Mis cw presentation group 3

Presentation by Group 3:

1.Okedi Richard 2011-M104-40027

2.Okello George Patrick 2011-M104-40028

3.Musisi Diana Namubiru 2011-M104-40033

4.Ojara Levi 2011-M104-40043

5.Oketch Anthony 2010-M104-40029

Risk Management

Presentation Lay Out:IntroductionDefinition of riskExamples of risksRisk management definedThe risk management process

Group 3 class presentation 2012/06/012

Presentation Lay Out cont’d:Strategies for managing risksOutputs of risk management processConclusion


Introduction:Every business has risks that can

negatively affect the smooth running of business activities. These risks should be identified, mitigation measures outlined and a risk management plan put in place.

Risk management is central to business strategic management.


Definition of risk:Risk is the probability that a hazard will

turn into disaster (R.A.J. Roberts, 2010: 179).

Risk is the probability or threat of damage, injury, liability, loss or other negative occurrence that is caused by external or internal vulnerabilities and that may be neutralized through preemptive actions.


Examples of risk:Financial risks like change in interest rates,

default risks;Food security risks like drought, floods,

epidemic pest and disease outbreaks;Health risks e.g. epidemic disease

outbreak;Risks reduce the chances of success of any business and therefore mitigation measures are of paramount importance (R.A.J. Roberts, 2010:180)


Risk management:

• Risk management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events or to maximize the realization of opportunities.

• Risks can come from uncertainty in financial markets, project failures, legal liabilities, credit risk, accidents, natural causes and disaster as well as deliberate attack from an adversary, or events of uncertain or unpredictable root cause.


Risk management continued:• Several risk management standards have

been developed including the Project Management Institute, the National Institute of Standards and Technology, actuarial societies, and ISO standards.

• Methods, definitions and goals vary widely according to whether the risk management method is in the context of project management, security, engineering, industrial processes, financial portfolios, actuarial assessments, or public health and safety.


The need for risk management by organizations:Diversification, e.g. launch a new product

or entry to new markets. Competitors following you into these markets, or breakthroughs in technology which make your product redundant, are two risks to consider in such cases.

Risk management helps you to identify and address the risks facing your business.


Need for risk management continuedImproves decision making, planning and

prioritization.


The risk management process:Methodically identifying the risks

surrounding your business activities;Assessing the likelihood of an event

occurring;Understanding how to respond to these

events;


Risk Management process continued:Putting systems in place to deal with the

consequences;Monitoring the effectiveness of your risk

management approaches and controls;


Strategies of managing risk:• Avoiding the risk through proper planning

of activities in which key risks are identified and mitigation measures put in place;

• Reducing the negative effect or probability of the risk, or even accepting some or all of the potential or actual consequences of a particular risk.

• Identifying mitigation measures to reduce adverse effects of disasters .


Strategies of managing risks continued:Transferring risks – insurance;Routine medical examination/avoiding

exposure – health risks;By avoiding certain activities e.g. MFIs only

do lending and avoid taking deposits, to avoid deposit risks;

Doing nothing e.g. rural farmers, just endure drought and plan to plant in the next season


Outputs of risk management process:Improved decision-making, planning and

prioritization;Efficient allocation of capital and

resources;Improved forecast of what may go wrong,

e.g. preventing a disaster or serious financial loss;

Significantly improved probability of delivering organization business plan on time and to budget.


Conclusion:Risks reduce the chances of success of any

business and therefore its important that organizations identify these risks, suggest mitigation measures and put in place plans to manage them.

These will ensure sustained success and profitability of business.


References:en.wikipedia.org/wiki/Risk_management.http://www.businessdictionaery.com.http://www.financecarriers.about.com.R.A.J. Roberts, 2010. Agricultural Finance Year Book 2010: Marrying Finance and Farming.


References continued:Paige Baltzan and Amy Phillips (2008).

Business driven Information Systems. Mc Graw Hill.

Stephen Haag and Donald J Mc Cubbrey (2002). Management Information Systems, Information for age. MC Graw Hill.


ENDTHANK YOU FOR LISTENING

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Mis cw presentation group 3

Business

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