FRANS JOFLIN PANGGABEAN (29114766)

SYNDICATE 2

SIRAD HANDITO (29114730) RADEN INDRA ADIKA (29114810)

ADITYA AISAR PUTRA (29114920)

KINANTY (29114770) IEFTY RINJAYUNI NIPPARCHI (29114792)

UNBOUNDED

OPTIMISM

MAKE EXECUTIVES NERVOUS

MAKE EXECUTIVES

IDENTIFY THEIR LEVEL OF

INTERNAL RISK EXPOSURE

PROFIT GROWTH

Not all risks are unintended. Most people would argue that

risk is part of doing business, so a good risk calculator

would only include the unwanted and unrecognized risks. It

is also not the goal to find one specific number to pinpoint

the risks of a company, but to give hints for improvement

2 illuminating exercises

of the risk exposure

calculator:

Managers can ask people at different

levels and indifferent functions

Managers can calculate their

company’s current risk exposure and

then what it would have been 24

months ago

1

2

23Types of

internal

pressures:

3

1 DUE TO GROWTH

DUE TO CULTURE

DUE TO INFORMATION MANAGEMENT

Are the aggresive stretch goals set from the top

down with little or no input by subordinates?

PRESSURE FOR PERFORMANCE

YES

(high scores)

NO

(low scores)

Are operations expanding faster than our capacity

to invest in more people and technology?

RATE OF EXPANSION

YES

(high scores)

NO

(low scores)

If companies are expanding at a faster rate than the

knowledge of their employees, it can lead to additional risks

Are the people inexperienced at what they do?

IN EXPERIENCE OF KEY EMPLOYEES

YES

(high scores)

NO

(low scores)

This can be a problem in times of growth, when key managers

are employed without sufficient training

“No business can survive over the

long term without the

enterpreneurial risk taking that

drives innovation and creativity”

In this pressure points of mix culture, we can calculate the

points based on these category:

Based on information

– particularly as it

flows upward

Percentage of the

business is based on

new products and

services that have

been generated by

creative, risk-taking

employees

Based on internal

competition

Diagnostic

performance

measures

Transaction

complexity

and velocity

Decentralized

decision

making

Transaction

complexity

and velocity

Diagnostic

performance

measures

Decentralized

decision

making

Success can increase the intensity of risk

One signal that a high score is called for

is a felling of frustation

When companies expand quickly, local

managers are often given a great deal of

autonomy to make decisions

The levers are the mechanisms

managers to control the risk as a

company pursues its strategy

Have the senior managers communicated the

core values of the business in a way that

people understand and embrace?

Managers must do more and go through the

motions of writing a mission statement, visible

action, and prove the living document

Have managers in organization clearly

identified the specific action and behaviors

that are off-limit?

Managers must determine what behaviors and

actions could damage the business reputation and

declare the actions categorically off-limits

Are diagnostic control systems adequate at

monitoring critical performance variables?

Managers need to determine which performance variables matter most in

present circumstances and the design ways to ensure the key managers and

choose to focus diagnostic measures on operations, critical balance sheet assets

and the competitive environtment

Are your control systems interactive and

designed to stimulate learning?

The systems that force managers to engage in conversations about

strategic uncertainties. Any number of systems can be used interactively.

Using systems can continually assess opportunities and threats

Are you paying enough for traditional

internal controls?

Many organizations/companies was no longer use traditional internal controls

The main reasons:

To refocused and streamlined business, that make

companies more competitive

To remove the redundancy and middle management

oversight

The risk

exposure

calculator

Won’t decrease an organization’s risk

A suggestion where risk is growing

and an insight that managers can

take the steps to protect

organization’s success

THANK YOU FOR YOUR ATTENTION