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    Babia Gwapa

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    Joejen Jongco Jarabe
    This document discusses risk and organizational risk management. It defines risk and lists four categories of organizational risk: operational, financial, market-based, and hazard. It also outlines four potential outcomes for managing risks: avoidance, transfer, reduction, and retention. Finally, it discusses several corporate governance perspectives and outlines steps for monitoring and controlling risks.

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    Babia Gwapa

    Uploaded by

    Joejen Jongco Jarabe
    14 views1 page
    This document discusses risk and organizational risk management. It defines risk and lists four categories of organizational risk: operational, financial, market-based, and hazard. It also outlines four potential outcomes for managing risks: avoidance, transfer, reduction, and retention. Finally, it discusses several corporate governance perspectives and outlines steps for monitoring and controlling risks.

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    This document discusses risk and organizational risk management. It defines risk and lists four categories of organizational risk: operational, financial, market-based, and hazard. It also outlines four potential outcomes for managing risks: avoidance, transfer, reduction, and retention. Finally, it discusses several corporate governance perspectives and outlines steps for monitoring and controlling risks.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    14 views1 page

    Babia Gwapa

    Uploaded by

    Joejen Jongco Jarabe
    This document discusses risk and organizational risk management. It defines risk and lists four categories of organizational risk: operational, financial, market-based, and hazard. It also outlines four potential outcomes for managing risks: avoidance, transfer, reduction, and retention. Finally, it discusses several corporate governance perspectives and outlines steps for monitoring and controlling risks.

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    © All Rights Reserved
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    of 1

    HANDOUTS • Stakeholder theory—acknowledges agreements

    with multiple stakeholders that can create


    Risk and Perspective incremental value and/ or lead to subsequent risk
    Risk- is a concept linked to human expectations. It events if neglected or abused
    indicates a potential negative effect on an asset that FOUR POTENTIAL OUTCOMES OF THE DECISION:
    may derive from given processes in progress or given
    future events. 1.Risk Avoidance

    FOUR CATEGORIES OF ORGANIZATIONAL RISK: Whenever a risk generated by a project is not


    consistent with the company risk policy, the decision
    1. Operating/Operational Risk maker should avoid this particular risk.
    a. Business operations (efficiency, supply chain, 2. Risk transfer
    business cycles
    Risk Transfer, Also Known as Risk Hedging Instead of
    b. Information technology avoiding risk altogether, management may decide to
    2. Financial Risk assume the risk generated by a project and pass
    along this risk to a third party through risk hedging.
    a. Credit (default, downgrade)
    3. Risk reduction
    b. Price (commodity, interest rate, exchange rate)
    Measures to reduce the frequency or severity of
    c. Liquidity (cash flow) losses, also known as loss control. May include
    engineering, fire protection, safety inspections, or
    3. Market-Based Risk
    claims management.
    4. Hazard Risk
    4. Risk Retention
    a. Fire and other property damage
    Retention is the decision to maintain the risk in the
    b. Theft and other crime, personal injury enterprise. Typically, risks are retained in two
    different ways.
    c. Diseases
    Risk Monitoring Risk monitoring and control
    Corporate Governance Perspectives: includes the following:
    • Agency theory—align the interests of internal • Identify, analyze, and plan for new risks
    agents (executives/managers) who display strong
    self-interest with those of the shareholders (owners) • Track identified risks and monitor trigger
    conditions
    • Transaction cost theory—reduce costs of
    transactional hazards through internal corporate • Review project performance information such as
    governance mechanisms, which cannot be handled progress/status reports, issues, and corrective
    by external market mechanisms actions

    • Stewardship theory—general human motives of • Re-analyze existing risks to see if the probability,
    achievement, altruism and meaningfulness should impact, or proper response plan has changed
    be managed and guided in the most opportune
    • Review the execution of risk responses and
    manner
    analyze their effectiveness
    • Resource dependence theory—highlights
    • Ensure proper risk management policies and
    corporate dependence on external relations and
    procedures are being utilized
    sees governance as a vehicle to ensure continued
    access to essential resources

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