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Finance & Accounting
Pages 5 (1255 words)
Corporate Risk Management Name: Course: Professor: Institution: City and State: Date: Corporate Risk Management Risk management is the process of maximizing opportunities while mitigating any adverse effects that come with the opportunity. It is the process of determining the likelihood of an event happening and its magnitude (Crouhy, Galai and Mark, 2006).
Risks can be beneficial if properly managed (Merkhofer, 1987). Fate favors the bold; those who dare to dream and take calculated risks. Without risks, there are no rewards. Every decision in an enterprise is based on risks. The decision to manufacture more goods in anticipation of a sales pitch is a risk, so is the decision to stock particular goods. There is no guarantee that there would-be customers or that the speculative effort will be rewarded, yet enterprises do take these risks and are rewarded for the same. Risk management is an integral part of doing business in any organization. It can be implemented at both the strategic and operational levels of the business. This necessitates the cultivation of a risk culture. There is no universally accepted risk culture or practices; this may be because different industries face different risks (Focardi and Jonas, 1998). Even if the organizations are in the same industry each organization faces their own unique risks, which will need a unique way of managing. However, the basic risk culture activities include scenario analysis; economic capital modeling and risk control self-assessments. ...
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