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Nissan Internal
Introduction
Risk exposure
This article is about how risky one company is. About the internal
risk. And by these risks, the author does not so much refer to the
production processes, but the softer risks of managing a company.
The key contribution of Simons is the Risk Exposure Calculator. Of
course not all risks are unintended. Most people would argue that
risk is part of doing business, so a good risk calculator would only
include the unwanted and unrecognized risks. It is also not the goal
to find one specific number to pinpoint the risks of a company, but to
give hints for improvement.
2 Nissan Internal
Guideline for Managers
Managers need to
How to pinpoint
increase their
the areas of risk
level of internal
exposure?
risk exposure.
3 Nissan Internal
Risk Exposure Calculator
What Risk Calculator do?
Allow Executive to
Shows the Pressure determines if a
Point in Every companys risk level
Organization that lead is in the safety,
into increased risk. caution, or danger
zone.
4 Nissan Internal
Risk Exposure Calculator
5 Nissan Internal
Risk Exposure Calculator
DUE TO GROWTH
Three
Internal DUE TO CULTURE
Pressures
6 Nissan Internal
Risk Exposure Calculator
7 Nissan Internal
Pressure Points due to Growth
8 Nissan Internal
Pressure Points Due to Culture
Bad News
Travel upwards to Management
Internal Competition
Decreased Information within company = Negative
9 Nissan Internal
Pressure Points Due to Information
Management
10 Nissan Internal
Controlling internal risks
Simons Suggests ways to manage the above mentioned risk by focusing
on five question.
11 Nissan Internal
Conclusion
This article after all was more inward facing than we thought, but
nonetheless operational risks are an important part of every-day
business and of course strategic management. Operational risks
as described here probably became a little outdated due to some
unpopular initiatives as the Sarbanes-Oxley Act (USA) or BilMoG
(Germany), but there is a lot of potential for improvement and
Simons describes several good cases supporting his points.
The major conclusion from his research is the contradiction
between risks in times of high growth. All the risks Simons
presented are usually growing during the good times when the
business is growing. And many cases show that those risks can
be the reason why those companies went out of business after
the growth period was over.
This research can give us clues where improvements are
necessary and also shows levers to improve control within the
company again.
12 Nissan Internal