scholarly journals How Can Enterprise Risk Management Help in Evaluating the Operational Risks for a Telecommunications Company?

2021 ◽  
Vol 14 (3) ◽  
pp. 139
Author(s):  
José Ruiz-Canela López
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Operational Risk ◽  
Field Work ◽  
Risk Identification ◽  
Enterprise Risk Management ◽  
Management Tool ◽  
Self Assessment ◽  
Operational Risks ◽  
Enterprise Risk

Operational risk is defined as the potential losses resulting from events caused by inadequate or failed processes, people, equipment, and systems or from external events. One of the most important challenges for the management of the company is to improve its results through its operational risk identification and evaluation. Most of Enterprise Risk Management (ERM) scholarship has roots in the finance/risk management and insurance (RMI) discipline, mainly in the banking sector. This study proposes an innovative operational risk assessment methodology (OpRAM), to evaluate operational risks focused on telecommunications companies (TELCOs), on the basis of an operational risk self-assessment (OpRSA) process and method. The OpRSA process evaluates operational risks through a quantitative analysis of estimates which inputs are the economic impact and the probability of occurrence of events. The OpRSA method is the “engine” for calculating the economic risk impact, applying actuarial techniques, which allow estimation of unexpected losses and expected losses distributions in a TELCO. The results of the analyzed business unit in the field work were compared with standardized ratings (acceptable, manageable, critical, or catastrophic), and contrasted against the company’s managers, proving that the OpRSA framework is a reliable and useful management tool for the business, and leading to more research in other sectors where operational risk management is key for the company success.

scholarly journals Operational Risk Assessment of an English Academy in Yogyakarta

2020 ◽  
Vol 9 (2) ◽  
pp. 5-12
Author(s):  
Anastasia Filiana Ismawati
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Data Analysis ◽  
Operational Risk ◽  
Enterprise Risk Management ◽  
Operational Risks ◽  
Long Run ◽  
Enterprise Risk ◽  
Operational Activities

This research was conducted for the risk assessment on the operational activities in order to assist PT. XYZ in managing the operational activities which leads to the goals of the firm. The use of Enterprise Risk Management (ERM) can help the organization to manage the risks holistically using the intergrated methods. This research focused on the risk assessment in PT. XYZ, especially for its operating, and provided a strategy of improvement from the existing risks. The methodology used in this research is a case study with triangulation of sources as the tool to conduct the data analysis. The informants of this research are the Operational Manager of PT. XYZ and five teachers. The data was obtained by conducting interviews and there were six operational risks found which would be best to respond and to manage as soon as possible for minimizing the risks. The result of this research is to hope that PT. XYZ shall be able to manage the risks by using the ERM methodology in order to have the business in the long run and to be successfully competing in the market.

scholarly journals Decentralized Enterprise Risk Management Issues under Rapidly Changing Environments

Risks ◽  
2021 ◽  
Vol 9 (9) ◽  
pp. 165
Author(s):  
Levente Bakos ◽  
Dănuț Dumitru Dumitrașcu
Keyword(s):  
Risk Management ◽  
Risk Identification ◽  
Enterprise Risk Management ◽  
Theory And Practice ◽  
Changing Environments ◽  
Operational Risks ◽  
Multidisciplinary Cooperation ◽  
Single Person ◽  
Enterprise Risk ◽  
Management Techniques

Under the growing complexity of manufacturing processes, supply chains, markets and stakeholder expectations, enterprise risk management (ERM) has become an extremely important, probably yet still underdeveloped, management function. Enterprise risk management theory and practice should keep pace with the changes of rapidly changing environments, through new, more adaptive approaches. The article presents some of the results of a longitudinal survey at Eastern-European manufacturing organizations made on risk management techniques. The goal of the research was the study of risk management techniques under rapidly changing environments in highly standardized industries (pharmaceutical and automotive). The research was focused on the role of human resources in handling technology-related/operational risks and to what extent a decentralized risk management is present. Multidisciplinary cooperation, the selection of the teams, communication and the decision making within the team was analysed. During our research few common risk analysis routines were identified at the studied organizations. Through an interview-based qualitative survey, possible weaknesses of common risk identification techniques were identified. The article presents three risk evaluation methods with the same features. The answers provided during the interviews indicate that risk assessment techniques are mostly centralized (coordinated by a single person/unit), linear (based on If-Then construct) and rigid, definitively not suitable when quick changes are in the organization environment.

Enterprise risk management and sustainability of banks performance

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Babajide Oyewo
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Management Practice ◽  
Enterprise Risk Management ◽  
Annual Reports ◽  
Banking Reform ◽  
Content Type ◽  
Enterprise Risk ◽  
The Impact

PurposeThis study investigates firm attributes (namely level of capitalisation, scope of operation, organisational structure, organisational lifecycle, systemic importance and size) affecting the robustness of enterprise risk management (ERM) practice, the extent to which ERM affects the performance of banks and the impact of ERM on the long-term sustainability of banks in Nigeria. This was against the backdrop that the 2012 banking reform was a major regulatory intervention that mainstreamed ERM in the Nigerian banking sector.Design/methodology/approachThe study employed a mixed methodology of content, trend and quantitative analyses. Ex post facto research design was deployed to analyse performance differential of banks, with respect to the implementation of ERM, over a 10-year period (2008–2017). A disclosure checklist developed from the COSO ERM integrated framework was used to assess the robustness of ERM by content-analysing divulgence on risk management in published annual reports. The banking reform periods were dichotomised into pre- (2008–2012) and post- (2013–2017) reform periods. Jonckheere–Terpstra test, independent sample t-test and Mann–Whitney test were applied to analyse a total of 1,036 firm-year observations over the period 2008–2017.FindingsResult shows that bank attributes significantly affecting the robustness of risk management practice are level of capitalisation, scope of operation, systemic importance and size. Performance of banks improved slightly during the post-2012 banking reform period. This suggests that as banks consolidate on the gains of ERM, benefits of the regulatory policy on risk management may be realised in the long run. Result also shows that ERM enhances long-term performance, connoting that effective risk management could serve as a competitive strategy for surviving turbulence that typically characterises the banking sector.Practical implicationsThe emergence of level of capitalisation, scope of operation, systemic importance and size as determinants of ERM provides empirical evidence to support the practice of reviewing the capital requirements for banking business from time to time by regulatory authorities (i.e. recapitalisation policy) as a strategy for managing systemic risk. Top management of banks may consider instituting mechanisms that will ensure risk management is given prominence. A proactive approach must be taken to convert risks to opportunities by banks and other financial institutions, going forward, to cope with the vicissitudes of financial intermediation.Originality/valueThe originality of the study stems from the consideration that it provides some new insights into the impact of ERM on banks long-term sustainability in a developing country. The study also contributes to knowledge by exposing the factors determining the robustness of risk management practice. The study developed a checklist for assessing ERM practice from annual reports and other risk management disclosure documents. The paper also adds to the scarce literature on risk governance and risk management.

Enterprise risk management and bow ties: going beyond patient safety

2019 ◽  
Vol 26 (3) ◽  
pp. 770-785
Author(s):  
Hossam Elamir
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Patient Safety ◽  
Assessment Tool ◽  
Enterprise Risk Management ◽  
Risk Assessment Tool ◽  
Management Tool ◽  
Content Type ◽  
Enterprise Risk ◽  
Bow Tie

Purpose The growing importance of risk management programmes and practices in different industries has given rise to a new risk management approach, i.e. enterprise risk management. The purpose of this paper is to better understand the necessity, benefit, approaches and methodologies of managing risks in healthcare. It compares and contrasts between the traditional and enterprise risk management approaches within the healthcare context. In addition, it introduces bow tie methodology, a prospective risk assessment tool proposed by the American Society for Healthcare Risk Management as a visual risk management tool used in enterprise risk management. Design/methodology/approach This is a critical review of published literature on the topics of governance, patient safety, risk management, enterprise risk management and bow tie, which aims to draw a link between them and find the benefits behind their adoption. Findings Enterprise risk management is a generic holistic approach that extends the benefits of risk management programme beyond the traditional insurable hazards and/or losses. In addition, the bow tie methodology is a barrier-based risk analysis and management tool used in enterprise risk management for critical events related to the relevant day-to-day operations. It is a visual risk assessment tool which is used in many higher reliability industries. Nevertheless, enterprise risk management and bow ties are reported with limited use in healthcare. Originality/value The paper suggests the applicability and usefulness of enterprise risk management to healthcare, and proposes the bow tie methodology as a proactive barrier-based risk management tool valid for enterprise risk management implementation in healthcare.

Management Accounting And Risk Management Practices In Financial Institutions

2012 ◽  
Author(s):  
Siti Zaleha Abdul Rasid ◽  
Abdul Rahim Abdul Rahman
Keyword(s):  
Risk Management ◽  
Financial Institutions ◽  
Management Practices ◽  
Management Accounting ◽  
Enterprise Risk Management ◽  
Chief Financial Officers ◽  
Operational Risks ◽  
Enterprise Risk ◽  
Budgetary Control ◽  
Contemporary Management

Tujuan kertas kerja ini adalah untuk melaporkan hasil kajian terhadap amalan perakaunan pengurusan dan amalan pengurusan risiko di institusi kewangan. Data dikutip menggunakan borang soal selidik yang dihantar kepada 106 institusi kewangan yang tersenarai di dalam website Bank Negara Malaysia, di mana Ketua Pegawai Kewangan atau pegawai terkanan di jabatan kewangan institusi–institusi tersebut dilantik sebagai responden kajian. Analisis amalan perakaunan pengurusan berdasarkan kerangka IFAC (1998) menunjukkan bahawa amalan yang lazim diguna pakai adalah amalan di peringkat pertama, diikuti dengan amalan selepas era 1995. Dapatan ini menunjukkan bahawa amalan perakaunan pengurusan tradisional masih diguna pakai secara meluas oleh institutsi-institusi kewangan di Malaysia walapun amalan–amalan kontemporari (peringkat ke 4 dan ke atas) telah diperkenalkan. Bagi amalan pengurusan risiko, kebanyakan institusi telah melaksanakan kerangka Enterprise Risk Management (ERM) secara menyeluruh atau sebahagian. Amalan perakaunan pengurusan berkaitan penyata kewangan dan analisis nisbah dianggap sebagai memberikan sumbangan utama kepada pengurusan risiko. Kawalan belanjawan, belanjawan dan pengurusan strategik juga dianggap penting dalam pengurusan risiko operasi. Kata kunci: Perakaunan pengurusan; pengurusan risiko; institusi kewangan The aim of this paper is to report the results of a study on management accounting and risk management practices in financial institutions. The research method involved administering a questionnaire to 106 financial institutions listed on the Malaysian Central Bank’s website and the respondents were the chief financial officers (CFO) or the most senior positions in the finance department of the institutions. Based on the IFAC’s (1998) framework, it was found that the most widely practiced were the management accounting practices at Stage 1, followed by practices of Post 1995. This finding shows that despite the emergence of contemporary management accounting practices (Stage 4 onwards), traditional management accounting that focuses on financial performance and budgetary control is still widely practiced by financial institutions in Malaysia. As for the risk management practices, most of the firms have either implemented a complete or partial Enterprise Risk Management (ERM) framework. The findings from the survey showed that management accounting practices related to financial statement and ratio analysis were perceived to contribute most towards risk management. Budgetary control, budgeting and strategic planning were also perceived to be important in managing operational risks. Key words: Management accounting; risk management; financial institutions

scholarly journals The long-term relationship between enterprise risk management and bank performance: the missing link in Nigeria

2018 ◽  
Vol 13 (1) ◽  
pp. 128-138
Author(s):  
Alaa M. Soliman ◽  
Adam Mukhtar ◽  
Moade F. Shubita
Keyword(s):  
Risk Management ◽  
Banking Sector ◽  
Stock Exchange ◽  
Impulse Response Function ◽  
Measurement Model ◽  
Enterprise Risk Management ◽  
Adoption And Implementation ◽  
Enterprise Risk ◽  
And Performance

This study investigates the relationship between Enterprise Risk Management adoption and implementation, and the performance of banks using a sample of four out of the seven Strategically Important Banks (SIB) listed on the Nigerian Stock Exchange covering the period from 2005 q1 to 2015 q2. In this study, we determined a measure for Enterprise Risk Management (ERM) adoption or implementation (ERM index) using an integrated Enterprise Risk Management measurement model for the banking sector suggested by Soliman and Mukhtar (2017). A time series Johansen’s cointegration test was used to obtain evidence of the long-term association between ERM and performance, while Vector Error Correction Model (VECM) analysis was performed to gather evidence of causality relationship between ERM and performance. Finally, Generalized Impulse Response Function was used to obtain evidence of how performance responds to the introduction of a shock on Enterprise Risk Management. This study makes significant contributions to the existing body of knowledge, as it yields the first Enterprise Risk Management-performance-based empirical results that indicate a long-term relationship, causation effects, in addition to responding to performance ERM.

scholarly journals Implementation of a sustainable enterprise risk management framework: The Administrator on Duty model

2016 ◽  
Vol 5 (2) ◽  
pp. 80
Author(s):  
Linda L Vila ◽  
Vito Buccellato
Keyword(s):  
Health Care ◽  
Risk Management ◽  
Organizational Performance ◽  
Health Care Organization ◽  
Well Being ◽  
Safety Net ◽  
Risk Identification ◽  
Enterprise Risk Management ◽  
Care Organization ◽  
Enterprise Risk

Background: Today’s health care landscape requires a new standard of service delivery aimed at quality outcomes, cost-effective provisions of coordinated treatment, and access to equitable care. This standard has brought emerging risks that pose threats to the operational and financial well-being of health care organizations, especially safety net hospitals. The establishment of enterprise risk management (ERM) programs guided by the efforts of efficacious health care managers will promote deeper risk analysis, engagement of the entire health care organization, and structured, coordinated and cohesive mitigation responses to risk exposures.Objective: To establish and implement an ERM program using the Administrator on Duty (AOD) model that will promote a patient-centric paradigm of care while optimizing organizational performance and mitigating risk and exposure.Results: The AOD model significantly contributes to all phases of ERM, particularly risk identification, risk assessment, risk response and monitoring. The model, as perceived by both AODs and hospital senior leadership, provides tremendous benefits to a health care organization. These include, among many others, a substantial leadership presence, dynamic risk mitigation efforts, continuous education to staff and facilitation of problem solving and conflict resolution.Conclusions: The AOD program is a vital constituent of an ERM endeavor. AODs are pivotal to managing the global risk terrain of a health care organization and play a substantial role in promoting patient, staff and visitor safety while working to ensure potential and actual risk issues are addressed timely and appropriately.

scholarly journals An analysis of the relation between enterprise risk management (ERM) information disclosure and traditional risk measures in the US banking sector

2020 ◽  
Vol 10 (1) ◽  
pp. 61-74
Author(s):  
Raef Gouiaa ◽  
Daniel Zéghal ◽  
Meriem El Aoun
Keyword(s):  
Risk Management ◽  
Information Disclosure ◽  
Banking Sector ◽  
Risk Measures ◽  
Vital Role ◽  
Enterprise Risk Management ◽  
Annual Reports ◽  
Enterprise Risk ◽  
The Us ◽  
Measures Of Risk

The purpose of this article is to validate the quality and the relevance of enterprise risk management (ERM) information disclosure by analyzing the relation between the different dimensions of ERM disclosed in the annual report and the traditional measures of risk in the US banking sector. We use content analysis to measure ERM dimensions and a correlation analysis to document the links between risk exposure, consequences, and strategies (Aebi, Sabato, & Schimd, 2012), and the traditional measures of risk (Schnatterly, Clark, Howe, & DeVaughn, 2019) disclosed in the annual reports from 2006 to 2009. We then separately make the analysis for the period before and after the crisis to identify any effect of the crisis on ERM information’s ability to predict and reflect the banking sector’s traditional risk (Maingot, Quon, & Zéghal, 2018). Our results reveal the overall validity of ERM information in assessing traditional risk measures through a significant correlation between ERM exposure, consequences and strategies, and most of the traditional measures of risk. Finally, we confirmed the relevance and the robustness of our results through a portfolio analysis approach. This research sheds new light on the relevance of ERM information by introducing a new framework and a new methodology for assessing the validity of this information within the banking sector, where risk management plays a vital role. The results are potentially useful for banks regulators as well as for producers and users of the information on banking risks.

OPERATIONAL RISK MANAGEMENT OF SURABAYA MAIN NAVAL BASE V REPAIR AND MAINTENANCE FACILITY BASED ON ISO 31000 FRAMEWORK

JOURNAL ASRO ◽  
2019 ◽  
Vol 10 (3) ◽  
pp. 111
Author(s):  
Yunus Patabang ◽  
Suprayitno Suprayitno ◽  
Erpan Sahiri ◽  
I Made Jiwa
Keyword(s):  
Risk Management ◽  
Phase 1 ◽  
Armed Forces ◽  
Risk Identification ◽  
Enterprise Risk Management ◽  
Phase 2 ◽  
Effective Prevention ◽  
Enterprise Risk ◽  
Iso 31000 ◽  
Naval Base

Surabaya Main Naval Base V Repair and Maintenance Facility is one of the work units under the auspices of the Indonesian Navy that is tasked with carrying out the maintenance and repair of all major weapons systems of the Indonesian Navy. In carrying out their duties Surabaya Main Naval Base V Repair and Maintenance Facility has a big challenge and even there are various kinds of risks to prepare all the Indonesian Armed Forces defense equipment in accordance with the demands of need. Therefore, in this research, risk management will be carried out at the Surabaya Main Naval Base V Repair and Maintenance Facility Operational based on the ISO 31000: 2018 framework. Based on this framework, risk management will be carried out, namely how to carry out risk assessments in the form of risk identification, risk analysis, and risk evaluation for all risks in the operational field. Enterprise Risk Management (ERM) is also used to carry out in-depth risk management processes. One method used to solve existing problems is to use the House of Risk (HOR) method, which is divided into two stages. Stage 1 HOR focuses on ranking the Aggregate Risk Potential (ARP) value and with the help of the Pareto diagram the cumulative ARP value is obtained to determine the risk event (risk agent) selected, which then requires treatment on a priority scale. The results of this HOR phase 1 are then included in HOR phase 2 to rank the most effective prevention measures based on costs and resources. From the results of the HOR phase 2, further brainstorming was carried out with the Surabaya Main Naval Base V Repair and Maintenance Facility in accordance with the actions chosen for preventive actions that could be immediately carried out.Keywords: House of Risk, Enterprise Risk Management, SNI ISO 31000: 2018.

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