Strategic Risk Management

Description

Risk is good: it is a source of potentially superior profits.  Risk is bad: it can damage profitability and the future of the organisation.  A strategic risk is any risk that the organisation faces which might affect that organisation’s ability to meet its core objectives. Managing strategic risks, both risk taking and risk reducing, is a key concern of most organisations that need risky innovation but still have key baseline financial or other objectives to meet.

This unit aims to disentangle the components of strategic risk and then encourages students to create new strategic risk management processes applicable in the white heat of busy organisations. This course is intended to equip the general manager with sufficient knowledge to be an active and informed participant in organizational decisions regarding strategic risk management. Tools and techniques will be offered to bring alive conceptual frameworks and theory.

The journey into strategic risk management will include stops in a number of disciplines including strategic decision making under uncertainty, reputation risk, managing risks in emerging or unfamiliar markets, business continuity, enterprise wide risk management and managing risk as part of good corporate governance and reputation management.

Learning objectives

Students will:

·        Understand and explain the role of risk management in a range of contextual settings

·        Recognise the strategic importance of risk management to the success of the organisation

·        Appreciate the changing nature of strategic risk management

·        Understand the impact of corporate governance regulation on risk management processes

·        Understand the role of strategic risk thinking in effective business processes and decision-making across the enterprise

·        Understand the fundamentals of building strategic risk management  processes and attitudes in organisations

·        Apply risk management knowledge relating to specific organizational functions in both domestic and international contexts

·        Utilise analytical tools, and understand different risk management perspectives which will provide a sound basis for strategic risk management decisions

Relevant activities are:

·        Critical thinking and creativity: managing creative processes in self and others; organising thoughts, analysis, synthesis, critical appraisal. This includes the capability to identify assumptions, evaluate statements in terms of evidence, detect false logic or reasoning, identify implicit values, define terms adequately and generalise appropriately

·        Problem solving and decision making: establishing criteria, using appropriate decision techniques including identifying, formulating and solving business problems; the ability to create, identify and evaluate options; the ability to implement and review decisions

·        Information and knowledge: scanning and organising data, abstracting meaning from information and sharing knowledge

·        Two-way communication: listening, negotiating and persuading or influencing others; oral and written communication, using a range of media, including the preparation of business reports

·        Effective performance within a team environment and the ability to recognise and utilise individuals’ contributions; in-group processes; team selection, delegation, development and management

·        Ability to conduct research into issues involving strategic risk management in organisations

·        Learning through reflection on practice and experience

Learning outcomes

By the end of the module students will be able to:

  • recognise the importance of a risk and uncertainty management based approach to strategy development
  • understand the contribution probability makes to strategic risk management and its limitations
  • use a range of  tools and techniques to manage risk
  • discuss the range of risks facing organisations in the markets and cultures they operate in
  • recognise heuristics and biases in decision making under uncertainty and to reflect more generally on decision making
  • reflect upon risk appetite, culture and communication
  • consider project management risks
  • understand the characteristics of High Reliability Organisations
  • structure an Enterprise Risk Management system
  • recognise the importance of managing reputational risks
  • consider the uses and controversies surrounding the major credit rating services
  • have a process for developing a Business Continuity Plan

Please note: This information is subject to review and change without notice.