MANAJEMEN

FAKULTAS EKONOMI DAN BISNIS

Scope of Risk Management

Dr. Firman Pribadi, MSi
MANAJEMEN
FAKULTAS EKONOMI DAN BISNIS

Master Lecturer :
• FEB - UMY
• Post-Graduate Program– MARS UMY
• Post-Graduate Program– MM UMY
• Post-Graduate Program– S3 Management UMY
• E-mail: firmanpribadi@umy.ac.id /
firmanpribadi14@gmail.com
• Office: Post-Graduate Building 2nd Floor – MARS
Lecturer room, Universitas Muhammadiyah
Yogyakarta
Scope of Risk Variable costs or
availability of raw
Pension/pension/social
benefits expenses
Desire to deliver greater
shareholder value
materials
Management

Greater transparency is The pace of business The impact of e-

needed from the change is also commerce on all aspects
organization. increasing. of business life

Risk Management Increased reliance on Greater

Increased intellectual
(becoming more) information technology
(IT) systems
property (IP) interests
complexity/dependency
of the supply chain
important because

High-profile losses and

Reputation is becoming Regulatory pressure
failures damage
increasingly important continues to increase.
reputation
 Globalization of A more volatile market
Increased competition
customers, suppliers, with less customer
in the market
and products loyalty

Product innovation Greater customer Rapid changes in

and continuous expectations, often led product technology
improvement by competitors (consumer)

Risk Management
(becoming more) Threats to the Potential for Rising incidence of
important because world/national
economy
international
organized crime
civil unrest/political
risk

Extreme weather
Diversification leads to
Threat of influenza or events resulting in
employment in foreign
other pandemics population
areas
displacement
Specialist field of risik management

• Risk management is an ever-evolving discipline.

• Coming from the insurance industry: Credit and treasury functions. Other
areas: Health and safety at work; disaster recovery planning; Business
continuity planning.
Specialist areas of risk management:
●● Project Risk Management;
●● Clinical/Medical Risk Management;
●● Energy Risk Management;
●● Financial Risk Management;
●● IT Risk Management.
Organizational Structure of Risk Management

Risks Can Happen to Anyone

 From Leader to Office Boy

 From Logistics to Marketing

(Consumer demands)
 From tangible assets to
intangible assets (Fires,
earthquakes, reputations,
pollution, demonstrations,
strikes)
Function of Risk Management Work Unit in
Company / Agency / Organization
 Risk management is designed as a part that serves to manage the risk of the company /
agency / organization.
 Become an independent function within the company / agency / organization.
 Help the company in the decision-making process.
 Act as an organizer who organizes all risk management activities in the company /
agency / organization.
 Analyze, measure and supervise risks related to the activities of all work units of the
company / agency / organization.
 Perform risk aggregation (risk aggregation and grouping).
 Update senior management related to the risk conditions of the company / agency /
organization.
TUJUAN MANAJEMEN RISIKO KORPORASI
Carry out risk management functions in the
company to ensure all risks faced by the company
can be managed effectively, efficiently thoroughly
(integrated) so that the Company's Vision, Mission
and Objectives can be achieved and in accordance
with the principles of Risk Management.

Objectives of Risk Management Not to eliminate

the risk, If you are trying to eliminate the risk to
zero, you are in the process of bankrupting your
Company.
Objectives of Implementing Risk Management

 Increase the likelihood of achieving goals and improving

performance;
 Encourage proactive management;
 Provide a solid foundation in decision-making and
planning;
 Increase the effectiveness of allocation and efficiency of
the use of organizational resources;
 Increase compliance with the provisions;
 Increase the trust of stakeholders; and
 Increase organizational resilience
BENEFITS OF IMPLEMENTING RISK MANAGEMENT

 Reduced surprises (surprises);

 Exploitation of opportunity;
 Increased planning, performance, and effectiveness of the
organization;
 Increased relationships with stakeholders;
 Increase the quality of information for decision making;
 Increased reputation;
 Protection for leaders. I
 ncreased accountability and governance of organizations
Objective M Risk = Value Added
Organization
 Success Factors for Implementing
Risk Management
1. There is a commitment to policies, processes, and action plans related to the
implementation of Risk Management.
2. The existence of a clear structure and frame of reference that can be used as a
guideline in the application of Risk Management.
3. The existence of a risk management policy that details the duties and responsibilities of
leaders and staff.
4. There is training for all leaders and staff, be it risk management training in general for
risk awareness purposes or more detailed training with the aim to run the Risk
Management Process.
5. The existence of sufficient resources for the implementation of Risk Management.
6. There is continuous monitoring of the status of Risk management.
7. Reinforcement that includes Key Performance Indicators (KPIs), individual evaluations,
remuneration, and sanctions.
8. There is awareness from everyone in the company environment of the principles of risk
management to create the right culture and understand the benefits that can be
obtained from effective risk management.
Example: HR risks
• It is too dependent on the small number of staff.
• problems between staff
• Condition and design of a rushed workplace
• Criminal acts/cultural/religious conflicts
• Feeling unfair (discrimination)
• Lack of employee training and development
• Workers' skills are inadequate
• Loss of key workers
• Health and comfort of work
• Weak cadreization of employees
• Etc.....
Examples of Financial Risks

• Weak management of assets and liabilities

• uncollected receivables
• unavailability of current cash
• Decreased ability to pay debts
• Movement of exchange rates and interest rates
• Inaccurate accounting and reporting systems
• Risk of inventory
Some Challenges of Implementing Risk
Management
o Change Management:
o Reluctance to change (resistance to change);
o "Verbal consent", but inconsistent or even "silent
resistance";
o The need for change leaders;
o Change management program;
o Less supportive organizational structures:
o Management commitments ("political will" & management
policies);
o Clarity of organizational accountability;
o Clarity of systems, procedures, reporting flows, oversight,
performance measures and sanctions against violations
Some Challenges of Implementing Risk
Management
Weak ability to apply:
Adequacy of facilities and infrastructure support:
Availability of adequate budget
adequate availability of human resources;
Need for adequate competence (need for competence) expert personnel)
and
appropriate training programs
Risk management methodologies and techniques

Selection of appropriate risk models;

Difficulty in sharing & benchmarking and preparing adequate Knowledge
Management
Common reasons not to implement risk
management?

• Perception has no risk,

• The program is too small to implement Risk Management,
• The customer will leave if he hears of the many potential problems/ risks,
• We are dealing with problems that arise,
• Identifying risks can have a devastating impact on my career,
• Risk management creates additional work for me,
• How can we predict what will happen?
• We plan to start implementing m. risks, possibly next year.
• Etc.
Reasons organizations don't implement m Risk
 Maturity Level
Adhoc: Risk management is done only when there is a need or
problem
Initial: There is an awareness of the need for risk management.
Each work unit forms its own risk management. The level of
application varies
Managed: The company forms a risk management responsible for
managing risk. Risk management tends to be centralistic.
ERM: Thorough management of an organization's risks by involving
each work function by coordinating and aggregated by the risk
management function
 8R +
4T

Stages of Risk
Management
 Risk identification

Risk Rating

Ranking against risk criteria

Stages of Risk
Management
Response/treatment to risk(Tolerate, Treat,
Transfer, Terminate)

Resource fines

Reaction planning

Risk Reporting

Review and Monitoring

 MANAJEMEN
FAKULTAS EKONOMI DAN BISNIS