Exploring the Mechanisms for Implementing a Risk Management Process: Overall Approach and Practical Example |
UDC: 005.52:005.334]:004.032.26 ; 005.521 DOI: 10.7595/management.fon.2012.0023
The aim of this paper is to explore the mechanisms for implementing a risk management process into an organisation. A way of exploring the mechanisms for implementing a risk management process is to break it down into its component parts and examine what each part should contribute to the overall risk management process. The main aim of the empirical part of the paper is on the other hand to present empirical research of risk management focusing on forecasting sales using a neural network method. A neural network is a powerful data modeling tool that is able to capture and represent complex input/output relationships. Integrating an overall risk management process into an organisation can significantly improve the response of the organisation to unplanned events (good or bad) and enhances its ability to compete, not to mention that the objectives of an organisation are easier to achieve and that resources are effectively allocated. Applying neural network method produces consistently accurate sales forecast. However, effort should be put in proper preparation of dataset. This paper has a tremendous added value for all risk management officers, CFOs and all others involved in risk management process. The added value is shown in the description of theoretical risk management model which is upgraded with a practical approach example. Keywords: enterprise risk management, strategical risk management, operational risk management, risk management process, organisation, neural network, forecasting
Laura Juznik Rotar1, Mitja Kozar2 1Higher School of Business and Management Novo mesto 2Gorenje d.d.
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