Risk Management
Business Lesson 8
New Vocabulary
Crisis management
антикризисное управление
Stock Analyst
фондовый аналитик
воровство, кража
опасность, риск
Strategic Risk
стратегический риск
Operational Risk
производственный риск
убытки, потери
Financial risk
финансовый риск
Hazard risk
риск опасности
Enterprise Risk Management (ERM)
общеорганизационное управление рисками
смягчать, уменьшать
колебание, неустойчивость
Holistic approach
комплексный подход
To threaten
непрерывность, целостность
злоумышленник; правонарушитель, преступник
полное изменение
переставать, прекращать, воздерживаться
судиться, оспаривать
гнаться, преследовать, следовать (за целью)
Passing off
Ведение дел под чужим именем
злобный, злонамеренный
Risk management framework
система управления рисками
Risk Criteria
критерии риска
Risk assessment
оценка степени риска
Risk sharing
распределение рисков
Risk Financing
финансирование риска
мониторинг, наблюдение
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Enterprise Risk Management
Although most companies have their bases covered should they meet with fire, theft or flood, such hazards represent only a small portion of the myriad risks they face. A survey of the Fortune 1000 found that 58% of companies that suffered a stock drop traced it to strategic risks, most commonly competitive pressures and a customer shortfall. Operational risks accounted for losses at 31% of the companies, and the remaining 11% attributed their losses to financial risks. None of the businesses cited hazard risks as the reason for their losses.

To begin dealing proactively with financial, operational and strategic risks, organizations can adopt enterprise risk management (ERM). In a nutshell, ERM allows organizations to examine all the risks they face, measure the potential impact of those risks on the long-term viability of the company, and take the appropriate steps to manage or mitigate those risks. In general, the range of risks most businesses face includes hazard risks, such as property damage and theft; financial risks, such as interest rate and foreign exchange fluctuations; operational risks, such as supply chain problems or cost overruns; and strategic risks, such as misaligned products. The key to ERM success is to address all those risks in an integrated fashion.

ERM is a compelling tool for a number of reasons. First, the process of identifying, quantifying and prioritizing risks makes them more prominent and real to executives and managers who may not have given risk management significant thought before. Second, a holistic approach to risk management takes the entire concept beyond the traditional parameters of what is insurable. It greatly expands the company's definition of risk to include anything that threatens the organization's continuity. This approach also divides the concept of risk into those risks that can help a company grow and those that will only lead to loss. Risk identification at the level of granular detail is not necessary and can even be detrimental to a thoughtful ERM effort. 'If a risk does not impact company performance, don't look at it,' says a risk management consultant. 'If someone smashes a company car, it is probably not material to business performance.
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Listen to an interview with Eric Dezenhall, author of Damage Control.
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Read the following article.
Damage Control
Crisis management, while a rare corporate discipline, is nevertheless a fundamental one because the future of the enterprise is on the line. A grieving widower appeared on Larry King Live in 1992 and speculated that his wife's terminal cancer was caused by a cellular telephone: a leading cell phone manufacturer saw its stock drop by 20 percent in the following days. Merck's recall of its arthritis drug Vioxx cost the company roughly $750 million in the fourth quarter of 2005 alone. A Merrill Lynch stock analyst estimated that damages against the company could run between $4 billion and $18 billion. Perrier was toppled from its perch atop the bestselling bottled water mountaintop after the chemical benzene was found in its product. And when the Audi 5000 was accused of 'sudden acceleration', its sales evaporated and the Audi brand essentially vanished from the U.S. market for a decade.


Companies (and individuals) that survive crises tend to have certain features in common, features that are often evident in the first moments of an engagement, is

They have strong leaders who have broad authority to make decisions.

They question conventional PR wisdom and do not worship at the altar of feel­good gurus who espouse reputation management', the that corporate

redemption follows popularity.

They are flexible, changing course when the operating climate shifts (which it usually does).

They commit significant resources to the resolution of a crisis with absolutely no guarantee that these resources will provide results.

They have a high threshold for pain, recognizing that things may get worse before they get better.

They think in terms of baby steps, not grandiose gestures, which explains Rome's success, after all.

They know themselves, and are honest about what kinds of actions their culture can - and cannot - sustain.

They believe that corporate defence is an exercise in moral authority, and that their critics are not necessarily virtuous simply because they purport to be

standing up for the 'little guy'.

They are lucky, often catching unexpected breaks delivered by God, nature, Fortune, or some other independent factor.

Enterprises and individuals under siege need all the help they can get these days.

Since the tech bubble burst and corporate scandals have come to fill the media vacuum once occupied by lionizing of messianic CEOs, it seems as if no one's exempt from hostile scrutiny. Crises are now judged not only by financial (Did the company recover?) and ethical (Was the public welfare served?) standards, but by whether the company handled its crisis effectively in the eyes of Wall Street, Madison Avenue, the plaintiff's bar, and twenty-four-hour-a-day cable news. Inevitably, the airwaves are filled with experts from various fields who will opine that the crisis is being mismanaged. (Saying all's well' doesn't make for very good TV.)

We endorse a political model of crisis management versus the more conventional public relations approach. The fundamental difference is that the political model,

which is practiced in our hometown of Washington, D.C., assumes the threat of motivated adversaries while the public relations model tends to view crises as organic and resolvable through good communications. In real crises there are often opponents - a mirror image of your own crisis management team - that want to torpedo you. That opposing team consists of competitors, plaintiffs' lawyers, the news media, politicians and regulators, short-sellers, multi-million dollar non­governmental organizations (NGOs), corporate stalkers, whistleblowers and bloggers. These opponents don't care whether you do the right thing': they care about defeating you.
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Listen to an interview with Li Bai, an expert on risk management.
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Listen to an interview with Steve Leach, Managing Director of Brand Intelligence.
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