Importance of Risk Management and Risk Management Process

2019 ◽  
pp. 157-176
Author(s):  
Çağla Demir Pali
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
Competitive Environment ◽  
Risk Exposure ◽  
Management Process ◽  
Significant Progress ◽  
Risk Management Process ◽  
The Subject

Importance of risk exposure and risk management practices have attracted the attention of companies, investors, and all other parties who benefit from performances of companies. Competitive environment and global effects force the companies to pay attention to manage their risks. Therefore, governmental bodies and international associations embarked on researches in risk management and as a result of these efforts regulations have been put in place. Germany, USA, and UK are the leading countries that made significant progress in risk management field by enacting laws, regulations, and issuing guidelines. But the subject is still new for some countries and difficult for companies, especially small and medium sized, to apply. The chapter starts with the benefits and importance of risk management. Then steps of risk management are explained with the examples.

Customisable framework for project risk management

2017 ◽  
Vol 17 (1) ◽  
pp. 68-89 ◽  
Author(s):  
Jennifer Firmenich
Keyword(s):  
Risk Management ◽  
Management Practices ◽  
New Institutional Economics ◽  
Future Research ◽  
Project Risk Management ◽  
Management Process ◽  
Project Risk ◽  
Content Type ◽  
Risk Management Process ◽  
Management Concepts

Purpose The purpose of this paper is to emphasise on the need for efficient and effective project risk management practices and to support project managers in increasing the cost certainty of projects by proposing a new framework for project risk management. Design/methodology/approach The author adopts a “constructivist” methodology, drawing on practices common in construction management sciences and new institutional economics. Findings The author presents a holistic and customisable project risk management framework that is grounded in both practice and academia. The framework is holistic because, amongst others, all steps of the typical risk management process are addressed. The framework is customisable, because it allows for alternative ways of implementing the project risk management steps depending on the project-specific circumstances. Research limitations/implications The framework does not address the potential unwillingness of the project players to set up a project risk management process, at all. The proposed framework has not yet been tested empirically. Future research will seek to validate the framework. Originality/value The framework is designed to account for the difficult circumstances of a complex construction project. It is intended to support decision makers in customising a practical yet comprehensive project risk management concept to the characteristics of the unique project. Although many other project risk management concepts are designed based on the assumption that actors are perfectly rational and informed, this framework’s design is based on the opposite assumption. The framework is dynamic and should adapt over time.

A TEST CASE PRIORITIZATION BASED ON DEGREE OF RISK EXPOSURE AND ITS EMPIRICAL STUDY

2011 ◽  
Vol 21 (02) ◽  
pp. 191-209 ◽  
Author(s):  
HOIJIN YOON ◽  
BYOUNGJU CHOI
Keyword(s):  
Risk Assessment ◽  
Risk Management ◽  
Empirical Study ◽  
Risk Exposure ◽  
Test Case ◽  
Test Case Prioritization ◽  
Management Process ◽  
Testing Method ◽  
Risk Management Process ◽  
Prioritization Strategy

We propose a test case prioritization strategy for risk based testing, in which the risk exposure is employed as the key criterion of evaluation. Existing approaches to risk based testing typically employ risk exposure values as assessed by the tester. In contrast, we employ exposure values that have been determined by experts during the risk assessment stage of the risk management process. If a given method produces greater accuracy in fault detection, that approach is considered more valuable for software testing. We demonstrate the value of our proposed risk based testing method in this sense through its application.

scholarly journals Governance and Risk Management: Empirical Evidence from Malaysia and

2016 ◽  
Vol 2 (3) ◽  
pp. 21
Author(s):  
Siti Balqis Noor ◽  
Rashidah Abdul Rahman ◽  
Tariq Ismai
Keyword(s):  
Risk Management ◽  
Board Of Directors ◽  
Management Practices ◽  
Islamic Banking ◽  
Management Process ◽  
Islamic Banks ◽  
Management Culture ◽  
Risk Management Process ◽  
The Board Of Directors ◽  
Supervisory Boards

<p>The perceptions of Islamic banking professionals are surveyed through a questionnaire to explore whether the process of risk management mediates board involvement in risk management and risk management practices of Islamic banks in Malaysia and Egypt. The findings of this study identified that the Islamic banks in the selected countries are somewhat efficient in their risk<br />management process. It was noticed that board involvement in risk management, process of risk management and risk management<br />among Islamic banks in Malaysia are significantly higher than their counterparts in Egypt. Furthermore, high involvement of boards in risk management significantly increases the risk management process, and in turn, leads to significantly higher risk management practices in Islamic banks. Hence, boards should take formal responsibility for setting, managing and periodically<br />assessing the risk management culture of the banks. It is expected that the outcomes of this study would help policy setters in the selected countries to develop a well-structured and harmonized risk management process that enhance risk management practices, with emphasis on the effective involvements of the board of directors and Shari’ah supervisory boards in risk management<br />practices.</p>

scholarly journals Derivative Use by Commercial Banks in Bangladesh

2015 ◽  
Vol 47 ◽  
pp. 107-115
Author(s):  
Golam Mohiuddin
Keyword(s):  
Growth Rate ◽  
Risk Management ◽  
Commercial Banks ◽  
Management Practices ◽  
Interest Rate Risk ◽  
Risk Exposure ◽  
Exposure Level ◽  
High Exposure ◽  
Risk Management Process ◽  
Intermediary Role

Derivative use by commercial banks operating in Bangladesh is hypothesized to improve their intermediary functions. The study outcome identifies the influence of derivative use on the growth of advances by commercial banks. Bank’s participation in advances increases with increase in hedging activities through futures. It has also been found that the Bangladeshi private sector commercial banks have a high exposure of risk and have externalized their risk management process. Specialized banks of Bangladesh have a low risk exposure level, but still they have moderately externalized their risk management practices. Bangladeshi public commercial banks have a large deposit base and high risk exposure but are still internalizing their risk through risk management. The policy implication of this study is that derivative use by commercial banks is likely to increase the intermediary role of banks, i.e., the increase in advances growth rate rather than investment portfolio growth rate. Commercial banks with large deposit base could gain relatively by externalizing their risk management practices since this study reveals that interest rate risk exposure of derivative users is statistically lesser than non-users.

scholarly journals Governance and Risk Management

2013 ◽  
Vol 2 (3) ◽  
pp. 21-33 ◽  
Author(s):  
Siti Balqis Noor ◽  
Rashidah Abdul Rahman ◽  
Tariq Ismai
Keyword(s):  
Risk Management ◽  
Board Of Directors ◽  
Management Practices ◽  
Islamic Banking ◽  
Management Process ◽  
Islamic Banks ◽  
Management Culture ◽  
Risk Management Process ◽  
The Board Of Directors ◽  
Supervisory Boards

The perceptions of Islamic banking professionals are surveyed through a questionnaire to explore whether the process of risk management mediates board involvement in risk management and risk management practices of Islamic banks in Malaysia and Egypt. The findings of this study identified that the Islamic banks in the selected countries are somewhat efficient in their risk management process. It was noticed that board involvement in risk management, process of risk management and risk management among Islamic banks in Malaysia are significantly higher than their counterparts in Egypt. Furthermore, high involvement of boards in risk management significantly increases the risk management process, and in turn, leads to significantly higher riskmanagement practices in Islamic banks. Hence, boards should take formal responsibility for setting, managing and periodically assessing the risk management culture of the banks. It is expected that the outcomes of this study would help policy setters in the selected countries to develop a well-structured and harmonized risk management process that enhance risk management practices, with emphasis on the effective involvements of the board of directors and Shari’ah supervisory boards in risk management practices.

Staying Afloat: Planning and Managing Climate Change and Sea Level Rise Risk in Florida’s Coastal Counties

2020 ◽  
pp. 107808742098052
Author(s):  
Robert E. Hines ◽  
Andrew J. Grandage ◽  
Katherine G. Willoughby
Keyword(s):  
Climate Change ◽  
Risk Management ◽  
Sea Level Rise ◽  
Sea Level ◽  
Management Practices ◽  
Management Process ◽  
Financial Reports ◽  
Risk Management Process ◽  
Media Reports ◽  
And Sea Level

Climate change and sea level rise present significant risks to coastal governments’ fiscal and service solvency. Current lack of focus on climate change by the U.S. federal and some state governments pressures coastal governments to develop tractable solutions to manage localized risks. This research integrates adaptive governance and capital planning literatures to develop an adaptive risk management framework. Heeding the call for research of coastal county actions to plan for and respond to climate change, we conduct content analysis of planning documents, financial reports, meeting minutes, media reports, and other documentation of all coastal counties in Florida to quantify government efforts to address climate change. Risk management practices are hierarchically categorized by focus area, risk type, and tactic and placed within the adaptive risk management process framework. A well-functioning adaptive risk management process can redefine vague climate change risks into knowable, tractable problems to address.

Measuring project risk management process for construction contractors with statement indicators linked to numerical scores

2010 ◽  
Vol 17 (4) ◽  
pp. 336-351 ◽  
Author(s):  
Grant Kululanga ◽  
Witness Kuotcha
Keyword(s):  
Risk Management ◽  
Construction Industry ◽  
Management Practices ◽  
Project Risk Management ◽  
Management Process ◽  
Project Risk ◽  
Content Type ◽  
Management Processes ◽  
Risk Management Process ◽  
Sub Saharan

PurposeThere is relatively low implementation of formal project risk management methods in practice, leading to the construction industry consistently suffering from poor project performance. This study aims to ascertain the extent to which current project risk management practices are used by construction contractors in one of the countries of the sub‐Saharan region – Malawi.Design/methodology/approachA management process tool with statement indicators linked to numerical scores was conceived that characterised a series of steps of project risk management process. To ascertain the degree to which project risk management processes were used, a questionnaire survey was employed. Data were elicited from registered Malawian construction contractors on the elements underlining a series of steps of project risk management process as espoused by the literature. Out of 84 sampled construction contractors, 51 completed questionnaires were received.FindingsApart from large‐sized and more experienced construction contractors, all the small and medium‐sized construction contractors – which constitute the largest proportion of the construction industry – were characterised by a low implementation of the various required steps for the project risk management process. The application of project risk management processes was significantly influenced by the various categories of size and experience of the surveyed construction contractors at p<0.01. Furthermore, contingence planning within the series of steps of project risk management process featured highly among the surveyed construction contractors. The majority of the variables under the series of steps of project risk management process were positively and significantly linked to progression in size and experience of construction contractors at p<0.01.Research limitations/implicationsThe study forms the basis for further research; replication of this study to other parts of world about how the actual implementation of the series of steps of project risk management process is undertaken could yield rich lessons for the construction industry.Practical implicationsThe intentional move by industry towards measuring management processes as a precursor to uncovering the root causes that underlie project success or failure to provide quick feedback for remedial action is supported by an approach such as this.Originality/valueThe originality of this paper lies in its uniqueness for a systematic approach to quantifying the project risk management processes with the view to understanding the implementation behaviours of construction contractors in one country in the sub‐Saharan region.

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