Beruflich Dokumente
Kultur Dokumente
Prof.H.DAS
DEFINITION
The techniques used to minimize and prevent accidental loss to a business. The process of identifying, assessing, and controlling, risks arising from operational factors and making decisions that balance risk cost with mission benefits. Also called Risk management Risk signifies danger and is something to be avoided
Classification of risks
Industry & services risks Management and operations risks
Business dynamics
Customer relations risks customer
Market risks
Raw materials rate Quantities,quality,suppliers, lead times interest rates risks and forex risks namely, fluctuations risks and interest rates risk in respect of foreign exchange transactions
Political risks
Elections
War risks
Country /area risks Insurance risks like fire,strikes,riots and civil commotion, marine risks, cargo risks etc Fiscal/monetary policy risks including taxation risks
CREDIT POLICY
Credit worthiness risks
Liquidity risks
Financial solvency and liquidity risks
Disaster risks
Natural risks like fires, floods, earthquakes, etc Man made risks factor rising under the factories act, mines act , etc risk of failure of effective disaster management plans formulated by the company
System risks
System capacities
System reliability
Obsolescence risks Data integrity risks
Legal risks
Contract risks
Terminate
Take the opportunity
Risk identification
Any business exists in an atmosphere of perpetual change The process of risk identification must be an ongoing one and any failure in proper risk identification would result in passive retention of the risk by the company Risk identification information: Asset information such as list of assets, its original cost ,book value, replacement value etc.
Contd
E Risk transfer :
Insurance does not protect a firm against perils occurring ; it offers restoration , atleast in part of any resultant economic losses.
F Implementation of decision
Risk handling
In every country there are governmental and official regulations regarding health and safety at work: fire precautions, hygiene , the construction and operation of vehicles, food and drink and many other matters relating to property, personal injury and other risk. Example: motor vehicles ACT and the ESI ACT
Risk reduction
The only cautionary note regarding risk reduction is that as far as possible expenditure should be related to potential future saving in losses and other risk costs; in other words, risk prevention generally should be evaluated in the same way as other investment projects