Risk Management Assignment Help

Risk Management Assignment Help

Executive Summary

The paper aims at finding the ways of properly managing the risks in educational organization of Raffles. Various risk management techniques which are already followed by the Raffles Education Corporation are mentioned and analysed in the paper. Risk is a negative event that may probably occur if it did that will affect the achievement of the organizational intended objective. The Risk may be of both internal and external .Internal Risk is within the control of the management of the organization. External Risk is those which are systematic in nature and it cannot be in the control of the organization. The risk of the profit organization is not creating shareholder value but risk of the non-profit organization not creating stakeholder value. Risk management is the managing process of identifying qualifying planning and mitigating the risks of an organization. Raffles Education Corporation Limited is an educational institution main aim is to create stakeholder value.ie. students, society, teaching and non-teaching staff. A brief introduction as to the business details of Raffles Education Corporation and risk management in general was provided before beginning any analysis. The objectives of the paper were clearly stated in the following chapter. In the paper, based on the interpretations, the definition of risk was classified into objective interpretations and subjective interpretations. In an objective interpretation the probabilities are considered to exist. One will depend upon logical and statistical approach to estimate the probabilities. In a subjective interpretation, one considers probability as a mere superstition. In a risk management plan, the risks faced by the organization in the future are detailed along with estimation as to their impact and consist of effective measures to counter the issues arising out of it. Knowledge and analysis of the area and threats in the determined area is crucial. The process involves stating the active risk management which provides the necessary risk management techniques which are used by the REC management. The paper further provides information as to the board of directors and the risk management committee of the Raffles Education Corporation. Based on the discussions and reviews carried out, a suitable conclusion was made at the end of the paper.

1. Introduction

Risk management is an irreplaceable function in any organization. In a sensitive field such as education where the level of risk is high, the management would need to concentrate on the risks and come up with strategies to tackle the risks in a most efficient way. There has been various methods and techniques perfected over the years for controlling the risks and optimizing the capacity of an organization. Considering the suitable among these techniques for the educational organization of Raffles Education Corporation Limited, the report here intends to limit and manage the risks faced by the organization. The objectives are clearly stated in the following chapter in order to proceed with the report. 

2. Glossary of Terms

GTI

Governance Transparency Index showing the company’s transparent nature with the environment

KPI

Key Performance Indicators that are helpful in measuring the performance of organization

Risk Appetite

The nature and number of risks a company can take in order to meet their strategic objectives

Risk Assessment

Assessment of the risks faced by a certain organization

3. Risk Management Organization

Risk

The number of definitions referring to Risk is numerous. Risk in common includes uncertainty or probability of an event to likely occur. Based on the interpretations, the definitions of risk can be classified into objective interpretations and subjective interpretations. In an objective interpretation the probabilities are considered to exist. One will depend upon logical and statistical approach to estimate the probabilities. In a subjective interpretation, one considers probability as a mere superstition.

Frank Knight (1921) gave one of the notable objective interpretational definitions for risk. According to him, uncertainty should be considered different from that of a risk for the sake of a research. Though this approach has never been applied, it is necessary to do so in order to clearly understand the meaning of Risk. Frank believes that risk can be measured as something that can be quantified. Quantifiable measurement enables a manager or CEO to react well for a risk which they are faced with. This approach leads to the basic foundation of risk management which will be seen later in this chapter. However, it must also be noted that sometimes a distinct variation can be found on risk that would hardly represent the above mentioned measurement in any ways. It reaches far beyond comprehension and has certain differentiating characters that make this phenomenon unique and mostly dangerous when uncontrolled. Thus from the definition given by Frank, risk (or measurable uncertainty as which it is commonly known back then) has opposing characters to an unmeasurable which makes it not really an uncertainty. In other words, uncertainty does not refer to risk but it is only included in it.

Although there are various definitions of risk, all highlighted the following aspects:

Uncertainty: There is no assurance that an event will happen.

Loss: If the event occurs leads to unintended consequences

Risk is defined as "Risk is the likelihood of loss."

The risk has different impacts depending on the importance that represents for the activity that is being developed and the stage of development it is found.

However, it considers that the risk is not a certainty but a possibility. "The key is to compare each potential negative consequence of the risk to potential benefits and opportunities"

Risk Management

Risks are unavoidable in business or in any organization. Sometimes they can be avoided but other times they must be faced so as to make a worthy gain or to earn a favourable position in the market. Risk management is defined as the process to identify, analyse and quantify the probability of losses and side effects off a risk, as well as the preventive and corrective actions corresponding to be undertaken. It prevents a company or an organization from falling into bankruptcy because of the unfavourable probabilities which are most likely to arise in the course of business. The term Risk Management is applied to a number of disciplines such as statistics, economics, psychology, social sciences, biology, engineering, systems analysis, decision theory, among others. In all of them they have a different meaning, although the basis on which it is based is the same. Risk management in general prevents the company from a risk. It does not stop a risk from existing, instead it helps to formulate strategy with the help of which a risk can be faced with optimal effectiveness (Flanagan and Norman, 1993).

Definition

Risk management is the discipline of living with the possibility of the occurrence of future events that may cause adverse effects. This definition awards this discipline a proactive basis, allowing a glimpse of previously possible difficulty that might jeopardize the development of an activity. In Risk management forecasting is used to find the risks which are to occur in future and evaluate them by means of financial measurements. Based on the evaluation suitable set of procedures or strategies are identified and are used for effectively managing the impact of such risks. Managing is done either through avoidance or minimization (Knight, 1921).

3.1 Objectives of the Risk management plan

Risk management plan Objectives

Risk management plan

A manager as a counter measure for the risk designs a risk management plan. In a risk management plan, the risks faced by the organization in the future are detailed along with estimation as to their impact and consist of effective measures to counter the issues arising out of it. Knowledge and analysis of the area and threats in the determined area is crucial. It must then be admitted that the insular knowledge on the problem of risk and possibilities to modify its conditions constitutes one of the determining elements given the extent of the damage caused. Moreover, there is a need to reduce its own vulnerability, and to establish the plan to follow to reduce/ avoid the risks (Assessment, 2003).

Process

The integrated approach to risk management puts emphasis on ex-ante and ex-post measures and de- depends essentially of: (a) identifying and risk analysis; (b) design and implementation of measures of prevention and mitigation; (c) financial protection by transfer or risk retention; and (d) preparations and actions for subsequent phases of care, rehabilitation and reconstruction (Culp, 2002).

Activities Risk Management

Tufano (1996), mentions of three basic activities in Risk Management. They are

The worst is yet to come:

This stage is the basis of risk management. It allows the manager to identify all possible difficulties that may occur throughout the development of project or in the course of business. To the extent that a thorough reconnaissance of the main obstacles is made to carry out the process will be treated effectively so that they do not become events that create more difficulties. For this purpose, it is necessary to have good procedures, hopefully standardized requirements definition, as this will allow, along with experience in the development, a repository of data to get an idea on the next project for example, analysing the strengths and weaknesses of the team.

Determine which risks are relevant 

Here, it should be noted that there are three types of risk.

Ø The risks which by their impact or probability of occurrence are so irrelevant that by making an analysis of cost versus benefit obtained as a conclusion alone that it is better not to consider them. 

Ø Those risks which have a significant probability of occurrence and impact in which case it is necessary to analyse it and develop strategies to mitigate or control. This is the common risks.

Ø Those risks in which impact can possibly treated. In such case, there is no choice but to accept them.

Implement strategies to counteract its effects

Not only enough to identify what are the main risks that could affect the development, it is also necessary to maintain procedures that would indicate the steps should be followed for the proper treatment of risks. In this regard it may be noted that there are basically two plans for the treatment of risks:

Ø Mitigation strategies: strategies that help reduce the effect would cause the eventual onset of risk implemented. This plan requires actions to be taken and different options to mitigate the impact adversity. In addition to include criteria that allows early glimpse of the presence of risk.

Ø Contingency strategies for this: Planning to partially or completely eliminate the adverse effect of risk implemented. Contingency strategies involve a greater expenditure of resources, therefore, must be made carefully and only for those whose impact and probability risks warrant (Doherty, 2000).

Risk management is an on-going process through all phases of development, since aside from trying to discover risks, create mitigation strategies.

The objectives of the risk management plan for REC are designed in such a way to manage the risks of the company and thereby assist in achieving the business objectives of the company.

  1. To develop an understanding over the internal risks which are likely to be faced inside the company in the near future
  2. To increase the knowledge related to the risks faced in the competitive market and thereby increase the favorable position of the company
  3. To effectively protect the earnings of the company by limiting and controlling the risks surrounding it
  4. To improve the effectiveness and the ability of REC in quickly responding against reduced probability, uncertain future and unexpected risks.
  5. To reduce the costs incurred by the company which would in turn reduce the risks faced in individual projects taken by the company
  6. To optimize the capacity of the company in utilizing its assets as this would help in controlling the risks related to the assets of the company.
  7. To allocate the capital of the company more efficiently and thereby controlling the debt equity ratio of the company as this helps in reducing the risk of liability of the company.

The expected outcome of the objectives is positive. Through the objectives it is believed possible to achieve optimization in the performance of REC. The company however lacks concentration on the part of risk planning. The number of meetings and the decisions taken over a particular year is either limited to two or nil. Hence, by achieving the objectives of the risk management plan, the company hopes to increase its financial position by increasing its earning without faltering in any of the risks faced by it. The business objectives of REC which was stated in the previous assignment will also be achieved if the objectives stated above were to be achieved (Brotby, 2001).

3.2 Risk Management Policy

The board of REC is ultimately responsible for the risk management of the company. The board strategically directs the management in an effective way possible. As part of risk management the board also makes approval of the capital and financial plans made by the management. After approval, the board monitors the execution of the plan to ensure an uninterrupted process that moves in an effective way. This enables the company to avoid unnecessary risks which would otherwise endanger the financial position of the company. The board reviews the performance of the management at regular intervals. It helps to make improvements wherever it is found necessary (Froot and Stein, 1998).

The board of REC organizes a risk management committee whose job will be to foresee all the risks in the near future and strategically make plans which will restrict the impact of such risks on the company. 4 directors from the board of REC manage the committee. Through its risk management committee, Raffles Education Corporation takes decision regarding the management of risks of the company. Committee decisions are taken at the meetings conducted once or twice a year.

The risk management committee of Raffles Education Corporation has conducted 2 meetings during the year 2013 to make decisions concerning the risks faced by the company. All the directors of the board attended it and the details of it were mentioned in the annual report. But during the year 2014, the risk management committee of REC conducted no such meetings. This does pose as a problem for the company since not reviewing the risks faced by the company in a meeting could prove to be fatal for its financial position. However, during the recent year of 2015, the risk management committee of REC conducted one meeting which was attended by 4 directors of the board.

REC with the help of internal controls limits and controls the risks of the company. The company also makes sure to review the effectiveness of internal control in order to know whether it is sufficient to manage all the risks. The board of the REC sets risk appetites. Risk appetite refers to the amount and nature of risks which the company should take so as to meet all its defined objectives. In other words, risk appetite mentions of those risks which forms part of the objectives of the company (Stulz, 1996).

After setting the risk appetites, the company establishes the risk strategies to manage the risks which the company has chosen to face as part of its objectives. The risk strategies comprises of various methods and techniques which would measure the impact of risks faced by the company which will help in reducing the negative influence it causes on the financial position of REC. Along with the strategies, the company also assesses and manages the risks of the company by establishing a framework. This provides the company a power of control over its risk and restricts the losses that are to be otherwise faced by REC (Froot, 2007).

3.3 Independency with strategic planning – SWOT

Strength

The non-current assets of the organization are in increasing trends it seems the funds are invested in long range in nature. The institution is operating at different countries this will enable their students to interact with students of various countries if they have students exchange program .institution is giving essential skills, creative, innovative , practical knowledge relevant to various industries this will attract the students from various parts of the nation. The revenue of the organization is in decreasing trend this seems that it is working for the charitable cause (Yahoo India Finance, 2016).

Weakness

Weakness of REC is many, especially considering the factors stated in the financial statements. The financial position of the company is weak. The shareholder fund is increasing at less than 0 .05% but the noncurrent assets increasing more than 19% it is mainly sourced from current liabilities. This is the very big weakness because current liabilities fetch higher interest and so it is suggested that long term assets not to be financed through short term funding.to overcome the funding problem the intuition my get sponsorships from alumni who are benefited from institution. It does not focus on increasing the shareholder value this we can ensure from decrease in EPS on resent years. Curriculum stretched for additional activity this will give less focus on core activity (Yahoo India Finance, 2016).

Opportunity

Establishing the organization across the globe seems like a valuable opportunity for the REC. The institution is operating at various countries in the world and having good track records this will attract students of their region because they feel that they are provided with quality education with international standard this we can ensure through resent enrollment of students. The different levels of management peoples are having experience and expertise in curriculum and administrative skills this will enable them to take instant planning. Students in the countries where the institution is operating have enough potential to learn and bought good name to the institution

Threat

Raffles Education Corporation is facing threats the level of which is less when compared with other organization of the same field. The students are not charged any high fee because it is operating in backward areas of respective countries so the public funding is low there where a growing completion in and around the institution is operating. Generally local intuitions play leading role in the respective countries. Losing prominent faculty because they have better opportunities at other intuitions while operating locally.

3.4 Independency with corporate governance 

With the world adapting to changes more quickly than ever before, the height of competition is at its peak in almost every field. Especially, the fields such as education, communication and technologies demands more awareness from the management since the lack of it could draw back the growth of company. It would make it impossible for the company to survive in the market. This is called competitive risk. It is important to analyse such risk to know where REC stands in the competitive market. The assessment would help the company in doing what is necessary to survive and grow in the market. Raffles Education Corporation as one of the leading companies in the field of educational institution has many competitors. The few top most companies on the list of competitors are taken here for comparative purposes. Based on comparison, the report will be able to ascertain the current position of REC and will also be evaluate the growth of the competitive companies in the market (Huther and Shah, 1998).

The top most competitors of Raffles Education Corporation are Overseas Education Ltd, Informatics Education Ltd and TMC Education Corp Ltd. The list of competitors was made based on their Governance and Transparency Index.

The Governance and Transparency index (GTI) of the companies acts a valuable factor in comparing the current position and growth of the companies. The GTI is considered mostly by the public to view a company’s relationship with its customers, the society as whole and the environment. The GTI score of Raffles Education Corporation for the past two years of 2014 and 2015 are 48 and 54. This means that the company has increased its score by 6 between the years 2014 and 2015. As a result of the increase in score index, the GTI rank of REC moved from 178th to 184th (Raffles-education-corporation.com, 2016). The GTI of the competitors are as follows,

Company name

GTI Score 2014

GTI score 2015

GTI Rank 2014

GTI Rank 2015

Raffles Education Corporation

48

54

178

184

Overseas Education Ltd

-

52

-

212

Informatics Education Ltd

30

41

492

401

TMC Education Corp Ltd

43

40

247

419

From the above table, it is clear that the competitors of REC in terms of GTI are of no severe threats to the company. The closest rank to that of REC is obtained by Overseas Education Ltd. Overseas has earned a rank of 212 which is only 28 far than that of REC. The score difference between these two companies is 2, yet because of some faults and bonuses made by these companies the difference between the ranks of the companies is larger. Raffles Education Corporation has earned 5 bonuses over the years. Despite that the company has fallen back in its rank.

Other competitive companies have also made a difference in their ranks. The TMC education corporation Ltd has fallen in its rank from 247 in 2014 to 419 in 2015. The competitive company which has made the highest progress is Informatics Education Ltd. It has moved from 492 to 401 between the years 2014 and 2015. There is no severe competitive risk faced by Raffles Education. Yet, it is advised that Raffles Education Corporation should concentrate more on earning bonuses and on increasing the ranks of the company. This is because it is evident that the competitors of the company respond more than what was actually estimated (Raffles-education-corporation.com, 2016).

3.5 Responsibility & accountability

The risk management committee is responsible for the decisions taken for avoiding and managing the risks. The risk management committee is made up of 4 directors from the board of Raffles Education Corporation. However, the rest of the directors must also attend the meeting while making the important decisions. Hence, all the directors of the board will be accountable for a decision that goes wrong. In other words if a decision taken by the committee fails to avoid or control a risk and it causes loss, the management will be held accountable (Liebenberg and Hoyt, 2003).

4. Risk Management Process

4.1 Risk Management Communication

As mentioned earlier, the risk management of Raffles Education Corporation is under the control of the board of directors. The risk committee formed under the risk management comprises of 4 directors from the board of REC. For the management to be effective in controlling, avoiding and managing the risks, it is necessary to have effective, uninterrupted and reliable communication. Communication in general refers to exchanging of informations between people, organizations, companies and other personals through mediums like speaking or writing and such. The design of a communication strategy involves various stages: The methodology of communication is almost similar for both types of stakeholders but with few changes (Thompson, 2002).

risk management communication

4.1.1. Internal Stakeholders

The corporate governance statement of Raffles Education Corporation states the enhancement of shareholder’s value. This includes the internal stakeholders as well. The internal stakeholders refer to those investors who are working for the betterment of the company such as the staffs, managers, directors and other employees. The shares that are to be issued later are first issued to the stakeholders. This shows the trust the company has over its employees and it earns them good faith. Internal shareholders stand in contrast to the external stakeholders. But as a rule, no special information is shared between them which has not already been or were to be shared with the external shareholders (Spira and Page, 2003).

The first stage, in general, is the focus, deciding the way, the issue was addressed and the conceptual framework required, and the social groups that get involved, the target audience, etc. should be decided.

The second step involves the decision regarding the purpose and objectives those represents the essence of the campaign; These are the objectives the REC wants to achieve with the risk management.

The third step is decisions regarding target population of stakeholders. Therefore it allows the firm to define the content and select channels and means to be used.

The fourth step involves the decision regarding the Content. Those may be the topics of greatest interest to the internal stakeholders.

The fifth step is deciding the communication channels, it might be the print and electronic media communication or through internal memos, Internal message boards

The sixth and the final step involve the decision regarding the Evaluation Mechanisms. Was it received the message has been changed perception and behavior of the target group? The methodology suitable would be the polls, surveys, workshops participatory evaluation.

4.1.2 External Stakeholders

External stakeholders are the normal stakeholders who deal with the shares of the company but are not in any way directly connected with the company. For example, those shareholders who bought the shares of the company can be called as external stakeholders. They are different from the internal stakeholders. Mostly they get the information which is already known to the internal stakeholders. Other than by dividend which is paid for the shares held by them, they are not in any other way get paid from the company through means such as salaries or others (Freeman, 2010).

The first stage in risk management communication for external stakeholders is also the focus of the message. As mentioned above deciding the way, the issue needs to be addressed and determining the conceptual framework required, and the social groups that get involved, the target audience, etc. should be determined.

The second step involves the decision regarding the purpose and objectives those represents the essence of the campaign. These are the objectives the REC wants to achieve with the risk management.

The third step is decisions regarding the public or target population. Therefore it allows the firm to define the content and select channels and means to be used.

The fourth step involves the decision regarding the Content. Those may be the topics of greatest interest to the stakeholders. The recommendations issued have to agree with the real possibilities of the stakeholder population.

The fifth step is deciding the communication channels; it might be the print and electronic media communication, radio (educational spots, soap operas), television (educational spots, soap operas, documentary), internet (web conferences, etc.), alternative channels, etc.

The sixth and the final step involve the decision regarding the Evaluation Mechanisms. Was it received the message has been changed perception and behavior of the target group? The methodology suitable would be the polls, surveys, workshops participatory evaluation.

4.2 Risk Management framework

This framework is updated and adapted to the situation affecting the firm. The updates and adaptation are derived from both experienced changes in their operations as modifications to the existing structure. It is revised once a year to validate its validity by the Board of Directors and amended if deemed necessary (Miller, 1992).

Among the responsibilities of the Committee of Integrated Risk Management listed in the Code Corporate Governance of the organizations is to oversee and ensure the existence, updating and dissemination of this Framework for Integrated Risk Management.

The Risk management framework of REC involves six steps. They are Categorize, Select, Implement, Assess, Authorize and Monitor.

Categorize: As a firm, it is apparently exposed to currency risk, therefore let’s consider how the RMF is developed by the REC. The first step is categorizing. This kind of risk can affect the profitability of the firm. Therefore, it can be categorized as currency risk.

Select: The process of risk management requires analysis and control of all risks and making decisions aimed at modifying the limits if they are not in line with the philosophy of risk. The currency risk involves baseline security controls among the categorization. Because the profit and loss might have a direct impact on the firm’s balance sheet.

Implement: The firm implements a strategy on their high-risk zones, their internal headcount will likely to be more pertinent to the report, and it will benefit the most from a risk assessment exercise.

Assess: Effective risk management requires computer technology constantly evolving and qualified personnel in continuous training for the purpose of recording, capture, processing risk and information generation. The firm implements Knowledge management systems for the process of assessing the data

Authorize: The information systems of the firm is based on the risk factors that involved with the organisational operations and assets, HR and other companies. It is most likely resulting from the functioning of the information system and the decision that this risk is acceptable.

Monitor: The firm monitors and ensures the existence, updating and dissemination of the Risk Management Framework. The firm also monitors the evolution of risk metrics and defined limits and possible causes of deviations and the need to implement contingency plans.

4.3 Risk assessment technique

To do an assessment of the economic and financial situation of our organisation, it is done under various possible ways. Here are some of the techniques to use it plausible future scenarios to identify through correlation or risk concentration, vulnerability to possible events or changes in the conditions of the firm (Zsidisin et al., 2004).

4.3.1 Method 1 in identifying risks- Economic Capital Adequacy

The Economic Capital is the amount required to cover unexpected losses arising from exposures to risks that must face by the firm. The estimated according to profile of risk assumed, the operating environment and the adequacy of the process of Integral Management Risk defined by the Board of Directors, taking into account factors External as the effects of the cycle and economic situation (Burns, 2004)

4.3.2 Method 2 in determining risks -Strategic Risk Management

Strategic Risk Management Managing this risk is transverse to the decision-making process, involving the Board of Directors, the Committee of Integrated Risk Management and different managements of the entity running and monitor compliance with these decisions reflected in the Business Plan. The process to mitigate this risk is based on the scheme that an organization possesses powers for decision-making and in all cases, it comes to safeguard the solvency and integrity He is facing business. All decisions in this regard are within the risk appetite defined and established by the Company and therefore are within the risk tolerance to take for sustainable business development thereof (Rawls and Smithson, 1990).

4.3.3 Method 3 in identifying risks- Comprehensive Stress Tests

Comprehensive Stress Tests are part of the corporate governance policy and management risk defined by the Board of Directors, as part of an integrated approach, according to the complexity and nature of operations, estimating the effects of adverse outcomes unforeseen caused by various risks and report the necessary capital to absorb lost in the event of major alterations, that will strengthen the resilience and decision-making by the governing bodies. To do an assessment of the economic and financial situation of our organization it is done under various severe but plausible future scenarios to identify through correlation or risk concentration, vulnerability to possible events or changes in the conditions (Kirkpatrick, 2009)

4.3.4 Method 1 in assessing -Risk Matrix

It is a documentary survey tool developed by the Risk Unit Operational in collaboration with related areas, in which all risks are recorded reputational identified in different areas of the firm.

In the same detailed for each risk the linked area, stakeholders affected, description of risk, assessing the level of risk, detail of mitigating risk (Enough, partial, or nonexistent), the evaluation of the adequacy of mitigating, and correspondence of the action plan. The assessment of the level of risk resulting from mitigation is estimated based on the level of risk and the adequacy of its mitigating; if the result is Medium, Mayor or not acceptable It requires a plan of action (Garvey and Lansdowne, 1998)

4.3.5 Method 2 in assessing -Strategic Planning and Management Control

Strategic planning of Raffles Education Corporation can be recognized from the annual reports of the company. The company does not make plans at regular intervals. Hence it is at times tough for the company to proceed with a way to manage a risk. Strategic Planning and Management Control at the request of the Committee Integrated Risk Management and the Board of Directors, coordinate implementation, monitoring and implementation of the contingency plan, which in certain situations is extraordinary. But it needs to be activated (Pearce et al., 1997).

4.3.6 Method 3 in assessing – Risk Resolution

A resolution can be taken against risk by the company as a means of managing it. Information generated by the risk assessment methods, a suitable approach to solving the risks can be taken. It is therefore of great importance to a project, that the risk assessment is done. It is a process by which risks can be drastic either diverted or controlled, and in the cases experienced even expected. Risk identification, assessment and resolution when set up to formulate a risk management plan and programmed for a project (Rubinstein, 1988).

4.4. Risk Register

Various risks that is likely to be faced by the organizations. Some of the risks placed here have already been mentioned in the previous assignment (Willams, 1994). 

Risk

Function

Description

Operational Risk

IT

Virus/malware attack or data centre shutdown resulting in loss of confidential student data/financial records/network accessibility/operation system

Operational Risk

IT

Inadequate knowledge of IT staff to solve system issues without escalating to vendor resulting in loss of time

Operational Risk

IT

Inadequate PCs for student access resulting in delayed access to curriculum

Risk

Function

Description

Strategic Risk

HR

Loss of key personnel leading to negative impact on business standards & performance

Operational Risk

HR

Potential poor project performance due to inadequate skill levels resulting in delays and financial impact

Operational Risk

HR

Failure to develop existing and new clients due to inadequate marketing resulting in possible shortfall in budget

Risk

Function

Description

Strategic Risk

Finance

Inadequate insurance leading to potential loss adjustment and financial loss

Strategic Risk

F Finance

Regulation change/revamp resulting loss/suspension of Private Education License

Strategic Risk

Finance

Fraud or theft resulting in financial loss

Risk

Function

Description

Operational Risk

Operations

Poor contractor performance resulting in a reduction in project quality and financial impact

Operational Risk

Operations

Schedule delays due to poor quality control leading to possible contract disputes

Strategic Risk

Operations

Fire leading to business interruption

Risk

Function

Description

Strategic Risk

HR

Insiders (employees) are not the owners (shareholder) and hence they do not have the best interests of the risks and communities.

Strategic Risk

HR

General risk that REC will lose out to competitors

Strategic Risk

HR

Risks related to intellectual property (such as the risk of leakage of intellectual property rights to the parallel annotation).

Strategic Risk

HR

Then your overall business strategy and risk maps will be invalid (for example, will not achieve the revenue target).

Strategic Risk

HR

The risk of damage to the corporate image of the organizations Reputation risk can be reduced business confidence and lead to value destruction.

Risk

Function

Description

Strategic Risk

Finance

The risk of exchange rate changes barge your favor. For example, if your cost is $ target on your back mainly yen - you want a strong yen. This happens with international students

Strategic Risk

F Finance

In the key input prices rising risk (for example, for the transport sector energy)

Strategic Risk

Finance

The risk of changes in value of investments (such as G. equity and commodity market risk) in.

Strategic Risk

Finance

Risk pulls the entire global financial system, or a country's financial system would collapse.

Strategic Risk

Finance

The risk that REC will be in violation of the fiduciary duty of information and communication technologies (such as insider dealing)

Risk

Function

Description

Market Risk

Operations

Demand Declining than expected for educational service. Educational service is offered widely and the demand of it will be low.

Market Risk

Operations

Revenue will reduce the risk of competitive advantage (such as a price war).

Market Risk

Operations

The risk of new syllabus will fail in the marketplace. The introduction of new courses may not always be a success

Market Risk

Operations

This will be the risk of inaccurate forecasts. In other words, not adapting to the changes.

Risk

Function

Description

Operational Risk

IT

The quality of information gathered by the IT may not be accurate. Hence it causes a risk of making a wrong decision

Operational Risk

IT

Risk of losing data. A backup not created or a backup loss could endanger the gathered data.

Operational Risk

IT

Risk of theft. Since many of the data are in soft copy, it is easy for the hackers to hack into it with the absence of proper security

Operational Risk

IT

Secondary sources are not always reliable. Hence it also causes a risk.

4.5 Risk profile

Every organization has its own risk profile. This is used to determine the starting point for the organization of the biggest health and safety issues. Risk in some enterprises will be tangible and immediate security risk, while the risk of other organizations may be health-related; it may be a long time before the disease becomes apparent.

Risk profile check:

The nature and level of threat faced by an organization

The possibility of adverse effects occurring

The level of disruption and cost and risk associated with each type of

The effectiveness of controls to manage those risks

 The Board of Directors with the support of the different management responsible for risk and collaboration and advice of the Committee for Comprehensive Risk Management defines the profile and tolerance level to each of the risks to which it is exposed, which is reflected in policies, procedures and within the limits set for each of them, in turn establishing control standards and reports indicate the excess same. It is also responsible for approving exceptions to policies and limits involving a significant detour. The roles and responsibilities of the various agencies involved in Integrated Risk and in determining capital adequacy risk are referred to in this Framework. This framework also determines the policies, procedures and methodologies that govern the determination of capital adequacy according to the profile of our organization (Kleffner et al., 2003)

4.6 Risk Appetite and risk tolerance (ALARP)

Risk appetite can be defined as the risks an organization is willing to take in order to meet the type of its number of strategic objectives and risks. Organization will have different risk preferences according to their sector, culture and objectives. Scope desire different risks, which may change over time change. Risk appetite and tolerance require a high agenda of any board, is the risk management methods a company's core business to consider. IRM guidance provides practical guidance, advice and information to support discussions of the Board (Clarke and Varma, 1999).

Risk appetite and risk limits Risk appetite is an expression of the organization’s preference for risk, i.e., the level of risk that the organization wants to take in their quest for profitability that allows you meet its strategic objectives. It expresses its business objectives and structure balance, their preferences for each type of risk, the acceptable balance between risk and profitability, acceptable volatility, its capital thresholds, tolerance to loss and optimum liquidity ratios, among others. Risk appetite compared to the risk profile, which is the risk position of the REC at one point considering all relevant risks, and risk tolerance, which it is the maximum level of risk that an entity may take to conduct its business. This last it is determined by the objective of the entity to maintain a risk rating determined, and therefore is linked to its capitalization to meet stressful situations.

5. Risk Management Programme

5.1 Risk management implementation plan

Risk identification is a crucial part of the risk management. The counter measures referred to in risk management plan is based on the estimation of the risk which is identified. If a management became ineffective in identifying the risks faced by it, the measures that are to be taken for reducing the impact of the risks became less effective as well. It is because, just as there are a number of risks, there are also various measures and strategies which would only be effective when individually chosen for a particular type of risk. A risk can be identified depending on the course the business is predicted to travel. The wide range of probabilities may have to be analysed in order to account for all the risks.

Risk analysis / identification of the intended uses identification of possible application errors, identification of security-related features and identification of known and foreseeable hazards.

When planning a specific action on the risks, the team should consider the following six possible approaches:

Research (research). Do we know enough about this particular risk? Are we better examining it to get more information about it and to determine its characteristics, before we take any action?

Adoption (accept). Can we survive the risk of the consequences if they do come? Can we take the risk and not take on the matter no further action?

Avoidance (avoid). Can we avoid the risk by changing the mode of action?

Transfer (transfer). Can we transfer the risk to another project, the project team, organization or individual?

Prevention (mitigation) Can I do something in advance to reduce the probability of risk or threat?

Mitigation (Contingency). Can the risk be reduced threat by planning a response to it?

The best solution is to implement their adoption possibilities offered by them, as there are simply no effective preventive or remedial measures. Adoption is not an omission. Risk Management Plan should include the rationale for why the project team chose risk-taking rather than develop measures for its prevention and mitigation.

Many of the risks associated with the uncertainties generated by incomplete information. They can be effectively resolved after further research related to the subject area of them. For example, the team may decide to conduct market research to learn more about existing users of basic skills and their desire to use the new technology. In the case of the decision to research the risk management plan should include a description of these studies, including the formulation of testable hypotheses and study issues. Perhaps identified risk can be resolved well some changes in the project, excluding the existence of a risk. In this case, the risk management plan shall include a justification change, and it must also be reflected in terms of the project itself. In addition, it should be initiated activities necessary to implement the changes adopted in life.

5.2 Monitor and review

Planning to mitigate the risk of the effects of the measures is to create a backup plan in case the preventive measures to prevent the negative effects will not reach the goal. Such plans are required for all risks, including those for which plans are designed to prevent. They include actions in case of realization of the risk and the need to minimize the impact effects. To be effective, these plans should be developed in advance.

The project team should develop management plans for each of the major risks, including action to prevent and mitigate the effects of triggers and a detailed description of all the necessary steps. The information that the design team may consider documenting the planned actions includes the following:

Risk Identifier: The unique name of the risk (monitoring and reporting)

The formulation of risk: Description of risk in natural language, including leading to loss of condition and do these losses (the consequences) that will arise if the risk becomes a problem

Risk prevention strategy: One or two paragraphs of text describing the strategy of the project team to prevent this risk, including any assumptions made

Planned action: The list of activities that the project team is to carry out for the implementation of risk management strategies including the mandatory completion date of these activities and information on personal responsibility for them

Mitigation strategy: A paragraph or two describing the team strategy if risk management measures have not had the desired effect. This strategy will be implemented after the trigger mitigation plan.

Triggers contingency plans (mitigation). The criteria used by the project team to determine the conditions for the start of the mitigation plan.

Responsibility: Role Cluster and individuals responsible for implementing the planned actions

Furthermore, it should be made scheduling (scheduling) risks related to operations. In the end, smiling in activities related to the risk, it should be included in the schedule of the project.

5.3 Performance Measurement

Success in business depends on the use of resources and to take aim, continues to make progress and improve. Therefore, managers and leaders at all levels of stakeholders are becoming more and more the responsibility of the key results of the most competent and diligent manner delivery. Frameworks such as ISO 31000: 2009 provides design, implementation general guide, and the entire organization to maintain risk management process, but the disorder is, they did not tell us the performance scorecard how to produce or establish key performance indicators (KPI) which is looking for indispensable small tools to create, measure and achieve enterprise-wide best performances.

6. Conclusion

The report that has been made does not cover for the new risks which will arise in the future. Despite all the preparations made by and suggested to the Raffles Education Corporation, the inevitability of new risks arising at frequent intervals must be accepted. The change in the amount of fees collected from the students is expected to occur in the near future. As a reaction to this, a new law that limits or restricts a certain collection of fees or changes in the syllabus offered is also expected to be established in the future period. Other than those unexpected turn of events like the ones mentioned here, Raffles Education Corporation is capable of managing any other risks, it they were to follow the given suggestions.

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