It is only by recognizing the risks which may threaten its existence that makes it possible for a company to adopt the appropriate countermeasures to deal with these risks. The prime focus should not be on a complete overhaul of the management approach hitherto, nor on establishing another administrative department. Instead, it is preferable to develop a structured procedure for all the actions and functions relevant to the recognition and handling of risks, the elements of which of course already existwithin the management body as a whole but not in a compact and structured manner..
Experience shows that the regular and structured analysis of the company-specific risk situation noticeably improves the quality and reliability of short- and long-term planning. High-quality risk management is the ideal tool for achieving competitive advantages, ensuring the organizationally independent continuance of the company, and, finally, protecting the company's own assets. By, on the one hand, further developing existing rules, and, on the other, learning the lessons taught in times of crisis , a reasonable division of tasks which can be absorbed smoothly into the project risk management as a whole has proven to be effective.
Properly defined stages in the management cycle, clearly recognizable throughout the company, must be organised on a firm footing. Appropriate and especially useful methods of risk analysis and evaluation of those risks detected need to be put in place. Everyone within the company should be made aware of the great significance of risk management, and risk-oriented behaviour should be put into extensive practice from the top to the bottom in the everyday running of the company.
If risk management is to achieve the aim described above, it then has to be linked directly to management control. What purpose would planning and the budget serve if important risks were not taken into account?
In a medium-sized company risk management should not be farmed out to a separate risk management department. It is often aligned to the accounting department and thus the financial department. However, it is more effective when embedded in the controlling procedure, because in that department variations between the implemented data and facts, the actual value and the risk reflecting planning are identified regularly. Interfaces open all year round, and active communication with the organizational units, such as the sales process, are important. Central co-ordination enables the full collection of information and its plausible and structured processing. It can then be made accessible to the whole company.
If the risk co-ordinator in charge of the processes pays attention to the qualitative and quantitative risk assessment and handles it with sensitivity (accuracy is possible), only comparatively small steps are then needed to record risk management reliably for auditing purposes.
Experience shows that the regular and structured analysis of the company-specific risk situation noticeably improves the quality and reliability of short- and long-term planning. High-quality risk management is the ideal tool for achieving competitive advantages, ensuring the organizationally independent continuance of the company, and, finally, protecting the company's own assets. By, on the one hand, further developing existing rules, and, on the other, learning the lessons taught in times of crisis , a reasonable division of tasks which can be absorbed smoothly into the project risk management as a whole has proven to be effective.
Properly defined stages in the management cycle, clearly recognizable throughout the company, must be organised on a firm footing. Appropriate and especially useful methods of risk analysis and evaluation of those risks detected need to be put in place. Everyone within the company should be made aware of the great significance of risk management, and risk-oriented behaviour should be put into extensive practice from the top to the bottom in the everyday running of the company.
If risk management is to achieve the aim described above, it then has to be linked directly to management control. What purpose would planning and the budget serve if important risks were not taken into account?
In a medium-sized company risk management should not be farmed out to a separate risk management department. It is often aligned to the accounting department and thus the financial department. However, it is more effective when embedded in the controlling procedure, because in that department variations between the implemented data and facts, the actual value and the risk reflecting planning are identified regularly. Interfaces open all year round, and active communication with the organizational units, such as the sales process, are important. Central co-ordination enables the full collection of information and its plausible and structured processing. It can then be made accessible to the whole company.
If the risk co-ordinator in charge of the processes pays attention to the qualitative and quantitative risk assessment and handles it with sensitivity (accuracy is possible), only comparatively small steps are then needed to record risk management reliably for auditing purposes.
