Please enable JavaScript.
Coggle requires JavaScript to display documents.
RISKS - Coggle Diagram
RISKS
-
-
Risk management
risk management is the process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions
we deal with risks in everyday life from day to day, without taking this into account
• Risk management is the process of identification, analysis, and acceptance or mitigation of uncertainty in investment decisions
-
risks are becoming more unpredictable and less linear due to inflation/ political or economic instability and volatility. In addition to the intuitive management principle, you can change variables to gauge how different conditions make an impact
PEST Analysis is a management method whereby an organization can assess major external factors that influence its operation in order to become more competitive in the market
stands for political, economic, social, and technological
• This type of analysis is used to gauge external factors that could impact the profitability of a company.
-
• It helps you to spot business or personal opportunities, and it gives you advanced warning of significant threats.
• It reveals the direction of change within your business environment. This helps you shape what you're doing, so that you work with change, rather than against it.
-
Strategic risks
Looks at the Area of competition, chanhing customer demand, the availability of new Technologies, changinзg social and political pressures on an organisation.
used to identify, assess, and manage risks in an organization.
-
-
REPUTATIONAL RISK
reputation is an important and valuable asset that is vulnerable and volatile.
can be an organization’s most valuable intangible asset
• People are generally aware of their brand values
Reputational risk is a threat or danger to the good name or standing of a business or entity.
Reputational risk is a hidden danger that can pose a threat to the survival of the biggest and best-run companies
• Directly, as the result of the actions of the company itself
• Indirectly, due to the actions of an employee or employees
-
• The biggest problem with reputational risk is that it can literally erupt out of nowhere and even without warning.
EXAMPLE: Reputational risk exploded into full view in 2016 when the scandal involving the opening of millions of unauthorized accounts by retail bankers
Business risks
-
availability to make sufficient sales and generate revenues to cover its operational expenses and turn a profit
concerned with all the other expenses (e.g. salaries, production costs, facility rent, office, and administrative) a business must cover to remain operational and functioning.
Operational risks
risks such as information technology,supply chain and employment risks
include legal and environmental risks, acquisition of new businesses, restructuring measures
-
Financial risks
-
can be classified into various types such as Market Risk, Credit Risk, Liquidity Risk and Legal Risk
-
The security risk
any event that could result in the compromise of organizational assets
i.e. the unauthorized use, loss, damage, disclosure or modification of organizational assets for the profit
-
A security risk assessment identifies, assesses, and implements key security controls in applications.
Factors such as size, growth rate, resources, and asset portfolio affect the depth of risk assessment models.
4 steps of a successful security risk assessment model
Identification. Determine all critical assets of the technology infrastructure
Assessment. Administer an approach to assess the identified security risks for critical assets.
Mitigation. Define a mitigation approach and enforce security controls for each risk.
Prevention. Implement tools and processes to minimize threats and vulnerabilities from occurring in your firm’s resources.
-
• Internal risks include personnel management, such as labor shortages or poor morale and technology issues, such as outdated software.
• External risks include economic slowdowns, leading to lower revenue as well as political risks from trade wars hurting international sales
-
Political Risk
is comprised of changes in the political environment or governmental policy that relate to financial affairs
-
Managing Business Risk
-
can more effectively weather internal storms, such as updating or replacing replace faulty machinery or systems
The three types of internal risk factors are human factors, technological factors, and physical factors.
Human-factor risk can include Union strikes/ Dishonesty by employees/ Ineffective management or leadership/ Failure on the part of external producers or suppliers
Technological risk includes unforeseen changes in the manufacturing, delivery or distribution of a company's product or service.
Physical risk is the loss of or damage to the assets of a company. A company can reduce internal risks by hedging the exposure to these three risk types.
-
Five steps to the management of risk:
Step 1: to recognize the strategic objectives
Step 2: Identify the Risk.( uncover, recognize and describe risks)
Step 3 : Analyze/ access and prioritize the risk. (determine the likelihood and consequence of each risk)
Step 4: Mitigating risk
Step 5: Monitor and Review the risk.(you use it to monitor, track and review risks)
-
Examples of organizations that have failed to anticipate changes in customer demand- the video-cassette industry
-
-
What is it? the chance that an outcome or investment's actual gains will differ from an expected outcome or return.