Risk Management In Companies Research Articles

Public health risk management in international companies

The positive impact of the introduction of labor protection standards (OH&S) in the organization is recognized by governments, employers, and workers. However, knowledge of its effective use in small and medium-sized enterprises is still limited. This case study aims to provide a better understanding of how the implementation of integrated management systems (IMS) affects the improvement of the risk management process in the field of occupational safety in medium-sized businesses. Particular attention was paid to employee awareness of the effectiveness of risk management. The study was conducted in companies working in the field of solid waste management, certified in 2009 with IMS for quality–environment, health, and safety. The development of accidents before and after the introduction of IMS was analyzed, and Internet resources were used to describe the perception. Finally, it has been demonstrated that there has been an improvement in the accounting for accidents at work and that IMS has brought more involvement to risk management activities, but their participation has not yet been reached the desired level.

A paradigm shift in risk management in public–private partnership arrangements

Abstract This research sought to determine how public–private partnership (PPP) arrangements can more efficiently address risk management issues using the example of Mozambique as a case study. Analyses of 15 interviews in this country were conducted using the Gioia methodology. The results indicate that integrating key risk indicators into PPP contracts can improve risk management. These measures have been widely used in company risk management. The indicators can serve as monitoring, reviewing and supervising tools, allowing the integration of external factors into PPP contracts at the right time, which is hard to predict when the contracts are signed. Key risk indicators can capture megatrends, track risk evolution and develop future scenarios throughout the entire lifecycle of contracts, preventing conflicts between partners, contract renegotiations or early contract terminations by facilitating an improved understanding of contracts' current realities. The findings suggest that these measures should be applied by PPP units. The proposed approach encourages originality and empirical research-based improvements of PPP risk management frameworks and provides guidelines for future studies.

Emerging digital economy companies and leading cryptocurrencies: insights from blockchain-based technology companies

PurposeThe purpose of this study is to investigate the correlation between the price return of leading cryptocurrencies, including Bitcoin, Ethereum, Ripple, Litecoin, Monero, Stellar, Peercoin and Dash, and stock return of technology companies' indices that mainly operate on the blockchain platform and provide financial services, including alternative finance, democratized banking, future payments and digital communities.Design/methodology/approachThis study employs a Bayesian asymmetric dynamic conditional correlation multivariate Generalized Autoregressive Conditional Heteroskedasticity (GARCH) (BADCC-MGARCH) model with skewness and heavy tails on daily sample ranging from August 11, 2015, to February 10, 2020, to investigate the dynamic correlation between price return of several cryptocurrencies and stock return of the technology companies' indices that mainly operate on the blockchain platform. Data are collected from multiple sources. For parameter estimation and model comparison, the Markov chain Monte Carlo (MCMC) algorithm is employed. Besides, based on the expected Akaike information criterion (EAIC), Bayesian information criterion (BIC), deviance information criterion (DIC) and weighted Deviance Information Criterion (wDIC), the skewed-multivariate Generalized Error Distribution (mvGED) is selected as an optimal distribution for errors. Finally, some other tests are carried out to check the robustness of the results.FindingsThe study results indicate that blockchain-based technology companies' indices' return and price return of cryptocurrencies are positively correlated for most of the sampling period. Besides, the return price of newly invented and more advanced cryptocurrencies with unique characteristics, including Monero, Ripple, Dash, Stellar and Peercoin, positively correlates with the return of stock indices of blockchain-based technology companies for more than 93% of sampling days. The results are also robust to various sensitivity analyses.Research limitations/implicationsThe positive correlation between the price return of cryptocurrencies and the return of stock indices of blockchain-based technology companies can be due to the investors' sentiments toward blockchain technology as both cryptocurrencies and these companies are based on blockchain technology. It could also be due to the applicability of cryptocurrencies for these companies, as the price return of more advanced and capable cryptocurrencies with unique features has a positive correlation with the return of stock indices of blockchain-based technology companies for more days compared to the other cryptocurrencies, like Bitcoin, Litecoin and Ethereum, that may be regarded more as speculative assets.Practical implicationsThe study results may show the positive role of cryptocurrencies in improving and developing technology companies that mainly operate on the blockchain platform and provide financial services and vice versa, suggesting that managers and regulators should pay more attention to the usefulness of cryptocurrencies and blockchains. This study also has important risk management and diversification implications for investors and companies investing in cryptocurrencies and these companies' stock. Besides, blockchain-based technology companies can add cryptocurrencies to their portfolio as hedgers or diversifiers based on their strategy.Originality/valueThis is the first study analyzing the connection between leading cryptocurrencies and technology companies that mainly operate on the blockchain platform and provide financial services by employing the Bayesian ssymmetric DCC-MGARCH model. The results also have important implications for investors, companies, regulators and researchers for future studies.

ORGANIZATION OF RISK-MANAGEMENT IN EQUINOR ASA

The article reveals modern approaches to enterprise risk management based on the introduction of ERM (enterprise risk management) system, aimed at the integration of all types of risks in the company's strategy and the transition from protection from negative situations to the concept of risk appetite. The special importance of risk management for oil and gas companies in the conditions of global instability and high price volatility is emphasized. The author analyzes the experience of the Norwegian oil and gas company Equinor in the development and implementation of ERM, changes in the organization of risk management and methods of analysis and evaluation.

How big data analytics can help manufacturing companies strengthen supply chain resilience in the context of the COVID-19 pandemic

PurposeIn this paper, the authors emphasize that COVID-19 pandemic is a serious pandemic as it continues to cause deaths and long-term health effects, followed by the most prolonged crisis in the 21st century and has disrupted supply chains globally. This study questions “can technological inputs such as big data analytics help to restore strength and resilience to supply chains post COVID-19 pandemic?”; toward which authors identified risks associated with purchasing and supply chain management by using a hypothetical model to achieve supply chain resilience through big data analytics.Design/methodology/approachThe hypothetical model is tested by using the partial least squares structural equation modeling (PLS-SEM) technique on the primary data collected from the manufacturing industries.FindingsIt is found that big data analytics tools can be used to help to restore and to increase resilience to supply chains. Internal risk management capabilities were developed during the COVID-19 pandemic that increased the company's external risk management capabilities.Practical implicationsThe findings provide valuable insights in ways to achieve improved competitive advantage and to build internal and external capabilities and competencies for developing more resilient and viable supply chains.Originality/valueTo the best of authors' knowledge, the model is unique and this work advances literature on supply chain resilience.

Impact of the Business Structure on Solvency of Property-Liability Insurance Companies and Its Mediating Effect

It is an important objective for insurers to optimize their business structures to prevent business risks. This paper examines the solvency risk management in property-liability insurance companies from the perspective of business structure optimization. We construct a logical framework to explain the impact of the business structure on solvency through profitability and reinsurance behavior of property-liability insurance companies. By constructing a mediating effect model, we tested 35 Chinese-funded property-liability insurance companies and 18 foreign-funded property-liability insurance companies in China’s insurance market from 2009 to 2015. Two major results were found as follows: first, the impact of the business structure on solvency is positively significant in small Chinese-funded insurance companies as well as foreign-funded insurance companies, while it is insignificant in large Chinese-funded insurance companies. Second, the mediating effect test shows that the intermediary channel of profitability does not exist, while the intermediary channel of reinsurance exists, and the reinsurance fully mediated the relationship between business structure and solvency only in foreign-funded insurance companies. Therefore, we suggest that small Chinese-funded insurance companies should actively develop nonauto insurance and improve the risk diversification effect of the diversified business structure. On the contrary, foreign-funded insurance companies should give play to their differentiated advantages and continue to concentrate on the operation of nonauto insurance in China’s insurance market. Besides, the above two types of companies should attach more importance to the positive role of reinsurance in solvency risk management in their business development strategies.

Research on Transformer Life Forecast Based on Random Forest Algorithm

Accurately assessing the life and operating status of transformers has important guiding significance for the formulation of maintenance strategies for power grid companies, and at the same time plays a key role in the risk management of power grid companies. However, the traditional methods for predicting the remaining life of the equipment have the problems of insufficient accuracy or long data training time. In order to achieve a more accurate assessment of the life and status of the transformer, a random forest-based transformer life prediction method is constructed in this paper. Relying on the theory of big data analysis, by mining and analyzing the accumulated data of massive transformers, the life prediction model of the transformer is established and the characteristic parameters affecting the life of the transformer are extracted to predict the life of the transformer. The experimental data research demonstrates that the model can be accurate and effective Predicting the life of transformers has higher prediction accuracy than traditional methods, providing method references for asset management and risk management of power grid companies.

Risk management in construction projects in Somalia

These days, risk management and analysis are serious issues in the effective management of construction projects, because construction projects are likely to be very dynamic, productive, diverse and increasingly competitive. Risk management helps project parties such as clients, contractors and vendors/suppliers to meet their obligations to reduce negative impacts on their works. The outcomes of the risk management method include the analysis and detection of risks, the creation of building project management systems and the efficient use of resources. The aim of this article is to find out how the Somalian construction companies see the value of construction project risks and how to manage it by dispatching a questionnaire. The total questions of the questionnaire are seventeen questions and were distributed by various participants such as clients, contractors and designers. The findings show that in the implementation of risk management techniques, the Somalian construction industry varies greatly from building companies in foreign countries. The contractor needs to consider risk obligations, dynamics of risk incidents, risk tolerance and risk control skills to handle the risks effectively and efficiently. Due to the insufficiency of experience in the attitude of Somalian entrepreneurs towards risk management is very hard to change. However, as a component of their project management, the construction companies must include risk analysis in projects. The application of risk management in Somalian construction companies is small to moderate, with little difference between organizations' types, sizes and risk tolerances and individual respondents' experience.

Corporate Governance and Risk Management: A Study of Board Structure in Indonesian and Singapore Companies

This study aims to determine the effect of the board structure on business risk management. One indicator that can show the implementation of risk management is risk disclosure by the company. This study uses a quantitative approach with the research population being companies in Indonesia and Singapore included in the ASEAN Stars 2015 – 2018. Furthermore, this study uses a regression analysis technique to examine the effect of the board structure on corporate risk management. The results of this study indicate that although the structure of the board of companies included in ASEAN STARS in Indonesia and Singapore has differences, the results of the analysis of the two are not much different. This study shows that an independent board of commissioners and the frequency of meetings have a significant effect on the company's risk management. Otherwise, the composition of the female board of commissioners is proven not to affect the risk management. Overall, the results also show an increase in corporate governance activities and an increase in risk management activities. The results of this study can be used as input for potential investors to evaluate quantitative information, and other qualitative information such as the role of the board of commissioners and risk disclosure can be useful in decision making.

OPTIMIZATION OF THE RISK MANAGEMENT SYSTEM TO IMPROVE THE FINANCIAL STABILITY OF THE ENTERPRISE

The article discusses the risk management system, its optimization to improve the financial stability of the enterprise. The main task in the company's risk management activities is to systematically reduce them to the most acceptable level possible. The purpose of risk management is to ensure the financial stability and dynamism of the company's development, i.e., to optimize the risk of deviations from the financial development trend. Major tasks of the present stage of building the innovation model of the market economy in the conditions of integration of national economies into the global trading and economic space pose problems for the effective management of financial stability of economic entities, since the primary care is the formation of the competitive potential, the gross national income, the process of implementation of scientifictechnical development in new products. The article describes the process of risk management as a systematic work on risk identification, risk assessment, selection of risk management techniques, implementation of selected techniques, and evaluation of the results obtained.

ОРГАНИЗАЦИЯ КОНТРОЛЯ В СИСТЕМЕ УПРАВЛЕНИЯ РИСКАМИ КОМПАНИИ

The article deals with the problem of organizing within the framework of the functioning of the company's risk management system. The theoretical analysis of the concepts internal control, internal audit, external audit is carried out. The place of each of the control divisions in the organizational structure of the organization is shown, taking into account the risk-oriented management approach. The features are identified and the tasks facing the services in the implementation of the risk management system are characterized. The functional purpose of each division is determined in order to avoid duplication of functions and increase the efficiency of the company's business processes. The results can be useful for business leaders when implementing a risk-based management approach

Improving the effectiveness of risk management in construction companies and tips to reduce them

Improving the effectiveness of risk management in construction companies and tips to reduce them

Risk Management Application-Level Analysis in South Korea Construction Companies Using a Generic Risk Maturity Model

Risk can be defined as the effect of uncertainty on the achievement of objectives. All organizations are exposed to risk and uncertainty, and organized risk management is highly regarded in the construction industry. The Generic Risk Maturity Model (GRMM) is a tool for evaluating and identifying the current level, weaknesses, strengths, and areas that need improvement in construction companies. The purpose of this study is to diagnose and analyze domestic construction companies’ risk management maturity and status using the GRMM and to suggest areas for improvement. In this research, domestic construction companies were analyzed using GRMM by targeting 25 companies that ranked in the top 100 in terms of the 2019 South Korean construction evaluation. An online survey was conducted through e-mail and a total of 131 responses from 18 construction companies were collected and analyzed. As a result, the average maturity score (MS) of domestic construction companies was 5.6 but ambition score (AS) became 7.9 points. As a result of evaluating the risk system and execution level, the risk system (RS) score was 6.0, which was higher than the risk execution (RE) score of 5.3, indicating that the risk execution power was lower than that of the risk system. Therefore, in order to improve the level of risk management of Korean construction companies, it is necessary to improve the ability to execute risk management.

Challenges of Financial Risk Management: AI Applications

Research Question: This paper reviews different artificial intelligence (AI) techniques application in financial risk management. Motivation: Financial technology has significantly changed the business operations which required transformation of financial industry. The financial risk management needs to be restructured because the methods that have been used in the past became low effective. The artificial intelligence techniques proved their efficiency and contributed to fast, low–cost and improved financial risk management in both financial institutions and companies. Idea: The aim of this paper is to present a state of AI techniques application in financial risk management, as well as to point out the direction in which further application and development could be expected. Data: The analysis was conducted by reviewing various papers, books and reports on AI applications in financial risk management. Tools: The relevant literature systematization was used to provide answers to the question to what extent AI techniques (especially machine learning) could be used in managing financial risk management. Findings: Artificial intelligence largely improved the market risk and credit risk management through data preparation, modelling risk, stress testing and model validation. Artificial intelligence techniques can be useful in data quality assurance, text-mining for data augmentation and fraud detection. The financial technology will continue to affect the financial sector through requiring the adaption to new environment and new business models. Because of that, it could be expected that artificial intelligence will become part of the financial risk management framework. Contribution: This paper provides a review of artificial intelligence applications in market risk management, credit risk management and operational risk management. The paper identified the key AI techniques that could be used for financial risk management improvement because of financial industry transformation.

Research on the risk control of Jingdong logistics Company

Risk control is the focus of logistics company risk management. However, because the risk control is a very complex project, many logistics companies have not achieved the ideal effect of risk control. As a new type of logistics service, the third party logistice service plays an important role in China's logistics service market with the expansion of the demend for logistics service. On the basis of elaborating the current situation of Jingdong logistics company risk control, this paper focuses on identifying and analyzing the main risks faced by Jingdong logistics company, and then puts forward targeted measures to control the risks of Jingdong logistics company. It is hoped that this study can provide useful reference for the risk control of the third party logistics enterprises.

Меры «VaR в степени t» и «ES в степени t» как новые подклассы мер катастрофических финансовых рисков во множестве мер риска искажения (Measures “VaR to the Extent of T” and “ES to the Extent of t” As New Subclasses of Measures of Catastrophic Financial Risks in a Variety of Measures of Risk Distortion)

Russian Abstract: Меры риска искажения в последние годы широко используются в финансовых и страховых приложениях благодаря своим привлекательным свойствам. Целью работы является исследование вопроса принадлежности мер риска «VaR в степени t», введенных в научный оборот автором к классу мер риска искажения, а также описание соответствующих функций искажения. В данной работе вводится новый класс мер риск «ES в степени t» и также исследуется вопрос о принадлежности этих мер риска, к классу мер риска искажения, а также описания соответствующих функций искажения. В работе описывается композитный метод, как метод построения новых функций искажения и соответствующих мер риска искажения. Этот метод используется для доказательства принадлежности мер риска «VaR в степени t» и «ES в степени t» к классу мер риска искажения. Представлены также различные примеры для иллюстрации соответствующих понятий и результатов, проявляющих важность мер риска «VaR в степени t» и «ES в степени t», как подмножеств мер риска искажения, позволяющих выявлять финансовые риски различной степени катастрофичности. Автор делает вывод, что меры риска «VaR в степени t» и «ES в степени t» может быть полезно в практике риск-менеджмента компаний при оценке маловероятных рисков высокой катастрофичности. English Abstract: Distortion risk measures have been widely used in financial and insurance applications in recent years due to their attractive properties. The aim of the work is to study the issue of belonging to the VaR to degree t risk measures introduced into scientific circulation by the author to the class of distortion risk measures, as well as to describe the corresponding distortion functions. This work introduces a new class of risk measures ES to degree t and also examines the issue of belonging to these risk measures, to the class of distortion risk measures, as well as descriptions of the corresponding distortion functions. The paper describes the composite method as a method for constructing new distortion functions and corresponding distortion risk measures. This method is used to prove that the risk measures VaR to degree t and ES to degree t belong to the class of distortion risk measures. Various examples are also presented to illustrate relevant concepts and outcomes that demonstrate the importance of VaR to degree t and ES to degree t risk measures as subsets of distortion risk measures that identify financial risks of varying degrees of catastrophicity. The author concludes that the risk measures VaR to the extent of t and ES to the extent of t can be useful in the practice of risk management of companies in assessing unlikely risks of high catastrophe.

RISK MANAGEMENT AND INTERNAL AUDIT

People undertake risk management activities to identify, assess, manage, and control all types of events or situations. This can range from a single project or narrowly defined types of risk, for example, market risk, to the threats and opportunities faced by the organization. Organizations are under pressure to identify all business risks they face - social, ethical, and environmental risks as well as financial and operational - and to explain that they are being managed at an acceptable level. Risk management is a basic element of corporate governance. Management is responsible for establishing and operating the risk management framework on behalf of the board. A company's risk management brings many benefits that result from its structured, consistent, and coordinated approach. The key role of internal auditors concerning enterprise risk management should be to assure the effectiveness of risk management to management. When an internal audit extends its activities beyond this key role, it should apply certain security measures, including treating engagements as consulting services and applying all relevant standards. In this way, an internal audit will protect its independence and the objectivity of its assurance services

Features of insurance risks’ classification as the basis of risk management of insurance companies in the financial crisis

Since the global financial crisis had impacted on all aspects of insurance companies' activities, it became necessary to focus on the activities of insurers and further improve the integrated risk and capital management of global and regional insurers. The purpose of the research is to analyze differences between national and European standards for risk identification in Ukrainian insurance companies, and to provide suggestions for improving the mechanism of risk insurance management. Using the method of comparative analysis and the method of content analysis of national and international solvency standards for insurance companies, the national characteristics of the types of insurance risks and the organization of the implementation of European legislation in domestic practice were determined. By the method of generalization and deduction, the key challenges for improving the effectiveness of insurance risk management in Ukrainian practice were identified. The results of the study shows the necessity to implement a unified system of insurance risk management in Ukrainian practice, which contents national and global characteristics of the functioning of insurance markets. The results of the research have significant practical implications for insurance companies and state government insurance market and can serve as a basis for improvement of theoretical principles concerning the identification of insurance risks and implementing European experience of insurance companies in national practice.

Управління ризиками страхового ринку

Abstract. Introduction. The modern insurance market is characterized by a negative trend of reduction of companies-participants of the market. This situation is associated with a number of factors: crisis phenomena in the economy, a decrease in solvent demand, increased risks, growth of unprofitability of the insurance sector, regulatory work of the state. Рurpose. The main purpose of the study is to analyze the domestic insurance market, to identify modern methods and approaches to risk management in the market. The research methodology is based on modern provisions of statistical and economic analysis, empirical research, as well as methods of expert assessments. Results. The article reveals the risks of insurers taking into account the specifics of their manifestation, as well as the specific features of risk management of insurance companies. The problems of managing risks that affect financial stability in insurance companies in modern conditions are examined in the article. A classification of insurance risks and their impact on insurance companies are prepared. It is shown that today a wide range of techniques for estimating the insurance risks exist. The reference points that should be included in the system of risk management of the insurance organization at the present stage are determined. Conclusions. According to the results of the study, a decrease in insurance companies operating in the market, a decrease in premiums and total assets was noted. The expediency of building an optimal risk management system that affects the financial stability of the insurance business has been determined. The application of an integrated approach to risk management of insurance companies has been substantiated. Keywords: risk; risk management; insurance; insurance market; insurer; government regulation; risk classification; risk management strategy.

The Relation of Company Risk, Liquidity, Leverage, Capital Adequacy and Earning Management: Evidence from Indonesia Banking Companies

The aim of this study is to analyze the effect of Company Risk, Liquidity, Leverage and Capital Adequacy Ratio on Earning Management and whether Capital Adequacy Ratio moderates the relation between Company Risk, Liquidity and Leverage and Earning Management of Banking Companies listed in Indonesia Stock Exchange during 2014-2018. Sampling techniques uses purposive sampling based on determined criteria and data analysis is performed by multiple regression analysis using E-Views 11.0 version. The result shows that in partial, Company Risk positively, Liquidity and Capital Adequacy negatively affects significantly on Earning Management, while Leverage does not and in the other side Capital Adequacy Ratio only moderates the relation between Liquidity and Earning Management. All variables simultaneously affect weakly on Earning Management. This research implies that due to weakly impact result, banking management must reobserve the role of Company Risk, Liquidity, Leverage and Capital Adequacy Ratio in executing Earning Management.
 
 Received: 7 October 2020 / Accepted: 10 November 2020/ Published: 17 January 2021