallacy of ROE 3. Data and Model Limitations Data Integrity Economic Environment Mortgage Products and Risk Layering Borrower and Counterparty Behavior 4. Governance, Corporate Culture and Risk Taking: A Behavioral...
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...Chapter 7: Assessing Risk and Internal Control Audit Risk Assessment: Auditing is fundamentally a risk management process. Audit risk is related to information risk that financial statements are materially misstated. -lower audit risk by performing more audit work that will give them a high level of assurance that the financial statements are correct. 1) INHERENT RISK (IR)- the probability of material misstatement occurring in transactions entering the accounting system or being in the account balances. Auditors do not created or control inherent risk. Can only assess its magnitude based on prior experiences, management bias, and the nature of the transaction. Look at characteristics of clients business, types of transactions, and effectiveness of accountants. 2) CONTROL RISK (CR): risk that the clients internal control system will not prevent or detect a material misstatement. Auditors do not create control risk, they assess probability of failure to detect material misstatements. Assessment is based on study and evaluation of the company’s control system. **Control risk should not be assessed so low that auditors rely entirely on controls and do no substantive work. 3) DETECTION RISK (DR): the risk that any material misstatement that has not been corrected by the clients internal control will not be detected by the auditor. **Auditors can control this risk by conducting substantive (balance audits) tests. (include: audit of details of transactions and balances, and analytical...
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...on IT risk February 2010 Top privacy issues for 2010 Information serves as an integral part of most business processes. Organizations cannot survive without information and the supporting systems, third parties and manual activities that collect, derive, process, store and make available the information. Organizations rely on information and, therefore, are at risk when the information is degraded. In addition, information often imposes obligations to the organization, whether because a law or regulation requires it, or fiduciary duty demands it. Enterprise governance, risk and compliance (GRC) represents the actions that an organization takes to achieve its performance objectives and manage risk. This includes information risk and the organization’s obligations over the information it owns, produces, uses and makes available to others. Organizations use different kinds of information — financial, business, intellectual property, etc. — each with its own unique governance, risk and compliance considerations. Personal information is one such information category, and in this publication we take a closer look at the specifics of personal information and privacy risk. Insights on IT risk — February 2010 1 Introduction to privacy risk management and compliance This document introduces the related topics of privacy risk management and compliance, describes how they must be addressed integrally to be effectively managed, discusses how effective management can lead...
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...Pa R T O N e Risk Management Business Challenges Risk Management Fundamentals 2 Managing Risk: Threats, Vulnerabilities, and Exploits 29 Managing Compliance 57 Developing a Risk Management Plan 85 CHaPTeR Risk Management Fundamentals 1 R ISK MANAGEMENT IS IMPORTANT to the success of every company— a company that takes no risks doesn’t thrive. On the other hand, a company that ignores risk can fail when a single threat is exploited. Nowadays, nformation technology (IT) systems contribute to the success i of most com anies. If you don’t properly manage IT risks, they can also p contribute to your company’s failure. Effective risk management starts by understanding threats and vulnerabilities. You build on this knowledge by identifying ways to mitigate the risks. Risks can be mitigated by reducing vulnerabilities or reducing the impact of the risk. You can then create different plans to mitigate risks in different areas of the company. A company typically has several risk mitigation plans in place. Risk management is presented in three parts in this textbook. Part 1 is titled “Risk Management Business Challenges.” It lays a foundation for the book, with definitions of many of the terms and techniques of risk management. It finishes with details on how to develop a risk management plan. Part 2 is titled “Mitigating Risk.” This section covers risk assessments. Once you identify risks, you can take steps to reduce them...
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