MANAJEMEN
FAKULTAS EKONOMI DAN BISNIS
Introduction Risk Management
Dr. Firman Pribadi, MSi
MANAJEMEN
FAKULTAS EKONOMI DAN BISNIS
Dosen Pengampu:
• FEB - UMY
• Program Pasca Sarjana – MARS UMY
• Program Pasca Sarjana – MM UMY
• Program Pasca Sarjana – S3 Manajemen UMY
• E-mail: firmanpribadi@[Link] /
firmanpribadi14@[Link]
• Office: Gedung Pasca Sarjana 2nd Floor – MARS
Lecturer room, Universitas Muhammadiyah
Yogyakarta
Risk Management
• Risk is an inevitability. We always face some risks in our daily life.
• In a personal context: Risks arise from personal activities related to
journey up to personal financial decisions
• Personal activities: accidents, poisoning, fire, illness, household
problems …
• Financial : debt/credit related to home ownership, vehicle, household
cashflow, etc
• Global risk : is a risk with higher lever/impact: Terrorism, hazardous
weather, and global financial crisis
Risk Management
• Risk Management is IMPORTANT for the
company/organizations
• In an effort to achieve the goals and objectives of the organization, every
organization faces uncertain factors that appear in the form of opportunities
and threats.
• Threats and Opportunities from internal and external factors in the company
• Threats and opportunities as a manifestation of uncertainty are risks that must
be managed to better ensure the achievement of the goals and objectives of
the organization.
• Management needs to know what makes them fail to achieve goals.
• Management needs to know how to accelerate goal attainment.
• Understanding risk helps management anticipate and manage risk properly.
• Organizations have to cope with their risks
• Facing the Risk: because they must undertake high-risk activities that are
unavoidable or undertaken to produce positive outcomes for the
organization and its stakeholders
• the risks must generate benefits for us as individuals, as well as for the
organizations we work for
• In order to achieve the benefits of risk management, not only requires the
implementation of a planned risk management process within the
organization, but also the design and successful implementation of an
appropriate and adequate risk management framework.
• The essence of risk management is to evaluate the various risk responses
and decide the most appropriate one for each case.
Risk Management
• Organizations face a wide variety of risks that can affect the results of
their operations.
• Desired overall goals can be expressed as a mission or a set of company
goals.
• Events that have an impact on the organization can hinder what it is
trying to achieve (hazard risk=Hazard RISK), increase those goals
(opportunity risk), or create uncertainty about outcomes (control
risk=control risk).
• Risk management needs to offer an integrated approach to evaluate,
control, and monitor three types of risk.
• The risk management process cannot be done separately. Need to be
supported by the framework within the organization.
Risk Management
• The components of a successful risk management framework
are
1. Communication and reporting structure (architecture)
2. Overall risk management strategy defined by the
organization
3. A set of established guidelines and procedures (protocols).
Risk Management Standards
There are several risk management standards,
1. IRM Standard and British Standard BS 31100: 2011
2. American COSO ERM framework.
3. ISO 31000, published in 2009, updated 2018.
4. Standards Australia AS 4360 (2004)
5. AS 4360 -1995
(MADE2)
Benefits of Risk Management
The reasons why organizations carry out risk management
activities:
1. Mandatory
2. Assurance
3. Decision Making
4. Effective and Efficient
Benefits of risk management
1. Mandatory: A risk management activity designed to ensure that the
organization complies with legal and regulatory obligations and customer
or client requirements.
2. Warranty: The organization's board will need an assurance that risks
have been identified and appropriate controls are in place.
3. Decision Making: Assist business decision-making. To ensure that the
business decisions are correct, the organization must carry out risk
management activities that provide structured information.
4. Improving the effectiveness and efficiency of operations within the
organization: Help and ensure that the processes and strategies chosen
by the organization must be effective and efficient and able to provide
what is needed.
Benefits of Risk Management (STOC)
• The benefits of risk management can also be identified in relation to the
three timescales of activities within the organization and ensuring that the
organization achieves effective and efficient strategies, tactics, and
operations.
• Strategy, tactics, and operations are underpinned by the need to achieve
compliance.
• Strategic, tactical, operational, and compliance (STOC) core processes and
activities cover the entire set of organizational processes
Risk Management Features (PACED)
• Failure to manage the risks faced by the organization can be caused by
failures in: Recognizing risks; risk analysis; identifying appropriate risk
response activities; establishing a risk management strategy;
communicating strategies and associated responsibilities may result in
inadequate risk management
• It is also possible that risk management procedures or protocols may be
flawed so that protocols can not deliver the expected results.
• Risk management initiatives must be proportional, aligned, comprehensive,
embedded, and dynamic = Proportionate, Aligned, Comprehensive,
Embedded And Dynamic (PACED)
Risk Management Features (PACED)
• Proportional: Efforts made in risk management must be under
the level of risk faced by the organization.
• Aligned: Risk management activities must be consistent with
other activities within the organization.
• Comprehensive: Activities must also be expansive so that each
risk management initiative covers all aspects of the organization
and all the risks it faces.
• Embedded and Dynamic: Risk management activities must be
embedded, dynamic, and support the changing business
environment faced by the organization. As with all management
activities and processes.
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FAKULTAS EKONOMI DAN BISNIS