...Risk mitigation techniques Risk management involves the process of continuous identification of the risk factors and devising way and methods of dealing with them. The identification process can be done using different types of models depending on the type of organization being analyzed (Chapman, 1996). Dr. Kallman a professor of risk management, has several techniques which he has discussed regarding the risk management which will be compared with other techniques recommended by other authors like Victoria Duff. Understand the risk According to Dr. Kallman on risk management, he has given the following techniques to be used. Dr. Kallman says that before giving the mitigation techniques to the risk, there must be identification of the risks. A risk manager should understand the type of risks which are likely to face a firm and list them down. This is what we call risk identification. For one to know this, there must be clear understanding of the companies’ goals, mission and objective. From these factors, the risk that is likely to face an organization can be identified easily. When the risks have been identified, they can be categorized to three distinct groups such as, operational, strategic and economic. Strategic risks include those risks with long term varied effects on the firm and they are composed of factors like, the reputational risk, quality risk and brand risk. The next set of risk is operational risks which include things like the hazards which expose the business...
Words: 1398 - Pages: 6
...country’s currency. The whole process gets done by a network of various financial institutions like banks, investors and governments. The exchange rate varies according to the value of each country’s currency which is based on the health of that particular country’s economy. Any individual or company engaged in overseas business should be aware of the risks of currency fluctuations. Customers without commercial contracts expressed in domestic currency (or fixed by an agreed rate of exchange) are fully exposed to what is known as an exchange risk. Exchange risk may arise because of exchange rate movements in the period from the original commercial contract, to the time of settlement of the domestic equivalent of the foreign currency amount. Foreign exchange risk management is designed to preserve the value of currency inflows, investments and loans, while enabling international businesses to compete abroad. Although it is impossible to eliminate all risks, negative exchange outcomes can be anticipated and managed effectively by individuals and corporate entities. Businesses do so by becoming familiar with the typical foreign exchange risks, demanding hard currency, diversifying properly and employing hedging strategies. No countries of the world can produce all their necessary commodities and services. So it has to buy the commodities and services which it cannot produce or produce insufficiently from other countries. On the other hand countries producing commodities and services excess...
Words: 10160 - Pages: 41
...greater number of risks compared to conventional banks. These additional risks arise for various reasons, including the specific nature of financing contracts and legal requirements to ensure compliance with Shariah principles. In order to manage and mitigate these greater risks, an Islamic bank needs to allocate more resources than what a conventional bank would need to do for the same purpose. A recent study of risk management practices of Islamic banks in Pakistan, undertaken by the authors, reveals that the strength of risk management practices has a negative relationship with profitability. The study examined the risk management practices of all five full fledged Islamic banks operating in the country. However, it is thought that while Islamic banks would need a relatively higher commitment of resources for their risk management function and thereby adversely affect profitability, it is crucial for their sustenance in the long run. Islamic banks need to arm themselves with management skills and operational systems to cope with this environment in the face of rapid growth. A weak risk culture has been identified as a hindrance to sustainable growth of Islamic banks by EY World Competitiveness Report 2013. The risks identified by the IFSB Guidelines 2005 were the focus of the study. These include credit risk, market risk, liquidity risk, operational risk, Shariah compliance risk, equity investment risk, rate of return risk and displaced commercial risk. The risk management practices...
Words: 858 - Pages: 4
...Remodel Risk Management Plan Maitai Gordwin North Central University Abstract Project Management is the application of knowledge, skills, tools and techniques to project activities to meet project requirements (Project Management Institute, 2008; Gordwin, 2012). When applying this knowledge effective management of appropriate processes is required. Risk Management is considered most critical and includes the processes of conducting risk management planning, identification, analysis, response planning, and monitoring and control on a project. The purpose of the risk management plan is to establish framework in which the project team will identify risks and develop mitigation strategies to avoid, eliminate or convert to opportunities for a kitchen remodel project. The risk management plan will include the following: risks processes and procedures; top priority risks; risks identification; quantitative and qualitative analysis; risks monitoring and controlling; risks closure and lessons learned. Kitchen Remodel Risk Management Plan PURPOSE OF RISK MANAGEMENT PLAN The overall goal of Project Risk Management is to ensure the increase of opportunities and the decrease of risk. Risks are uncertain events or conditions that, it they occur, have a positive or negative effect on a project objective (Project Management Institute, 2008). Plan risk management is the process of defining how to conduct risk management activities for a project. The purpose of the risk management...
Words: 3254 - Pages: 14
...RISK MANAGEMENT THE NIGERIAN BANKING SECTOR FOR ABI ALCHEMY BUSINESS INTELLIGENCE BY OYINDAMOLA OMOSEBI CONSULTANT ALCHEMY BUSINESS INTELLIGENCE 5TH MAY 2012 Table of Content 1.0 Overview of Risk Management 1.1 Principle of Risk Management 1.2 The Risk Management Process 1.2.1 Risk Identification 1.2.2 Risk Assessment/Measurement 1.2.3 Risk Mitigation 1.3 Risk Management Plan 1.3.1 Implementation 1.3.2 Review and Evaluation of Plan 2.0 A Review of Risks in Banking 2.1 Overview of Risk Management Practices in Nigerian Banks 2.1.1 Reputational Risk and Confidence Crisis in the Nigerian Banking Industry 2.1.2 Operational Risk 2.1.3 Credit Risk 2.1.4 Human Resources Risk 2.1.5 Risk Associated with Mergers and Acquisition 2.2 Current Regulatory and the Way Forward 3.0 Summary and Conclusion 1.0 Overview of Risk Management There is risk in every business because of uncertainty about future events and exposure, almost everything we do in the business world involves risk. This is the probability that organization or an individual will be unable to meet some expectations set for itself during a given period or could incur a financial loss because of some known or unknown threats or events outside his immediate control. Therefore, Risk Management is the identification, assessment, and prioritization of these risks followed by coordinated and effective application of resources to minimize, monitor, and control the probability and/or impact...
Words: 11311 - Pages: 46
...methodology overhaul. Included in this paper is a discussion of the issues, opportunities, values and solutions that the firm should be considering. The 9 step problem solution model is the format used to take the reader through critical identification, evaluation and implementation of elements that will transform a problem into new growth opportunity. Lawrence Sports is a $20 million dollar revenue company that assembles and distributes sporting goods. The focus of the scenario is to provide the opportunity for the student to develop solutions to trade off issues, thus establishing stability for the firm. Mayo, who is a retailer responsible for 95% of sales, is hindering Lawrence from paying raw materials suppliers. Unfortunately, this cash positioning problem is direct result of the Lawrence credit policy and the Mayo request to delay payment until the week of April 14-20. Borrowing money to deal with supplier payables is not an option, due to the $1.2 million dollar maximized bank limit. Therefore, this paper will strategize from the perspective of a financial manager who will turn a working capital problem into the chance to design a new credit policy, implement cash management models and introduce risk mitigation techniques. A credit policy that is too liberal will continue to cause damage to Lawrence Sports. Presently both receivables and payables are unsynchronized, which is putting undue financial distress on the firm, as well threatening supplier relationships...
Words: 4123 - Pages: 17
...RISK MANAGEMENT DEFINITION OF RISK: 1. Risk in finance is defined in terms of the variability of actual returns on an investment, around an expected return, even when those returns represent positive outcomes. 2. The decisions on how much risk to take and what type of risks to take are critical to the success of the business. 3. The essence of good management is making the right choices when it comes to dealing with different risks. 4. In banking, the risk is the possibility that a borrower or counterparty will fail to meet its obligations in accordance with the agreed terms, both in terms of time and quantity. 5. Risk does not come alone – the default of one firm may cripple affiliated firms such as suppliers, customers and banks. RISK MANAGEMENT: 1. Risk Management is a planned method of dealing with the potential loss or damage. It is an ongoing process of risk appraisal through various methods and tools. 2. Risk Management involves not only to protect oneself against some risks but also to decide which risks are to be exploited and how to exploit them. 3. Risk Management covers credit decision making, performance assessment, pricing, capital computation, provisioning etc. 4. Risk Management covers the following: a. It assesses what could go wrong b. It determines which risks are important to be dealt with c. It implements strategies to deal with those risks. 5. Risk Management is not – ...
Words: 5577 - Pages: 23
...performance metrics, processes, best practices, and people into a unified structure. The framework supports communication between supply chain partners and enhances the effectiveness of supply chain management, technology, and related supply chain improvement activities. SCOR is a consensus model. It was developed and continues to evolve with the direct input of industry leaders who manage global supply chains and use it daily to analyze and improve the performance of their organizations. It features an intentionally broad scope and definitions that can be adapted to the specific supply chain requirements of any industry or application. Figure 4 and 5 SCOR model include: • Rapid assessment of supply chain performance • Clear identification of performance gaps • Efficient supply chain network redesign and optimization • Enhanced operational control from standard core processes • Streamlined management reporting and organizational structure • Alignment of supply chain team skills with strategic objectives • A detailed game plan for launching new businesses and products • Systematic supply chain mergers that capture projected savings The SCOR model helps refine strategy, define structure (including human capital), manage processes, and measure performance. Organizations that have applied SCOR to help with supply chain problem solving, process improvement, process redesign, or business process engineering, have demonstrated that SCOR is an effective enabler...
Words: 1250 - Pages: 5
...Commercial Management and Risks Job brief Commercial management is the identification and development of business opportunities and profitable management of a project from inception to completion. A commercial manager has to understand how to make profit and how the profit is reflected in its operations. In a construction site, commercial management deals with outlining the beginning of a project i.e. the negotiations and analyzing of the cost of the whole construction project and the long term profit to be yielded by the project. It is said that every construction is unique, and the unique aspect demands a high level of commercial and technical expertise. As a commercial manager, I will provide a management system that ensures proper documentation. This entails that all the documents of the contract follow a full legal procedure that is the land on which the construction is taking place and is acquired legally. The tender details are all available and the contract details of the contractor and his team are all available and ensure clarity to reduce future conflicts between the client and the contractor as Lowe and Leiringer (2006) argue. System devised Programme The system will also define a well defined target. When referring to target we can consider two cases that is the time the construction will take from inception to completion and the financial target. When dealing with the time target we ensure that the construction program is available to all team members to...
Words: 1247 - Pages: 5
...Risk Analysis Risk Seeker After analyzing the case study it is evident that the company has a good risk appetite and is a Risk Seeker. The company’s vision to create a diversified group of niche resorts and hotels in strategic locations throughout the world amplifies that it wants to create a distinct image for itself. Banyan Tree identifies strategic locations where a typical resort would play safe and charge moderate prices whereas Banyan tree would price exuberant rates and be price maker than a price taker. It ability to create a niche where others are conservative clearly shows it is ready to take higher risks for higher benefits making it a Risk Seeking organization. Its strong strategy is to enjoy higher prices for the concepts like tropical garden spa and pool villa which is a signature feature of Banyan Tree and complement it with residence and property sales and gallery operations. Banyan Tree has grown and established its presence in Asia - Pacific against the backdrop of many disasters like Terrorists attacks in 2001, breakout of SARS in 2003 and Tsunami in 2004. Some facts like the profits of Banyan Tree grew by 41.9% from 2003 to 2004 when breakout of SARS severely hit countries like China, Hong Kong, Singapore and Vietnam where Banyan Tree had its major operations proves its adaptability and strength. In 2004 when Tsunami hit even though the profits from resorts receded profits from property sales helped Banyan Tree to not run into losses. Thus multiple revenue...
Words: 2116 - Pages: 9
...devise a strategic plan to increase their revenues and funding, and second increase their student enrollment 5% each year. Their strategic objectives are to ensure they identify any potential problems that can hinder their success as well as recognize any areas of opportunity for their organization. They are currently analyzing ways to increase the student to teacher ratio by implementing a new computer software program to aid in the students learning. The board of directors is interested in benchmarking other companies to increase their knowledge and improve their chance to meet their strategic objectives. Describe the Situation Issue and Opportunity Identification There does not appear to be a framework for project management or operations with the Foundation Schools project team. Confusion and identification with the project is compounded due to the lack of a project manager. The end state vision is not clear and can be very broad and does not lead to a conclusive success of the project. The teachers of Foundation Schools do not feel compelled to change their teaching styles to incorporate the Life Skills software. Stakeholder Perspectives/Ethical Dilemmas Foundation Schools will be able to not only increase revenue for the organization, but help the lives of the students of the schools by utilizing a dedicated team and enhancing the culture in a way that stresses the importance of team work and job dedication. The balance of a strong, dedicated team is what is...
Words: 2700 - Pages: 11
...Introduction Risk is the element of uncertainty or possibility of loss that prevail in any business transaction in any place, in any mode and at any time. In the financial arena, enterprise risks can be broadly categorized as Credit Risk, Operational Risk, Market Risk and Other Risk. Credit risk is the possibility that a borrower or counter party will fail to meet agreed obligations. Globally, more than 50% of total risk elements in banks and Financial Institutions are Credit Risk alone. Thus managing credit risk for efficient management of a Financial Institutions has gradually become the most crucial task. Credit Appraisal is a process to ascertain the risks associated with the extention of the credit facility. It is generally carried by the financial institutions which are involved in providing financial funding to its customers. Credit risk is a risk related to non repayment of the credit obtained by the customer of a bank. Thus it is necessary to appraise the credibility of the customer in order to mitigate the credit risk. Corporate and small & Medium Enterprise (SME) plays a pivotal role in the economic growth and development of a country. Actually, they work as the platform for job creation, income generation, and development of forward and backward industrial linkages and fulfillment of local social needs. The credit appraisal process for Corporate and SME Division evaluate the creditworthiness of the respectivee client and helps in identification, measurement,...
Words: 794 - Pages: 4
...An Assignment On Managing Risk in Business Table of Contents 1. Introduction: 3 1.1 Theoretical Review: 3 2. Relationship between Financial and Risk Management: 4 2.1 Role of Risk Management 4 2.2 Importance of Measuring Risk: 5 3. Types of risks faced by the college: 6 4. Responsibilities for Management of Risk: 7 5. Strategies and Objectives for Risk Management: 8 6. Support of effective risk management: 11 7. Conclusion: 13 8. References: 14 1. Introduction: In the modern business world, diversifications and changes are occurred in every moment. Anything can be changed within a second who couldn’t predict. So to run a business firm in modern world we need to be more conscious about the uncertainty and changes that might affect the business entity anytime. These uncertainties are known as business risk. A business owner and the management team have to consider the factors related to risks of a project or business operation. Mismanagement of risks can be cause of termination of a business. A number of cases have occurred in the recent past which very well brings light on pro-activity on the part of the management in managing risk. Risk management therefore is an integral part of operating a business. Even for an educational institute, risk management is quite an important issue. This report has been prepared on Bridgend College which is a further education college situated at Bridgend, Wales in UK. Now a day, there are many changes and pressures...
Words: 3683 - Pages: 15
...Appendix A BANK ALFALAH LIMITED – BANGLADESH BASEL II DISCLOSURES UNDER PILLAR-III BASED ON 31 DECEMBER 2011 These qualitative and quantitative disclosures have been made in accordance with Bangladesh Bank BRPD Circular no. 10 dated 10 March 2010 and BRPD Circular no. 24 dated 3 August 2010. The purpose is to comply with the requirement for having adequate capital and the Supervisory review process under Pillar II. These disclosures are intended to assess information about the Banks exposure to various risks. 1 Capital Adequacy Ratio - As per BASEL II In terms of aforesaid Circular, available capital of the Bank is Taka 4,726,843,656 (Core capital Taka 4,641,622,449 and Supplementary Capital Taka 85,221,207) as against a minimum capital requirement of Taka 4,000,000,000 or 773,244,707 (10% of RWA as per Basel-II) whichever is higher at the close of business on 31 December 2011 thus resulting in surplus capital of Taka 726,843,656 at that date. Details are shown below: a) Core capital (Tier I) Fully Paid-up Capital/Capital Deposited with Bangladesh Bank (BB) Statutory Reserve Non-repayable share premium account General Reserve Retained earnings Minority interest in Subsidiaries Non-Cumulative irredeemable Preferences shares Dividend Equalization Account Deductions from Tier-1 (Core Capital): Book value of Goodwill Shortfall in provisions required against classified assets irrespective of any Deficit on account of revaluation of investment in AFS category Any investment in TFCs...
Words: 5912 - Pages: 24
...gratitude and acknowledge to all the individuals involved both directly and indirectly for their valuable help and guidance. This project has been an attempt to give information about the “disaster management”. I expressed my deep since of gratitude to founder and president of VidyaPrasarakMandal. I express my heartful thanks to our honorable Principal for her constant support and motivation. I express special thanks to my guide Prof. Vinodchandwaniunder whose guidence the project conceived , planned and executed. I would also like to thank the college library and its staff for patiently listening and guiding me. I would like to thank my family also. Thank You. Index Chapter 1 Introduction People around the world face a wide variety of risks arising from health,weather, and policy related shocks (Fafchamps, 2001; Dercon, 2006). However, naturaldisasters, i.e.,...
Words: 4928 - Pages: 20
