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Published by , 2018-06-12 13:13:41

FULL E-MAGAZINE

FULL E-MAGAZINE

BUSINESS Impact of risk management
MAGAZINE practice on the development of

business

VOLUME 1: JUNE 2018 Business-driven management
13 JUNE 2018 of infrastructure-level in cloud

providers

Business strategic, enterprise

risk management and
organizational performance

Model of risk management in
organization

“There are no secrets to “A business that make “If you're trying to create a
success. It is the result of nothing but money is a company, it's like baking a
preparation, hard work, and cake. You have to have all
poor business” the ingredients in the right
learning from failure” Henry Ford
Colin Powell proportion”
Elon Musk

First of all, By the Name of Allah, we feel so grateful of His blessing, we finally
success to concoct this group assignment for subject Management of Business Records
which is the code IMR652.

We would like to express the deepest appreciation to all those who provide us the
possibility to complete these e-magazine. A special gratitude we give to our lecturer Dr.
Mohd Shamsul Mohd Shoid, whose contribution in stimulating suggestions and
encouragement, helped us to coordinate our e-magazine.

Furthermore, we would also like to acknowledge with much appreciation to our
colleague for their guideline and advice as well as for providing necessary information
regarding these e-magazine and also for their support in completing these e-magazine.
We would like to extend a sincere thanks to all of them.

Impact of risk management 1-5
practice on the development of 9-12
16-21
business 25-28

Business-driven management
of infrastructure-level in cloud

providers

Business strategic, enterprise

risk management and
organizational performance

Model of risk management in
organization

Page 1

BUSINESS MAGAZINE
VOL 1: JUNE 2018

IMPACT OF RISK MANAGEMENT
PRACTICE ON THE

DEVELOPMENT OF BUSINESSES

BY: MARSYA MIZANI ZAHARUDIN

Weather we realize or not, there are difference meaning from different people, and
the true understanding on what is business might
risk in our daily activity. When conducting a be various. According to Brown and Petrello,
business, of course there is a lot of risk that they define business as an institution which
came with it and one of the risks is the risk of produces goods and services demanded by
management. Before starting with risk people. This means that all of the goods and
management, let’s begin with what is the services are needed by our society itself. When
definition of business. Business can have dealing with business, of course we will face
with ricks factor, and there are a lot of risk that

can suffered by the businesses. One of the risks Page 2
of business is the risk of management. What is
actually risk management? According to and especially to trade itself out of poverty and
business dictionary websites, risk management declining investments, African businesses will
defines as the identification, analysis, have to re-evaluate their business models to
assessment, control, and avoidance, embed risk management, innovation and
minimization, or elimination of unacceptable constant challenge to existing models against the
risks. The organization might use risk of practicalities of modern day business
assumption, avoidance, retention, transfer and environment.
other strategy as the proper management of the
future events. When there is a lot of growth of business, to
be able to reach the market also will become the
By conducting a business, as an owner or problem to the problem towards the businesses.
the shareholders, they must accept the risk of The market reach is the important part when
management that they will face sooner or later in conducting a business. This is because if the risk
their business. By conducting the process of risk management is occurring in the business, it will
management sooner, it will definitely help the become easier for the businesses to reach the
business face the risks that they may currently market on their own. The risk management will
face. have the impact towards the business growth and
also the market reach.
1. GROWTH OF BUSINESS AND
MARKET REACH 2. RISK PROFILE AND MARKET
VOLATILITY
In today worlds, the business are growing a
lot faster than we expected it will be. Every
individual will be looking at the opportunity
provided in front of their eyes to conduct a
business in many ways they can. The business
that already success and well establish might be
suffered due to the growth of business.

One of the examples is found on the article
that discussing about the growth of business in
Africa. According to Doguwa, 1996, in order to
compete and succeed in the new business world

According to business dictionary websites, Page 3
risk profile defines as the threats to which a
company or organization are exposed. When The owner or shareholders need to be smart
conducting a business, there is number of risks, in handling the risk management. The risk is
types of risk and the potential effect of risks usually occurs to every business company or
towards the business. Risk profile will allow the organization, but the handling process might be
business to discuss about the costs or disruptions different from others. The risk management need
that may happen. When know the profile risk of to be conducted by following the right process,
the business itself, it help the businesses with the to ensuring all of the steps is follow accurately
willingness to take risks and to use the risks as and running smoothly.
an operational strategy.
3. INTEGRATING RISK
The business might face several of challenge MANAGEMENT WITH BUSINESS
as long the business is actually in operation. The
business environment is very volatile with STRATEGY
abrupt changes in the prices of goods and
services (Mitroff, 1988, Colquitt, et al., 1999). When talking about the growth of the
When there are difficulties that occur in the businesses in today’s world, many owner or
business, of course it will leave the impact of even the shareholders are realizing the actual
risk management. There are several factors that important of risk management toward their
might lead the business to the risk. These business. There are several of businesses are
difficulties are usually presented by lack of begin with incorporating the risk of management
recognition of these risks and the limited scope strategies in the decision making process of the
of their assessment (Doguwa, 1996). business.

By integrating the risk management with the
business strategy, there are going to be changes
that happen towards the businesses. All of the
personnel and traditional business face the
changes that occur in the business.

When begin the business with conducting
the risk management it will bring a lot of
benefits towards the businesses. But there is
going to be problem later in the business when
the owner of shareholders thus not taking the
risk of management seriously. Operational risk,

reputation risk, liquidity risks and market risk Page 4
are some of the areas of risk which have been MANAGEMENT PLAN FOR BUSINESS
neglected by businesses (Power, 2005). i. Identify potential risks to your

The business owner and shareholders need business.
to take care of the problem before it’s too late to ii. Assessing your business
fix on the business itself. By neglecting the iii. Ways of identifying risk
risks, it will leave the impact of not conducting iv. Brainstorm
the right of risks management to the business. v. Analyze other events
There are flows that can be used in the process vi. Assess your processes
of preparing risk management plan for the vii. Consider the worst case scenario
business.

STEPS IN PREPARING A RISK REFERENCE

Edna Stan‐Maduka, (2010) "The impact of risk
management practice on the development of
African businesses", World Journal of
Entrepreneurship, Management and Sustainable
Development, Vol. 6 Issue: 3, pp.213-219

Employment, S. B. (2018, April 20). Identify
risks to your business. Retrieved from

https://www.business.qld.gov.au/running- Page 5
business/protecting-business/risk-
management/preparing-plan/identify Definition Risk Profile,(n.d.). Retrieved June 11,
2018, from
Definition Risk Management,(n.d.). Retrieved http://www.businessdictionary.com/definition/ri
June 11, 2018, from sk-profile.html
http://www.businessdictionary.com/definition/ri
sk-management.html Definition-of-business, (2014, December 06).
Retrieved June 11, 2018, from
https://tectrick.org/definition-of-business/

Page 6

Page 7

Page 8

Business-driven management PAGE 9
of infrastructure-level risks in
Cloud providers

INSIDE THIS SITE GETTING STARTED
1. Introduction
2. Types of risk cloud a) What is Cloud Computing?

computing? Defines as an innovation and promising paradigm that is leading to
3. Steps of BLO –driven cloud remarkable changes in the way in which hardware and software are
designed and purchased, as well as how IT systems are managed.
risk management However, the Cloud is a risky paradigm to business management also.
4. Improving BLOs Cloud (2012, J. Oriol Fito & Jordi Guitart)(2011, Gartner Report)

providers b) What is Business- Risk Management?

Author: Martina Vincent Defines as the process whereby organizations treat, in a methodical
Faculty of Information way, risks related to their business activities. The main goal is to obtain
Management, UITM Puncak benefits and sustainable values for the business in each of its activities
and across all of them. (ISO 31000:2009)
Perdana
c) Cloud Computing & Risk Management

New risks appeared together with the evolution of the cloud computing
paradigms. So, there have a solution or system whereby organizations
want to manage the risk using Cloud providers. Generally organization
use BLO – driven cloud risk management.

So, in this section there will be explanation about:

1. What are types of risk cloud computing?

2. Step of BLO – driven cloud risk management

3. Improving BLOs Cloud providers

BUSINESS MAGAZINE PAGE 10
VOL 1: JUNE 2018

“People who succeed CLOUD RELATED RISK
have momentum. The
more they succeed, the Cloud related risk can be a numerous factor that can
affect business organization such as:
more they want to
succeed, and the more 1. Risk associated with
virtualization technology – failure
they find a way to
succeed. Similarly, in multi - tenancy
when someone is
failing, the tendency is 2. Risk associated with data such
to get on a downward data protection responsibility –
spiral that can even
become a self-fulfilling decreased the reliability

prophecy." BLO – Driven Cloud Risk
Management
Tony Robbins
By using the method of BLOs – Driven
Cloud Risk there has a few steps should
be taken in order to achieve the goals of
organization.

The few steps are divided into:
a) Risk Identification
b) Risk Analysis
c) Risk Evaluation
d) Risk Treatment
e) Risk Monitoring
f) Risk Reporting

BUSINESS MAGAZINE PAGE 11
VOL 1: JUNE 2018

(a) Risk Identification
First step to define an organization’s potential events, uncertainties and risks. It
is perhaps the most difficult aspect of managing risks, because more events will
happen in the future. This stage describes them in a structured format, by using

table in order to guarantee a comprehensive risk assessment method.

(b) Risk Analysis
Second step is aimed at figuring out the events’ likelihood of occurrence and the

magnitude of their consequences, i.e. the estimated impact on BLOs. (ISO/IEC
27005). ISO/IEC 27005 has become widely acceptance guide for information

security business risk management.

(c) Risk Evaluation
Third step, compares the estimated risk levels against a risk acceptance
criterion, which is a threshold established by business executives. This step
results in the determination of whether each risk should be treated or not.

(d) Risk Treatment: retainment, mitigation, or adoption
This is a crucial step when managing risks, since the future impact of any event
may vastly depend on the risk treatment strategies selected. There divide also

into a (i) negative risks whereby avoiding the risk, (ii) positive risk whereby
exploit the risk and (iii) negligible risk whereby retain the business risk of

cloud computing.

(e) Risk Monitoring
This step reviews and evaluates the effects of any risk treatment strategies
being applied. This step ensures that appropriate risk treatment strategies are
being carried out in cases of (1) existing risks changing and (2) new ones
emerging as a consequence of applying a particular risk treatment response or

strategy.

(f) Risk Reporting
The risk management approach has to report externally all the results obtained
from managing risks. Actually, these reports are provided to fulfill mandatory

requirements related to risk management.

BUSINESS MAGAZINE PAGE 12
VOL 1: JUNE 2018

IMPROVING BLOs CLOUD
PROVIDER

Finally, in order to improving the BLOs Cloud provider to
organization, they need to incorporated the risk of

management approach in a PaaS provider in order to
improve the achievement of most typical BLOs. For

example, minimize of both profit and customer
satisfaction. Furthermore, in using SEBCRA method, the
urgent need to face already identified infrastructure-level
risk: under- and over- provisioning the private cloud, and

the risk of physical and virtual resources failures in
business.

In conclusion, organization need a cloud computing in
order to run their business that provided a huge storage
of their records placement, but the risks will be arise
from use cloud computing that generally from technology
issues. So, any organization that uses this cloud
computing provider needs to know how to manage the
risk. So, recommended method for organization is use
PaaS provider for cloud computing and also SEBCRA
method that support by Oriol Fito & Jordi Guitart, 2012.

References:
(a) ISO 31000:2009, Risk management- Principles and guidelines

http://www.iso.org/iso/iso_catalogue/catalogue_tc/catalogue_detail.htm?csnumber=43170
(b) J.Oriol, Jordi Guitart, (2011) Business-driven management of infrastructure- level risks in Cloud providers,

Journal Homepage: www.elsevier.com/locate/fgcs
(c) J.O. Fitó, M. Macías, J. Guitart, Toward business-driven risk management

for cloud computing, in: Proceedings of the 6th International Conference
on Network and Service Management (CNSM 2010), Niagara Falls, Canada,
October 25–29, 2010, pp. 238–241
(d) ISO/IEC 27005:2008, Information technology - Security Techniques - Information
security risk managementhttp://www.iso.org/iso/iso_catalogue/
catalogue_tc/catalogue_detail.htm?csnumber=42107.







Business Magazine Volume 1

BUSINESS 1. About
STRATEGY, 2. Enterprise Risk
ENTERPRISE RISK
MANAGEMENT AND Management
ORGANIZATIONAL 3. Correlation between
PERFORMANCE ERM, Business Strategy

PREPARED BY and Organizational
SITI AISHAH BINTI HAMIM Performance
TAHARI (2015419518)
4. Look forward...
GENERAL RECORDS OFFICER 5. Reference and the

auhor

JUNE 2018

About

Risk management is an increasingly A SUCCESSFUL
important business driver and ENTERPRISE RISK
stakeholders have become much MANAGEMENT (ERM)
more concerned about risk. Risk INITIATIVE CAN
may be a driver of strategic AFFECT THE
decisions, it may be a cause of LIKELIHOOD AND
uncertainty in the organization or it CONSEQUENCES OF
may simply be embedded in the RISKS
activities of the organization. An MATERIALIZING.
enterprise-wide approach to risk
management enables an 17
organization to consider the
potential impact of all types of risks
on all processes, activities,
stakeholders, products and services.
Implementing a comprehensive
approach will result in an
organization benefiting from what is
often referred to as the ‘upside of
risk’.

A successful enterprise risk
management (ERM) initiative can
affect the likelihood and
consequences of risks materializing,
as well as deliver benefits related to
better informed strategic decisions,
successful delivery of change and
increased operational efficiency.
Other benefits include reduced cost
of capital, more accurate financial
reporting, competitive advantage,
improved perception of the
organization, better marketplace
presence and, in the case of public
service organizations, enhanced
political and community support.  

ENTERPRISE RISK MANAGEMENT

ENTERPRISE RISK MANAGEMENT

WHAT BENEFITS OF ERM TO ORGANIZATION ?

The dynamics of markets and business
environments present huge obstacles
for companies in charting the right
course for their continued success. One
fundamental concern of the
dynamism is risk management. 

However, silo-based perspective has
evolved where many organizations
currently view risk management from
a more holistic approach. This new
approach toward managing risk is
often referred to as enterprise risk
management (ERM). In ERM, all
possible risks are identified, and
appropriate risk responses
are chosen within the enterprise risk
appetite. 

The benefits of ERM have
helped organizations to:

reduce cost of capital;
lessen earnings volatility, which
results in enhanced shareholders’
value;
reduce stock price volatility,
which results in enhanced
shareholders’ value;
gain competitive advantage
through identifying those risks
that can be exploited;
enhance informed decision
making ability; and
build confidence for investors

18

JUNE 2018

CORRELATION BETWEEN ERM, BUSINESS
STRATEGY AND ORGANIZATIONAL
PERFORMANCE

HOW THEY IMPACT EACH OTHER ?

ERM HAS A VERY SIGNIFICANT ENTERPRISE RISK MANAGEMENT
POSITIVE IMPACT ON THE ERM was initiated to tackle the
shortcomings of traditional risk
PERFORMANCE OF MALAYSIAN management such as overlapping and
PUBLIC LISTED COMPANIES. excessive cost due to separately
investigating and insuring risk. One of
BUSINESS STRATEGY the internal factors that could
Business strategy is outlined to influence ERM adoption is business
achieve company’s objective based on strategy, as ERM design and
internal and external assessment. For implementation is very much
many companies, this focus on risk influenced by a firm’s strategy and
management was new, and they objectives. ERM focuses on achieving
argued that the right place to start is firms’ strategies and objectives.
to identify and manage the
company’s strategic risks; the risks 19
that have most impact on
organization’s ability to execute its
strategy and achieve its objectives.

ORGANIZATIONAL PERFORMANCE
(OP)
ERM can improved firm performance
in different industries. ERM also have
significant impact on organizational
performance. This impact can be both
direct and indirect through other
management programs and practices.
The contingency theory proposed that
OP is not the result of using ERM
but is dependent upon the match
between ERM and the contextual
factors.

JUNE 2018

LOOK FORWARD...

Companies with cost leadership business
strategy are more eager to implement ERM
compared to companies with differentiation
strategy. The study also indicate that ERM
implementation has a significant positive
impact on OP. Though ERM is a partial
mediator of the relationship between cost
leadership strategy and OP, it does not
mediate the relationship between
differentiation strategy and OP.

20

REFERENCES

the AUTHOR

SITI AISHAH BINTI HAMIM TAHARI

Bachelor in Information Science (Hons.)
Records Management

UiTM Puncak Perdana Campus, Selangor.

21

JUNE 2018

look forward to a

Brighter
Future

Berkshire University

Where ambition is formed
and goals are achieved.

WE'RE NOW ACCEPTING APPLICANTS
FOR THE FALL SEMESTER!

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Interested applicants should send their CV and cover letter to
[email protected] by August 18, 2019, 8PM.

of products and services and its competitive position
and in the market share.

Overview

WHAT IS RISK MANAGEMENT? RISK MANAGEMENT MODELS.
Five Stages of Risk Management Enterprise Risk Management (ERM).
Consequence of Risk Management to the Standard in Field of Risk Management

Organization.

As we know, in the nature of business all WHAT IS RISK MANAGEMENT?

organisation of course they are faced on risk According to Michalski, 2004, risk management is a
management in handling their business. All modern activities which an entity needs to undertake in order
organisations operate in the conditions of risk. The to allow only the amount of risk acceptable for the
risk arises in the out environment and factors of business operations which it conducts.
internal in a business entity.
According to Monkiewicz, 2000, risk management
The environment generates threats directly also is a process of bringing a risk under control and
connected with the financial and economic sphere of included the activities connected with risk analysis,
an organisation while the threats inside in elimination, reduction and management in a given
organisation are conducting operations within the case.
field of accountancy, cash flows, maintaining financial
liquidity, IT systems, recruitment and employees, the The other hand, risk management also is process
entity’s assets, technologies products and services, identifying possible risks, problem or disasters
also the research and development. before they are happen.
In the management of organisation strategic, it is This allows business owners to set up procedures to
very important is necessary to take decisions on the avoids the risk and minimize its impact. So the
elements of the internal and external structure organization should make a realistic evaluation of
endangering which can harm the entity’s future true level of risk and plan accordingly to manage the
position which can affect its economic results, quality risk effectively.

25

An effective management in an organisation can The basic stages of this process which are repeated
reduce the risk of management because it can help to in a number of models are:
understand and assess threatening risk. So that, by
applying this process in the organisation the a. Risk definition,
undertaking operations will increase the probability b. Its analysis and assessment,
of success and decrease the possibility of failure. c. Risk manipulation, observation and control.

There are five stages of risk management The above-mentioned process not only refers to the
according to Karlikowska, 2001 : entity’s business operations but it covers a whole unit
of management especially on strategic character
FIGURE 1: STAGES OF RISK MANAGEMENT which refer to decisions taken by an organisation.

Stage I: Consequence of Risk Management to the
Identifying and analysis of ensuing losses; Organization can:
Stage II:
Defining alternative methods of risk management; Determine the catalogue of threats and
Stage III: opportunities the entity of business
Selection of the optimum method of risk operations at the the present and future
management; from resulting analysis of peculiarity.
Stage IV:
Application of the selected method; Design activities and procedures making it
Stage V: Monitoring results. possible to prepare an organisation to
undertake the identified risks.
According to Williams, Smith, Young, 2002, there are
several practices of risk management are used Identify the appropriate emergency plans
simultaneously, such as the American model applied in which should be taken into consideration in
organisations which has a five-point system composed of the organisation’s strategy.
task definition, risk and uncertainty assessment, risk
control, risk financing and programme administration. Nowadays, to handle the risk management some
companies are use computer systems of which make
it possible to reduce probable costs, assess the risk
of new operations, increase a company’s
competitiveness and secure themselves against stock
exchange crises.
But, these solutions are still expensive and were
applied by a big companies normally state-owned or
private. For example, the software serving to manage
risk by SAS Institute which generally used in the
areas of business banks, financial institutions, power

26

industry, insurance associations and organization in order to minimize the effects of risk
telecommunication (Zarzadzanie ryzykiem, 2010),. on an organization's capital and earnings.

An organisation can achieve their fundamental Enterprise risk management expands the process to
objectives, company’s reputation and image, the include not just risks associated with accidental
security and financial stability maintenance, losses, but also fnancial, strategic, operational, and
protection of assets and operational activities with other risks.
have a support from IT technology in risk
management. FIGURE 2:
GENERAL OVERVIEW OF ENTERPRISE RISK
RISK MANAGEMENT MODELS
MANAGEMENT
Enterprise Risk Management (ERM). According to Berinato, 2005, the stages of ERM are
consistent with the risk management processes
Based on the IIA Norge, Guidelines for the Risk which are:
Management function describes the function for
Enterprise Risk Management (ERM). 1. Defining the risk also called brainstorming
stage. One of efficient and generally used
This kind of risk management is an element of research methods is surveying employees
corporate governance and, coupled with internal and defining it importance for the
controlling and audit, guarantees that the organisation.
organisation management’s or board’s attention is
focused on the most serious risks and protection of 2. Risk assessment by attributing them with an
the fundamental interests of the entity’s appropriate level of threats by categories of
shareholders. low, medium, high.

The aim of ERM is to maximise the value of a covered 3. Risk reduction by selection of minimising
entity. This aim also was supported by the book and reduction methods of the risks being
guidelines from IIA Norge which to maintain risk at an diagnosed
acceptable level and ensure the best balance possible
between threats and opportunities. 27

According to Allied Boston Consultants, he defined
that ERM is the process of planning, organizing,
leading, and controlling the activities of an

Standard that can applied in Field of Risk REFERENCES
Management as follows:
ISO 31000 - Risk management.
Risk Management Standard—ISO 31000: (2017, August 29). Retrieved from
An international standard which a guidelines, https://www.iso.org/iso-31000-
provides the framework, principle, and process risk-management.html
for managing risk. It can used by any
organization regardless of its activity, size and M.B. (2010). Model of risk
sector. management in organisations. The
Ma£Opolska School of Economics
BS 25999-2 Business Continuity in Tarnów Research Papers
Management—Part 2: Collection, 16(2), 7-15
Specification (the first standard in the world
referring to operational continuity maintenance M. W. (Trans.). (Februarry, 2017).
during a serious catastrophe or accident as Guidelines for the Risk
well as any unwelcome event; it serves to Management Function. IIA Norge,
minimise disturbances which occur in any area 1-24.
of an organisation).
Risk-Compliance. (n.d.).
Risk Management Standard: Retrieved from
Prepared on the basis of the British http://www.alliedboston.com/pract
management model and trade organisations ice-area.php?id=15
such The Institute of Risk Managemen (IRM), The
Association of Insurance and Risk Risk management: Why is it
Managers(AIRMIC) and The National Forum for important for your business? |
Risk Management in the Public Sector(ALARM) BrokerLink Blog. (2017, August
30). Retrieved from
https://www.brokerlink.ca/blog/ris
k-management/

Rowe, C. (n.d.). Risk Management
Blog - ClearRisk. Retrieved from
http://www.clearrisk.com/risk-
management-blog/bid/47395/The-
Risk-Management-Process-In-5-
Steps

28







BUSINESS
MAGAZINE

VOLUME 1: JUNE 2018
13 JUNE 2018


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