RISKS

Risks

Introduction3

Assignment 13

1 Explanation of risk management4

1.1 Need for risk management4

1.2 Role of business functions in managing risk5

2.1 Analyzing the Risk Assessment Process6

2.2 Risk management frameworks8

Actuarial Society Framework8

COSO Framework8

ISO 310009

2.3 Risk management process and its role in business organization9

Assignment 211

3 Risk management of Coca Cola11

3.1 Main drivers of business risk11

3.2 High risk areas and impact of different types of risk12

3.3 Risk management strategies13

4 Crisis management14

4.1 Vulnerability14

4.2 Approaches to crisis management & impact of breaks in business continuity16

Conclusion16

References17

Appendix19

Risks

Introduction

Risk management is an essential ingredient of an organization's success. Prior to its management it is crucial to first explain what risk management is and why is it needed. It is also important to discuss how various business functions can give rise to risk. Risk assessment is performed with the aid of various frameworks which will need to be considered in detail together with real life examples as to how corporations manage crisis.

Assignment 1

A startup business needs to assess risk and manage it accordingly. This paper carries out this research and then reports the facts to the directors

Risk Assessment Report

To:Directors

From:Risk Analyst

Date7th June 7, 2013

Subject: Assessing the risk faced by a startup business and how different business functions are exposed to risks. Risk management framework and the risk management process are discussed in detail. Emphasis is also laid on business continuity and different approaches to crisis management.

1 Explanation of risk management

Risk management can be defined as a process which identifies risks and then analyses them in order to take appropriate action. Such action maybe to accept risk, avoid it, mitigate it etc which in turn is dependent upon the level of risk tolerance the company has. A startup business must analyze risk and then take appropriate action (Uwf.edu, 1999).

Source: strikingprojectmanagement.com, 2013

1.1 Need for risk management

If there is no risk there is no return. The main motive behind risk management is to minimize the downside. Elimination of risk is not the main objective. It gives a clear indication of what risks to accept and to what extent i.e. risk appetite and what are the systems in place to deal with those risks. There are several types of risks which may include interest rate risk, financial risk, market risk, project risk, business risk, foreign exchange risk, compliance risk, operational risk etc (Tattam, 2011, P.13).

The internal environment of a startup business may be lacking the internal control mechanisms and environment to identify, assess and hence manage those risks. This may be due to the inherent limitation of risk management such as human override of controls or other factors such as lack of management experience. A startup business should identify risk objectives that may include risk appetite. They then must assess risk by identifying the probability of risk and its impact/consequence. Plans must then be made to accept, mitigate or avoid risk. This is often known as risk response strategy. Control must then be exercised by comparing plans versus actual results. Risks should then be monitored on an ongoing basis to identify any deviations from the plan ...