Corporate Risk Management Essay

Risk refers to the uncertainty that surrounds future events and outcomes. It is the expression of the likelihood and impact of an event with the potential to influence the achievement of an organization’s objectives. Risk management is a systematic approach to setting the best course of action under uncertainty by identifying, assessing, understanding, acting on and communicating risk issues. The Corporate Risk Management framework is a systematic, integrated approach with a focus on managing financial risks to enhance shareholder value. The Corporate Risk Management processes are indentification of the risk, measurement , policy, process and execution. Those processes are utilised by corporate enterprises to manage the risk of fortuitous loss. Once corporate risks have been identified and their impact on the firm measured, risk management attempts to control the size and frequency of loss, and to finance those fortuitous losses which do occur. Those are the main definition about the subject, which are to be discussed in this document. Risk Management is an ongoing activity and should be carried out as a part of day-to-day business. The management of risk can only take place within an organisational framework that is inclusive of all parts of the corporate infrastructure. Without this framework, risks cannot be efectivelly discussed, communicated, compared and managed in a coherent way across the whole organisation. Risk should be a feature of any management discussion of any uncertain circumstances including new initiatives of any kind and the implementation of significant projects Risk management deals with insurable and with uninsurable risks and is an approach which involves a formal orderly process for systematically identyfying, analysing and responding to risk events throughout the life of a project to obtain the optimum or acceptable degree of risk elimination or control. Risk management is an essential part of the project and business planning cycle which requires acceptance that uncertainty exists, generates a structured response to risk in terms of alternative plans, solutions and contingencies ,is a thinking process requiring imagination and ingenuity and generates a realistic attitude in an investment for staff by preparing them for risk events rather than being taken by surprise when they arrive. Risk management involves identifying risks, predicting how probable they are and how serious they might become, deciding what to do about them and implementing these decisions. Corporates finance is the specific area dealing the financial decisions corporations make and the tools and techniques used to make the decisions. Categories of corporate financial decision making are : objectives of investment decision, financial decision and financial techniques. Corporates need a more advanced risk management approach in order to benefit from a competitive advantage from strategic risk management. They should manage risks proactively via an integrated approach with a focus on measurable financial risks. Quantitative techniques, such as cash flow-at-risk and earnings-at-risk, are necessary to look at the combined effect of risks on the formulated business objectives. Identification of risks, analysis of implications, response to minimise the risk and allocation of the contigencies are part of the process of managing the corporate risk. The objective to managing the corporate risk is to understand the risk that is known to be associated with the corporate strategy plan. This corporate risk management plan will enable the communication of the risks and risk treatments to be passed down to the strategic business units that may be impacted by the risk and maintenance of the corporate risk register. Altough risks are evaluated at the corporate level, the power they maintain over governments and consumers is phenomenal. Corporate risk startegy often implies planned actions to respond to identified risks. A typical corporate risk strategy includes the following: * accountabilities for managing the corporate risk. * A corporate risk register will be maintained as a record of the known risks to the corporate strategy plan; the types of mitigating action recorded. * Treatment plans are identified that form part of the corporate strategy and will be communicated to the SBUs, so they in turn may manage the risk which may affect them. A first estimate of potential effects can be determined using assumption analysis, decision tree analysis and the range method. These models can then be used to evaluate the effectiveness of potential mitigating actions and hence select the optimum response. Mitigating actions can be grouped into four categories and potential action : * Risk avoidance * Risk reduction * Risk transfer * Risk retention Corporate management, often referred to as corporate strategy, is concerned with ensuring corporate survival and increasing its value not just in financial terms but also by variables such as market share, reputation and brand perceptions. Thus the scope of corporate risk management is wide ranged to support the corporate strategy. A senior corporate manager owns the process and has the staff to resource the analysis and administrative activities. A board member champions the process ensuring access to information and resources. A core group of corporate broad members and strategic business unit executives can draw additional input from stakeholders such as shareholder representatives, representatives from major customers, partners and suppliers and external experts. At the corporate level a corporate strategy plan is often produced. The plan objectives are: * Create and maintain a strategy that achieves the corporate intent, corporate commitments and expectations of the customers, shareholders and other stakeholders. * Incorporate and maintain the commitments and the requirements of business sectors, specifically strategic business units and process owners that support the strategic direction. * Communicate the strategic direction and relevant objectives and target to each strategic business unit. * Manage strategic change to maintain or gain competitive advantage. The risk management process can be viewed as the application of traditional management techniques to a particular problem. Risk management is a continous loop rather than a linear process so that, as an investment or project processes, a cycle of identification, analysis, control and reporting of risks is continuously undertaken. Steps in the risk management process include: * setting risk-return goals, * identification and evaluation of the causes of potential expense or revenue fluctuation, * choice and balance of loss control and loss finance tools, and * implementation, monitoring and review. There are many opinions about those processes. For example Chapman and Ward believe that there are eight phases in the risk management process. Each phases is associated with broadly defined deliverabe, and each deliverable is discussed in terms of its purpose and the tasks required to produce it. Phases and deliverable structures: * Define : the purpose of this phase is to consolidate any relevant existing information about the project, and to fill in any gaps uncovered in the consolidation process. * Focus : the purpose of this phase is to look for and develop a strategic plan for the risk management process, and to plan the risk management process at an operational level. * Identify : the purpose of this phase is to identify where risk may arise, to identify what might be done about the risk in proactive and reactive terms, and to identify what might go wrong with the responses. Here, all the risks and responses should be identified, with threats and opportunitiess classified, characterised, documented, veified and reported. * Structure : the purpose of this phase is to test the simplified assumptions, and to provide a more complex structure when appropriate. Benefits here include a clear understanding of the implications of any important simplifying assumptions about relationships between risks, responses and base plan activities. * Ownership : at this phase client/contractor allocation of ownership and management of risk and responses occur, such as the allocation of client risks to named individuals, and the approval of contractor allocations. Here, clear ownership and allocations arise; the allocations are effectively and efficiently defined and legally enforceable in practice where appropriate. * Estimate : this phase identifies areas of clear significant uncertainty and areas of possible significant uncertainty. This acts as a basis for understanding which risks and responses are important. * Evaluate : at this stage synthesis and evaluation of the results of the estimation phase occurs. Diagnosis of all important difficulties and comparative analysis of the implication of responses to these difficulties should take place, together with specific deliverables like a prioritised list of risks or a comparison of the base plan and contingency plans with possible difficulties and revised plans. * Plan : at this pase the project plan is ready for implementation. The main processes involved in project risk management are: * risk identification, risk quantification and analysis, * risk response, selection of risk response options, * outputs from the risk response process, * outputs from the risk response process, * risk management within the project life cycle, * the tasks and benefits of risk management, * the beneficiares of risk management. Risk identification consists of determining which risks are likely to affect the project and documenting the characteristics of each one. Risk identification should adress both the internal and the external risks. The primary sources of risk which have the potential to cause a major effect on the project should also be determined and classified according to their impact on project cost, time schedules and project objectives. Inputs and outputs of the Risk Identification Process . Inputs to risk identification are given as product or service description; other planning outputs (work breakdown structure, cost and time estimates, specification requirements) historical information. Outputs to risk identification are sources of risk; potential risk events; risk symptoms; imputs to other processes. After identification risks should be ’validated’, for instance, the information on which they are based and the accuracy of the description of their characteristics should be checked. The purpose of risk identification is to identify and the project or service components, the inherent risks in the project or service, to capture the most significant participants in risk management and to provide the basis for subsequent management, to stabilise the groundwork by providing all the necessary information to conduct risk analysis. Risk quantification and analysis involves evaluating risks and risk interactions to assess the range of possible outcomes. It is primarily concerned with determing which risk events warrant a response. A number of tools and techniques are available for the use of risk analysis and quantification and the analysis process. Risk response involves defining enhancement steps for opportunities and responses to threats. Â  Risk avoidance involves the removal of a particular threat. This may be either by eliminating the source of the risk within a project or by avoiding projects or business entities which have exposure to the risk. Since the significance of a risk is related to both its probability of occurence and its effect on the project outcome if it does occur, risk reduction may involve either lowering its probability or lessening its impact ( or both ). Projects may be seen as investment packages with associated risks and returns. Since a typical project or business involves numerous stakeholders, it follows that each should ’own’ a proportion of the risk available in order to elicit a return. Basically, risk transfer is the process of transferring risk to another participant in the project. Transferring risk does not eliminate or reduce the criticality of the risk, but merely leaves it for others to bear the risk. Risk Retention .Risks may be retained intentionally or unintentionally. The latter occurs as a result of failure of either or both of the first two phases of the risk management process, these being risk identification and risk analysis. If a risk is not identified or if its potential consequences are underestimated, then the organisation is unlikely to avoid or reduce it consciously or transfer it adequately. Corporate risk refers to the liabilities and dangers that a corporation faces. Risk management is a set of procedures that minimizes risks and costs for businesses. The job of a corporate risk management department is to identify potential sources of trouble, analyze them, and take the necessary steps to prevent losses There are several steps in any risk management process. The department must identify and measure the exposure to loss, select alternatives to that loss, implement a solution, and monitor the results of their solution. The goal of a risk management team is to protect and ultimately enhance the value of a company. With corporations, financial risks are the biggest concern. Just as with standard insurance policies for physical damage, some financial risks can be transferred to other parties. Derivatives are the primary way that corporate risk is transferred. A derivative is a financial contract that has a value based on, or derived from, something else. These other things can be stocks and commodities, interest and exchange rates or even the weather when applicable. The three main types of derivatives that corporate riskmanagers use are futures, options, and swaps. Corporate risk is especially prominent during difficult times in the economy. Risk management teams will take less chances when the economy is less forgiving. They will do everything necessary to avoid additional risks, which in some cases can contribute to a decrease in credit availability and less overall spending. * Corporate Risk Management ,second edition, Tony Merna & Faisal Thani 2008 * Analysis & Evaluation,second edition, Neil Cowan 2005 * http://www.decs.sa.gov.au/docs/documents/1/DecsRiskManagementFramewo.pdf * http://www.wisegeek.com/what-is-corporate-risk.htm

Frankenstein Essay Example | Topics and Well Written Essays - 750 words - 1

Frankenstein - Essay Example Shelley's novel opens with several letters written by the storyteller, Robert Walton to his sister, Margaret Saville, in England as Walton himself is on a grand voyage to the end of the earth. The series of letters sets the stage for introducing Victor Frankenstein who Walton meets during his voyage. And then, the rest of the book recounts Frankenstein's story of his life. I was especially glued to Shelley's vivid descriptions of locales, the changing seasons, how the characters looked and their emotions at different parts of the story. The writing was so colorful that it was better than watching a movie. Shelley's story also depicted the sensibilities of the age, especially the differing natures and primary pursuits of various countries and peoples in Europe and England. It portrayed the importance that some individuals put on science and other intellectual pursuits while others choose to occupy themselves primarily with commerce and the accumulation of wealth. Shelley depicted the interplay of good and bad in human character and very successfully did so. Personally, my realization was that there is always reason why people do certain things and that this reason is primarily good in the view of the person acting on the reason. Before I read the original text of Frankenstein, I had very many misconceptions about the story. I had thought Frankenstein was the monster, or Victor Frankenstein was a mad scientist, or that a Mrs. Frankenstein actually came into being. All this was probably brought on by the different stories I heard on the same subject. I never thought that I would consider Frankenstein a literary masterpiece that has made it become a classic. Actually reading the novel has of course changed all that. It was quite easy for me to get a copy of Frankenstein because it was available in the Project Gutenberg collection. A remarkable novel such as what Mary Shelley has written over 200 years ago can now be easily accessed, read, dissected, analyzed or merely perused for enjoyment. The Gutenberg collection has over 3 million titles and over 25,000 of these are freely accessible. Indeed, in this age of computers it is quite marvelous to be able to look back at somebody's work from hundreds of years ago, learn from it and get inspired by it. Who is Victor Frankenstein (Reflective Essay) It is amazing to realize that Victor Frankenstein, the character created by Mary Shelley in her famous novel some 200 years ago may well be any one of us, today. Shelley may have over dramatized the pursuits of Frankenstein in her book but the character of Victor, his aspirations, his focused pursuit of objectives, his joys and sorrows are as human as they were then as they are now. Victor, at the story's opening is from a family with means. But as he relates the story of his parents, it was not so in the past, rather a series of ups and downs in terms of economic well-being. That initial story already depicts human histories that are true

Muscular Distrophy Essay Example | Topics and Well Written Essays - 1500 words

Muscular Distrophy - Essay Example The National Institute of Neurological Disorders and Stroke (NINDS) has defined muscular dystrophies (MD) as â€Å"a group of more than 30 genetic diseases characterized by progressive weakness and degeneration of the skeletal muscles that control movement. Some forms of MD are seen in infancy or childhood, while others may not appear until middle age or later. The disorders differ in terms of the distribution and extent of muscle weakness (some forms of MD also affect cardiac muscle), age of onset, rate of progression, and pattern of inheritance† (NINDS, 2010, par. 3). There are various types with corresponding clinical manifestations and therapy for MDs. In this regard, the essay aims to compare and contrast, one particular type, the Duchenne MD with another type, the Facioscapulohumeral MD. The causes, pathology and treatment would be discussed and evaluated in light of the two identified MDs. The Duchenne MD is considered the most common form of MD afflicting children, identified to occur in 1 out of 3,500 live male births (London, et.al. 2007, 1791). This type of MD, likewise known as pseudohyperthophy â€Å"refers to enlargement of muscles as a result of their infiltration with fatty tissue† (London, et.al. 2007, 1791). The disorder usually appears within the first three to four years of the child’s development. In a research conducted by Bogdanovich, et.al. (2005), the authors averred that â€Å"DMD is characterized by progressive and severe muscle loss that leads to loss of ambulation, with those affected often becoming wheelchair dependent toward the end of the first decade of life. The disease is caused by mutations in the DMD gene resulting in quantitative and/or qualitative disturbances in expression of the gene product, dystrophin† (par. 1). The symptoms for Duchenne MD include any or a combination of the following: â€Å"fatigue, mental retardation (possible, but does not worsen over time), muscle weakness, and

Budgeting Coursework Essay Example | Topics and Well Written Essays - 2000 words

Budgeting Coursework - Essay Example The second difference is that the first three stages entail the writing of the budgeting while the last three stages have to do with implementation. Being the writing stages, the first three steps encounter concrete discussion and contradiction among the involved stakeholders. There is a lot of debate at this stage due to its impact on the entire process. This is different from the last three stages which do not require a lot of debate. Professionals in the implementation stage are expected to meet the prerequisite of the budget with limited need for debate. They are not supposed to make any amendment to the budget unless advised. Their ideas that professionals are only expected to meet the expectation of the budget makes the second stage more technical than the first stage. This is contrary to the first section where the players have to ensure the desires of the public are met. The third difference is that the first three stages and most specifically the second and third stages invo lve the budget policy-making process. The fourth stage has to do with the implementation of the agreed policies. Policymaking process requires the politician who represents a definite section of the population. Implementation of the policy requires competent experts who are knowledgeable enough to put into practice the formulated policies. In the political section, the public is involved either through their representative in the legislature or through the media. The interest of the public is addressed during the first three stages.... Being the writing stages, the first three steps encounter concrete discussion and contradiction among the involved stakeholders. There is a lot of debate in this stage due to its impact on the entire process. This is different from the last three stages which do not require a lot of debate. Professionals in the implementation stage are expected to meet the prerequisite of the budget with limited need for debate. They are not supposed to make any amendment to the budget unless advised2. There ideas that professionals are only expected to meet the expectation of the budget makes the second stage more technical than the first stage. This is contrary to the first section where the players have to ensure the desires of the public are met. The third difference is that, the first three stages and most specifically the second and third stages involve budget policy making process. The fourth stage has to do with the implementation of the agreed policies. Policy making process requires politic ian who represent a definite section of the population. Implementation of the policy requires competent experts who are knowledgeable enough to put into practice the formulated policies. In the political section, the public are involved either through their representative in the legislature or through the media. The interest of the public are addressed during the first three stages. Implementation stages involve the experts only. Public members are passive participant in this level. On the other hand, public involvement is not pertinent. Technicians have the biggest role in the last two stages. Why the differences exist All the stages are very imperative in the budget process. One stage cannot be

Thoreaus philosophy Essay Example | Topics and Well Written Essays - 500 words

Thoreaus philosophy - Essay Example The war that took place in the year 1846-1848 has already been forgotten but somehow in some ways it was inferred as the aftermath of Uncle Sams apprehension of Manifest Destiny. The term manifest destiny was invented by a journalist and later on became a nationalist rallying cry (Mannion). Thoreau believes that the government should only impose rules that are in line with morality and it has to take into account ethical activities that will reflect a positive image on behalf of the whole country. For him, the war was unjust since its intention was to cause harm to the Mexican people (Snyder 83). On a personal note, it is never right to lead a war; in fact, it can fuel more conflict if the war gets worst. It can cause harm, not only to the soldiers, but also to the lives of the innocent people. The Mexican War is one part in history where the hunger for power is being clearly manifested. The United States determination to enter and own a territory that was never theirs is purely an immoral act. It is immoral because it is wrongful, and it is immoral because it forced people to participate in the war through the paying of taxes although their conscience tells them not to, for the reason that the government is ordering them to do so (Cummings). The main character in this situation is the government. The government that obliges all people to follow all that is written in the law. Thoreau dreams that the universal law can be applied with the individual. Moreover, he has emphasized that "government is best which governs not all" (Snyder 83). The most prominent contribution of Tho reau to world history is his stand to fight for what he thinks is right, and that is not to support the US government in its war against Mexico. Although criticized by government for his civil disobedience, Thoreau stood by his word. Men are not blinded by the reality that wars are still occurring between nations, at present. Weapons of mass destruction are still being created to destroy

Conflict, Decision Making, and Organizational Design Research Paper

Conflict, Decision Making, and Organizational Design - Research Paper Example One way is to engage negotiation strategies. Negotiation can be observed everywhere in strong and subtle ways – in the market, haggling for the best prices, commissioning a young, talented artist for a new project; or closing a huge deal with a known company. There is more to negotiation than mere compromise. Negotiation is an interaction that occurs when 2 or more parties attempt to agree on a mutually acceptable outcome in a situation where their preferences for outcomes are negatively related. Two opposing positions come to a compromise. Lax and Sebenius (1986) add that in negotiation, a better outcome through joint action is achieved rather than when each party would act independently. The element of conflict also arises due to varying preferences and priorities of the different parties. Negotiation becomes a way to resolve such conflicts and compromise on a joint decision, usually, the middle ground stand. McGrath (1984) claims that negotiation is a mixed-motive process - the negotiating parties cooperate to reach an agreement and at the same time, compete to fulfill their own interests. From these definitions of negotiation, it is apparent that negotiators should possess several skills in order to be successful in getting what they bargain for. At the same time, negotiation entails multiple processes that occur simultaneously within each negotiating party such as decision making, research, critical judgment and effective communication, among others. Negotiating strategies involve bringing opposing parties together face to face wherein each individual or group brainstorm on their decisions for the negotiation. When each of the negotiating party becomes aware of the other’s proposed stand or idea, it then becomes the time for bargaining. In the case of business negotiations, this is the space between their reservation prices for the product or service offered and the assumed reservation price of the other party. They come up with their own BAT NA or their â€Å"best alternative to a negotiated agreement†, a strategy proposed by Fisher & Ury (1981). Thompson and Leonardelli (2004) explain that when the first cards set out the table during negotiations fail, then BATNA becomes a fall back alternative of negotiators. BATNA considers all options available for both parties including the reservation price, market information and aspiration levels of each negotiating party. Knowing the other party’s alternatives will help facilitate one’s decision-making process if these are compared with one’s own alternatives (Buelens & Van Poucke, 2004). 2. Determine how evidence-based management could be applied to the work environment you researched. Reay, Berta & Kohn (2009) defined evidence-based management as being â€Å"about making decisions through the conscientious, explicit, and judicious use of four sources of information: practitioner expertise and judgment, evidence from the local context, a critical evaluation of the best available research evidence, and the perspectives of those people who might be affected by the decision† (as mentioned in Briner, Denyer, and Rousseau, 2009, p. 19) Applied in the work environment of health care and health insurance this definition would translate to upholding high standards of care. Integration of the best available evidences from thorough research and practice should deliver high quality patient-centered care considering the patient’

Jane Cazneau Essay Example for Free

Jane Cazneau Essay Hudson posits a Native American grandmother, although there is no solid evidence of this. Her first marriage apparently dissolved, but there is no divorce record. She may or may not have had an affair with Aaron Burr, an early mentor. Hudsons most significant claim is that Jane Storm is the journalist who coined the phrase manifest destiny (pp. 60-62). Hudson argues that later historians have simply assumed that John OSullivan wrote the Democratic Reviews many unsigned editorials. But Hudsons computer analysis (Appendix B) of OSullivans and Storms signed works shows that the grammatical errors in the famous editorial that first contained the phrase exhibit a much closer correlation with those commonly made by Storm than with those made by OSullivan. What is certain is that she migrated to pre-revolutionary Texas and speculated in land grants and immigration schemes. Writing under the pen name Montgomery (later, Cora Montgomery), Storm became a regular correspondent of Moses Y. Beachs New York Sun. When war broke out, Storm accompanied Beach and his daughter on a covert peace mission to Mexico in late 1846. The Beach mission has long been clouded with uncertainty about its purposes and accomplishments, and so Storms role in it is similarly in doubt. Nonetheless, she was clearly an important element, as neither of the Beaches knew Spanish and President James K. Polk had a private interview with her after her return. After the war, Storm continued to favor U. S. xpansion into Latin America and the Caribbean, especially through annexation. Although Hudson maintains that Storm was not a strong proponent of All Mexico during the U. S. -Mexican War, some have credited her with leading the movement. She had contact with Cuban, Mexican, and Nicaraguan filibustering groups. She married diplomat Williams L. Cazneau in 1849 after a long acquaintance but still worked as a journalist for numerous publications, wrote about her travels, and remained active in Democratic P arty politics. She secured a diplomatic mission to the Dominican Republic for her husband and worked with him to gain U. S. access to Samana Bay. Jane Storm Cazneau died in a shipwreck during a storm at sea in 1878. Many questions about her activities and the extent of her influence remain unanswered. Barring the emergence of new documentary collections, Hudsons biography is the most complete picture of her life we are likely to have. As such it is a useful addition to the literature on nineteenth-century U. S. expansionism.