Managing strategic and operational risk
Risk management enables a company to evaluate the opportunities and risks so that it can meet the objectives set, even if daily occurrences do not match expectations. Here’s an explanation.
Not everything in life goes to plan. It's the same for companies: an important member of staff resigns in the middle of a strategically important project. A machine breaks down in the middle of the manufacturing process. An important supplier goes bankrupt. A long-time customer switches to your competitor.
In principle, risk management involves continuously analyzing and evaluating events, actions and developments that could stop the company from reaching its objectives and fully implementing its strategy.
There is a distinction primarily between corporate risk management and operational risk management. Corporate risk management is the difference between the company’s strategy and operational risk management.
Corporate risk management involves analyzing, evaluating and managing any risks that a company may face in terms of its management, organization, markets, environment, sales procedures, finances, employees, IT system, etc. Moreover, it concentrates on the proper functioning of the company’s strategy. As a rule, companies adopt a top-down approach, analyze the worst-case scenario and draw up a risk profile.
Operational risk management enables the potential risk to a company and its commercial procedures to be analyzed systematically over the long-term. Each risk has its own importance.
The risk management procedure should be seen as a control system thanks to which operational management results are integrated into the strategic management objectives.
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Legal basis and standards
Risk management at the legal level is essential for guarding against bankruptcy or a company failing. Here is an explanation.
Risk planning: How to plan for risk management
Without sufficient preparation, the introduction of a risk management system is bound to fail. Here are four steps to follow.
Defining and managing risk: What is risk management?
Risk management is part of managing a company. In addition to its usefulness and importance, risk management helps to improve a company’s performance and efficiency.